Why the large Aussie car is terminal – despite the $13 billion you paid to save it
The demise of locally built Holden Commodore and Ford Falcon sales is accelerating. Back in 2003, Ford sold 73,220 Falcons. At the end of 2010 Falcon sales had dropped to 29,516 Falcons – a reduction of 60 per cent in seven years. Then, in 2011, Falcon sales, incredibly, fell another 37 per cent – to just 18,741 units.
The Holden Commodore hit its stride in 2002, with 88,478 Commodores rolling out into the hands of buyers. Despite spending $1 billion developing the VE Commodore (some of it even GM’s own money), Commodore sales fells to 44,387 by the end of 2009 – a 50 per cent drop over seven years. A slight rise looked like the light at the end of the tunnel for Commodore in 2010 (one per cent, or an increase of 1569 sales). But that was short-lived: By 2011 Commodore was well established in a terrain-warning trajectory, too, finishing the year with just 40,617 sales – a year-on-year decline of 12 per cent.
The Ford Falcon limped out of the blocks in 2012, with sales down a further 22 per cent this year, and the Holden Commodore hobbled too: its sales were down 20 per cent for the first two months of 2012.
Incredibly, or at least hoping to capitalize on the room-temperature IQ of some journalists, Holden issued a press release following the posting of January’s official car industry sales figures. Titled ‘Local and Imported Holdens Make Strong Showing in January’, it ‘revealed’ that Commodore “sold 2170 units in January for 49.7 per cent of the large car segment”. Right … translated that means ‘on track for about 26,000 sales this year, a personal worst, but hanging onto its dwindling territory in a segment that’s on the nose’. So, a triumph for the spin merchants at Holden Central there.
Almost $13 billion dollars in taxpayer funds either has been spent in the past decade propping up local car manufacturing in Australia, or is currently budgeted to be spent over the next decade. It's not enough to stem the tide of buyers choosing to shop elsewhere.
Holden boss Mike Devereux says the drop in Commodore sales since the late 1990s is a product of increased choice in the market. He claims the number of cars on offer then was 144 (different models) and today it's 230. Some dilution must inevitably occur. Yet today there are only eight vehicles in the large car category. (All the action, choice-wise has been in small and light cars, and SUVs.) Holden's Commodore and Ford's Falcon are the number one and number two sellers in large cars - and the other six combined don't equal the total of the Falcon's sales. The bottom line is that Holden and Ford have also dropped the ball on the product and the market - just as they did in the USA in 2009/2010. Buyers increasingly don't want the large cars they peddle any more because there is simply better value elsewhere, at so many other companies.
If this shebang were a boxing match: title fight – Aussie large car versus the public – the towel would be hitting the canvas; if this were a post about your superannuation fund’s performance … you’d be switching fund managers and postponing your retirement for another 10 years.