In what's being seen as the final blow for the Australian motor industry, General Motors' Holden division has announced that it'll be shutting its assembly plants by the end of 2017.
This will inevitably spell the end of the Australian designed rear-wheel drive Commodore sedan, ute and wagon line-up, of which the former two were sold as the Chevrolet Lumina in South Africa until recently.
This does not, however, spell the end of the Holden brand as GM will remain in the country as a full importer and simply rebadged Chevrolet models as it already does with most of its range.
SIMPLY NOT VIABLE
“No matter which way we apply the numbers, our long term business case to make and assemble cars in this country is simply not viable,” General Manager Mike Devereux told reporters at GM's car plant in Adelaide.
GM Chairman Dan Akerson added: “The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.”
GM's decision to close its plants in South Australia and Victoria states caps a dire year for Australian vehicle production.
In May, Ford said it would shut its two Australian vehicle plants in October 2016, following the exit of Mitsubishi in 2008.
There have been widespread concerns that an exit by GM Holden would be followed by the sole remaining producer, Toyota, threatening around 150 parts and component suppliers directly employing more than 40 000 people.
TOYOTA TO FOLLOW?
“It's now highly likely that Toyota will leave Australia. In fact it's almost certain,” Australian Manufacturing Workers Union national vehicles division secretary Dave Smith told reporters outside Holden's head office in Melbourne.
Toyota said that GM's decision to stop production in Australia will place unprecedented pressure on the local supplier network and its ability to build cars in the country.
The company said it would work with suppliers and the government to determine its next steps and whether it could continue operating as the only carmaker after GM leaves.
It's not that the Australian car market is small by any means - Australia has annual sales of around 1.1 million new vehicles, yet sales of locally manufactured vehicles have fallen to less than a quarter of that, from almost 389 000 in 2005. -Reuters