Commodore exports failing - Carsguide

[prydey]

http://www.carsguide.com.au/news-and...id_east_market

THE troubled Holden Commodore is being withdrawn from showrooms in the Middle East ...

... as exports of Australia's favourite car continue to collapse.


Overseas sales of the Commodore this year are likely drop to around one-tenth of their recent record, 60,518 cars in 2005, because of falling support since then in the Middle East, Brazil and the USA. Last year's total was just 7817 cars. The only bright spots are relatively strong demand for the long- wheelbase Caprice in the Middle East and the growth of police car sales in America.

The export slide has also seen output from Holden's factory at Elizabeth in South Australia fall from 165,000 cars in 2004 to 66,061 last year, although the company hopes local production of the compact Cruze alongside the Commodore will eventually rebuild its total to around 100,000 a year.

"This is why we are doing Cruze. For a plant of our size, on a two- shift operation and depending on what you're building, a good target is around 100,000 cars," Holden spokesperson, Emily Perry, said yesterday. "From an operational point of view, it's not necessarily a bad thing for us."

The Middle East retreat came as this year's sales total for the Commodore, badged as a Chevrolet Lumina, inches toward an insignificant 160 cars. Holden is also likely to soon end a Brazilian export program, despite promising sales of 600 cars in 2010, after the recent imposition of a massive import tariff to protect locally-made cars in the South American country.

"The Lumina is being wound up in the Middle East. We haven't made a decision on Brazil," said Perry. "We said we were going to sell 600 cars there and we've certainly done that. The short-term impact is from the tariff they have put in ... that has added 25-30 per cent to the price of the vehicle."

Holden admitted its overseas sales have been hurt over the past two years by the strength of the Australian dollar, but the company was hit hardest by the end of its G8 export program to the USA when General Motors shut down its Pontiac division.

"The Australian dollar doesn't help," Perry said.

Holden's efforts with the American police car program are improving but the company refuses to give production numbers, waiting for confirmation of deliveries in the USA.

"It's 614 cars his year, and that's in the six-month period since March. They only started being recorded as sales in June," Perry said. "The patrol cars are starting to be delivered. Of course it's gaining momentum."

The export defeats come at a time when there are more and more questions about the future of the Commodore, particularly beyond the VF model that is now confirmed for showrooms in the second half of 2013. But Perry said Holden's efforts, and particularly its production for Australian buyers, needs to be measured against the two other local carmakers, Ford and Toyota.

"If you think that we've sold twice or three times as many locally- made cars as our local volume competitors, that speaks volumes about what we've done. We're nearly double Ford and triple Toyota," she said.

i see they are still talking up their PPV program to the US. 100 sales a month and its 'gaining momentum'!!

as for losing sales brazil, it mentions apart from the strong aussie dollar, the main reason is the 25-30% import tariff the govt has added to protect their local industry. why is it that other govt's around the world do this, to protect their own, and yet our govt REDUCES or ABOLISHES import tariffs on cars!! it just doesn't make sense to me.

seems commodore is no longer immune to bad press.

[Serial_Fool]

Because reducing and abolishing import tarrifs allows for greater competition for the industry. None of us here would be in Falcons if a BMW or Mercedes cost the same amount of money from new.

And regarding Holden's flattening export sales...maybe they should be turning towards providing China's ever expanding middle class with some Aussie muscle.

[prydey]

Originally Posted by Serial_Fool

Because reducing and abolishing import tarrifs allows for greater competition for the industry.

thats the theory, but in reality, it is killing our auto industry. we can't compete with countries where the workers are happy to work for $10/week. why buy anythng australian when you can get something from japan/korea/thailand/china/india etc at a fraction of the cost.

[Serial_Fool]

Originally Posted by prydey

thats the theory, but in reality, it is killing our auto industry. we can't compete with countries where the workers are happy to work for $10/week. why buy anythng australian when you can get something from japan/korea/thailand/china/india etc at a fraction of the cost.

That's a nice way of looking at things but it doesn't explain the premiums put on European and American vehicles sold new in Australia now does it? Or even new Australian cars in Australia when you consider how much the "Pontiac G8" sold for compare to the Holden Commodore.

We pay too much for a sub standard product. I don't care if the car is made in Australia, Germany or tim-buck-too to be quite honest.

*Edit* I guess my reasoning behind this is: why would others want our cars when we can't produce them cost effectively for an overseas market?

[prydey]

i guess the way i look at it is, why should we accept cars from korea/japan/china/india etc with no tariff knowing full well it will impact heavily on our own industry.

if selling the local cars for mid $30k is really the best we can do, then that needs to be protected.

edit - having said that, it wasn't really the main focus of the article or why i posted it.

[5.4 GT]

Interesting... saw these everywhere in Abu Dhabi whilst there recently. The taxi ride to the airport in a Caprice late doing ~150km/h (running late) in a 60 zone was fun haha.

[Serial_Fool]

Simply for the reason they'll give our domestic manufacturers a hurry up on pricing and even quality. Vehicles should also be going down in price, much the same way mobile phones do. I don't accept for a moment that mid $30k is the best our manufacturers can do considering the price Holden offered the Commodore in the US.

[xtremerus]

Originally Posted by Serial_Fool

Because reducing and abolishing import tarrifs allows for greater competition for the industry. None of us here would be in Falcons if a BMW or Mercedes cost the same amount of money from new.

And regarding Holden's flattening export sales...maybe they should be turning towards providing China's ever expanding middle class with some Aussie muscle.

The current tariff on cars into Australia, is only 5%. SFA
BMW or Mercedes, of comparable size and power.with a 5% price drop ie. no tariff, would still not be price of a Commodore or Falcon car.

[XR Martin]

And remember, we have the lowest import tarriff on automobiles than any other country with its own auto industry.

[Franco Cozzo]

Just because you have low tarrifs on imports doesn't mean people would buy Australian all the sudden if it went up 30%, it just means people who buy imports don't want Falcon, Territory or Commodore, maybe Ford/Holden Australia don't make/sell/market what people want to buy?

If the price of imports went up 30%, would I buy a Falcon?

No, I'd still be buying something in the small car sector.

The only thing increased taxes hurt is customer freedom.

[Wretched]

Originally Posted by Big Damo

Just because you have low tarrifs on imports doesn't mean people would buy Australian all the sudden if it went up 30%, it just means people who buy imports don't want Falcon, Territory or Commodore, maybe Ford/Holden Australia don't make/sell/market what people want to buy?

^ This.

You only need to look at the sales figures each month to see a trend.
The market is heading to "smaller" more efficient cars and more practical SUVs.
I'd rather one or a four seater ute than a sedan. Much more practical for me.

Territory sales reflect this but obviously the market is brimming with a good selection of cars.

[prydey]

its not about who buys what, its about a govt protecting its own industry.

[g220ba]

Perhaps higher tarriffs would entice more companies to build a bigger range of cars in australia again? That's what they're meant to do isn't it?

[Wretched]

Originally Posted by prydey

its not about who buys what, its about a govt protecting its own industry.

I would vote against it.
It encourages mediocrity, why would our car makers be encouraged to do better?

Why only protect car manufacturing, why not all inductries? Finance, IT, engineering, etc? All of these are costly to run and have many people employed too. why not just have the government run everything?

[Ford_The_Win]

I don't profess to know much about the auto industry, but it's a bit of a double edged sword the way I see it, increasing tariffs would help the local auto industry, but then Holden and Ford would be able to get away with selling poor quality, overpriced cars as they have done in the past. If there was no competition from overseas marques Holden would still be flogging the VY. I think a good compromise would be increasing tariffs but building global cars/platforms here in Australia, like the Focus or Corolla. That way the buyer gets a quality, well designed car that is also made in Aus.

[Luke Plaizier]

Well, something is required to level the playing field. There are much higher tariffs on importing cars into China, the US and Japan than there are on cars imported into Oz. China forces all car makers to have a presence in China AND to partner with a local company AND to hand over all their IP to the partnership before cars can be brought in.

And why aren't all companies that import goods into Australia required to abide by Australian Award Wage laws like Australian companies are?

If I were a multinational, why would I chose to locate in Australia with award wage laws, carbon taxes and powerful unions when I could just locate in China and pay slave labour money to desparate workers?

I say, if countries in the Asia Pacific don't sign up to a blanket free-trade arrangement, and/or Australia doesn't force companies of imported goods to abide by Award Wage law, then yeah, raising Tariffs is the way to go.


Lukeyson

[Franco Cozzo]

Originally Posted by Luke Plaizier

Well, something is required to level the playing field.

Maybe we're not big enough to have our own automotive manufacturing industry?

Perhaps we should just do design, thats it.

[Bossxr8]

Originally Posted by prydey

i see they are still talking up their PPV program to the US. 100 sales a month and its 'gaining momentum'!!

But Holden told us they would sell thousands and thousands.

Its gaining momentum like a glacier in Antartica.

[phillyc]

Originally Posted by prydey

http://www.carsguide.com.au/news-and...id_east_market

i see they are still talking up their PPV program to the US. 100 sales a month and its 'gaining momentum'!!

seems commodore is no longer immune to bad press.

Yep, seems the GMHolden Commodore is no longer immune to criticism. Amazing the number of knives that come out when you start to slip...

In fact, Go Auto said that the reason the exports to the Middle East were ceased, the primary driver was the poor quality of the Commodore and the Aussie dollars ascendacy was the final nail.

http://www.goauto.com.au/mellor/mell...2578CA00273CA0

“We had the Middle East business, anchored in Melbourne, and we lost that; we lost it because of poor quality,” said GM Holden’s Michael Filazzola.

“It was also in the way we way we actually executed the program. That gave us a bit of a realisation that the rest of the world has passed us by.”

He said GMH executives thought they were doing a good job when they were not.

“We stood still, we thought we actually were doing a good job, but we really weren’t.

As for the tariffs, I believe we need some protections. 10% would be good and perhaps, a maximum 80% market penetration / quota. Overseas countries, just do not play fair. We are pushovers and way too far ahead of the free market curve.

[Brazen]

Originally Posted by Serial_Fool

That's a nice way of looking at things but it doesn't explain the premiums put on European and American vehicles sold new in Australia now does it? Or even new Australian cars in Australia when you consider how much the "Pontiac G8" sold for compare to the Holden Commodore.

We pay too much for a sub standard product. I don't care if the car is made in Australia, Germany or tim-buck-too to be quite honest.

*Edit* I guess my reasoning behind this is: why would others want our cars when we can't produce them cost effectively for an overseas market?

What the heck are you talking about? A Cruze costs $AU54,000 in Finland, over here its $AU22,000

[Danny]

“We had the Middle East business, anchored in Melbourne, and we lost that; we lost it because of poor quality,” said GM Holden’s Michael Filazzola.

“It was also in the way we way we actually executed the program. That gave us a bit of a realisation that the rest of the world has passed us by.”

He said GMH executives thought they were doing a good job when they were not.

“We stood still, we thought we actually were doing a good job, but we really weren’t.

Sounds like something Ford should be saying re the Falcon.

[mik]

the cost of living and doing business in Australia is not cheap and rising every year, and this is a big part of our problem, the wealth distribution in Australia is changing, the line between haves and have nots is becoming bigger (i`d say there are a lot more have nots), it was`nt very long ago we where told Australian`s private debt was at an all time record,
i reckon we are now paying for the easy credit over the past couple of decades, years ago if you did`nt have the money you saved up and payed cash, it`s much harder to save these days and people still want the bigger dollar items but are settling on the cheaper smaller models.
also it`s less about what people want and more about what they can afford.

[Dr Smith]

Originally Posted by Danny

Sounds like something Ford should be saying re the Falcon.

Why, Ford Oz didn't lose any export market for the Falcon, especially for any reasons like those given by the candid Holden exec such as low quality etc, sadly Ford Oz/Falcon were never given the go ahead to actually export in the first place. An irony on losing sales for the Comodore in the Mid East is that the Falcon bird is revered by the local emiratees, imagine having a car sold there with the same name, or a turbo Terry buzzing down the 5 lane link between Dubai -Abu Dhabi at 140km/hr.

[Carby]

Originally Posted by Big Damo

Maybe we're not big enough to have our own automotive manufacturing industry?

Perhaps we should just do design, thats it.

Volvo seem to do alright and Sweden is a smaller country than Oz?

[Chilliman]

Originally Posted by Carby

Volvo seem to do alright and Sweden is a smaller country than Oz?

Both SAAB and Volvo were bought by GM and Ford respectively - they were once totally independent...then after the GFC, Ford sold Volvo to the Chinese and SAAB looks to be on its last legs after being sold to a Dutch company.

I guess in terms of Australian auto manufacturers always having been owned by overseas companies then yes Sweden was doing better than us...

...until now!

[Nikked]

Originally Posted by Carby

Volvo seem to do alright and Sweden is a smaller country than Oz?

Yes, but Volvo isn't owend buy the americans, and is a company with interest beyond cars...


Chalk and cheese compared to FoA

[imugli]

Actually, Volvo cars IS a completely separate entity than say, AB Volvo, who make commercial vehicles.

The Volvo the Geely now own DOES only have interests in cars and uses the Volvo name under licence from AB Volvo.

[2011G6E]

Be careful what you wish for...if we had a strong protectionist stand, we'd be excluded from most world trade organisations, and foreign cars would skyrocket in price.
This would mean we would be left with "Australian built" cars only. More importantly it would also mean we would be at the mercy of those same manufacturers and they could, basically, charge whatever they liked to a captive audience.

Don't underestimate the greed of a manufacturer of anything who suddenly realises that they don't have any real competition in the marketplace...

[aussie muscle]

Originally Posted by Luke Plaizier

, and/or Australia doesn't force companies of imported goods to abide by Award Wage law, then yeah, raising Tariffs is the way to go.
Lukeyson

pfft. australian's are too 'weak' to try that on. i mean, shouldn't we be pushing thailand around, rather than the opposite? Remember the North-American Air debacle a few years ago? (they increased number of flights, so aust threatened tariffs on flights, so they threatened something unrelated. wheat i think)

The primary reason for tariffs other than protectionism was the second world war made us realise we were too dependent on overseas countries for manufacturing when suddenly worldwide shipping stopped. The govt decided to push for local manufacturing, including a car industry.

[bobthebilda]

Originally Posted by Carby

Volvo seem to do alright and Sweden is a smaller country than Oz?

Last I checked, sweden is part of europe (which has a land mass 40% more than australia), but has a population around 35 times more. If campbellfield or elizabeth were surrounded by 700 million people, they would probably do ok too, even if 98% of the people didnt buy their cars.