How GMSV can succeed where Holden failed

The demise of Holden was a sad day for Australian motoring fans. But even on that dark day, General Motors gave us a glimmer of hope.

Slipped between the bad news of Holden’s closure was the American automotive giant’s commitment to Australia, albeit with lower aspirations as a niche operation.

General Motors Specialty Vehicles (GMSV) effectively combines what’s left of Holden with HSV’s successful transition to an importer/remanufacturer of US vehicles (including the Chevrolet Camaro and Silverado 2500).

So why does General Motors management in Detroit think GMSV can succeed where Holden failed? We have some potential answers.

Fresh start

One of the biggest difficulties for Holden in its later years was living up to its legacy. The harsh reality is the brand failed to keep up with market demands and lost its position atop the market. It faced stiffer competition from Toyota, Mazda, Hyundai and Mitsubishi and struggled to keep up.

But the problem was Holden had set itself up to be the biggest brand in the country. It had a manufacturing operation to consider and a huge dealer network across the country to look after. Put simply, it was trying to do too much.

GMSV doesn’t have to worry about that. While Walkinshaw Automotive Group (WAG) will remanufacture the Chevrolet Silverado 1500 and 2500 in Melbourne, it’s nowhere near the scale of operation that the Commodore required to be built from scratch.

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The closure of Holden has also allowed for the dealer network to be (controversially) trimmed right back, so only the key showrooms remain, which will make life easier for GMSV to keep everyone happy.

Another positive of the switch from Holden to the Chevrolet badge (at least for now) is it doesn’t have any baggage. As beloved as Holden was (and is by the faithful) the Lion emblem had become a burden in many ways, with expectations set higher than the market allowed the company to achieve.

No Commodore, no problem

Nowhere was the legacy of Holden and the weight it carried on certain models more evident than the final ZB Commodore. This was the first fully-imported model to wear the famous nameplate and because of that, expectations were unfairly high.

It was never going to be as good to drive as the locally engineered and built Commodore, nor was it going to sell as well because buyers simply didn’t want sedans and wagons in the same way either. The ZB Commodore was a good family car, but the pressure of having to carry the famous badge undoubtedly hurt its performance.

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This is a problem GMSV doesn’t have to worry about. The brand is starting off with Chevrolet models, but has the freedom to offer Cadillacs and GMCs if that’s what it feels suits the market. There’s a reason they didn’t call it Chevrolet Specialty Vehicles after all.

In fact, GMSV will enjoy the opposite problem to the imported Commodore when it introduces the new Corvette in 2021. It’s a famous nameplate with loads of expectations, but equally there’s pent-up demand for the iconic sports car and the new mid-engine C8 Stingray could give GMSV a cut-price supercar rival. The perfect hero car to establish GMSV in the next few years.

Quality not quantity

Holden was so big for so long that anything less than leadership was seen as a backwards step. If you’re number one for years, second place looks bad, even if it still means you’re selling plenty of cars.

It lost its place at the top of the sales charts to Toyota several years before its ultimate demise, but it was one of many warning signs that Holden was in trouble.

Most notably was the transition from big sedans, like the Commodore, to SUVs being the popular choice for families. Holden was committed to manufacturing the Commodore and couldn’t move away from it and towards SUVs as fast as the likes of Toyota, Mazda and Hyundai could.

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Even so, expectations were on Holden to maintain its place near the pointy end of the sales charts. It only served to compound the pressure on the brand and its employees.

Again, GMSV doesn’t have to worry about how it performs in terms of sales; at least not in the same way Holden did. GM has made it clear from the very beginning that GMSV is a “niche” operation - selling fewer cars at a more premium audience.

The Silverado 1500, for example, starts at more than $100k, which is more than double what the Holden Colorado started at. But GMSV won’t look to sell as many Silverados as Colorados, quality over quantity is the name of the game.

Room to grow

Another positive for GMSV’s fresh start and niche focus is it doesn’t have to worry about market segments Holden traditionally competed in that are in decline. So, don’t expect GMSV to offer any hatchbacks or family sedans anytime soon.

Instead, it appears that the focus for the short-term will be the Silverado and Corvette, but that doesn’t mean there’s plenty of room for growth. As we’ve written before there’s several GM models in the US that have potential in Australia.

The strength of the local premium market will no doubt have GM’s execs thinking seriously about introducing Cadillac models Down Under. Then there’s GMC’s range of utes and its upcoming electric Hummer.