Australia's supplier association says Holden's decision to end manufacturing in the country from 2017 is 'extremely disappointing' and will affect vast swathes of workers in the component sector.

The Federation of Automotive Products Manufacturers (FAPM) insists the GM division's decision will impact tens of thousands of people working in supply chain as only one automaker will remain after 2018.

"We know things have been very difficult - volumes of course have been down since the global financial crisis," FAPM chief executive, Richard Reilly, told just-auto from Melbourne.

"It has come to a head. We have an historically high Australian dollar, we are an open market [with] 66 brands, America has 34...87% of vehicles are imported. Consumer preferences have changed from large, rear-wheel drive vehicles to smaller, more fuel-efficient vehicles.

"Put all that together and we have been struggling the last years. It is a very difficult manufacturing environment."

The supplier chief executive was unable to put a number on the amount of positions potentially affected for its 100 members representing two-thirds of the 30,000 component sector workers, but the body estimates there will be "widespread consolidation, job loss and diversification into non-automotive industries."

Reilly did point however, to the four-year window before Holden exits manufacturing in Australia as opportunity for his members to secure alternative work.

"At least we get quite a few years for companies to look at their businesses," he said. "Obviously, with vehicle volumes at the moment, we will have companies in the supply chain that will go out [of] business. It has rocked the supply chain.

"My members are looking to restructure their businesses and diversify, but we are realistic that these guys are experts in making automotive components."

Reilly added the FAPM was in constant contact with the Federal Government in Canberra as well as the regional administrations in Victoria and South Australia, where Ford, Toyota and Holden are based.

Holden's decision will cut around 2,900 jobs during the next four years - 1,600 at the Elizabeth, South Australia, Commodore and Cruze vehicle manufacturing plant and around 1,300 at engineering and engine operations in Victoria.

Holden insisted it would continue to have a significant presence in Australia beyond 2017, comprising a national sales company, national parts distribution centre and a global design studio.