To this Antipodean – from the other side of the Tasman Sea – last night’s announcement Holden is to end local manufacture in Australia in 2017 is deja vu – we in New Zealand went through this in 1990.
The General Motors of my 1960s and 1970s youth was a thriving operation in both countries. In Australia, where ‘Holden’s’ had started as a saddlery maker in 1856 before moving into automotive in 1908, became a vehicle assembler, a GM subsidiary in 1931 and, from 1948, a full manufacturer, there was a big engine and vehicle building operation in Melbourne and assembly plants in several states – they even built a new one in Queensland in the early 70s to make the Isuzu-sourced Gemini. Most production was of locally designed and made Holdens, supplemented by the odd KD kit assembled Vauxhall, Chevy or Pontiac or locally made versions of overseas GM designs, such as the aforementioned Gemini.
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On my side of the pond, the plant in Petone had started assembling Pontiac trucks in 1926 and was still knocking out the odd Canadian Pontiac and Chevy sedan from SKD kits up until the late 1960s – the government bought some every year for ministerial cars – alongside Bedford vans and trucks. A new plant in Trentham went up in 1967 – as in Australia, most production was Holden but you’d also spot Vauxhall Crestas, Victors, Vivas and Chevettes on the line until assembly of the UK models ended early in the ’80s. GM also built its own Frigidaire appliances in NZ for a while.
The common thread running through all this was ‘protection’. On both sides of the Tasman, import restrictions, local content rules and taxes and duties encouraged local assembly (and manufacture in Australia) and Oz’s unique Australian Design Rule safety and emissions laws made it as difficult as possible for outsiders to compete with the cosseted local manufacturers like Holden.
The oil crises of the 1970s clobbered Holden which, unlike local rival Ford, for a decade downsized its core model – the Opel-derived Commodore – from traditional Aussie ‘big six’ (cylinders and seats) to European big car dimensions, losing a generation of taxi buyers in the process. Also slowly coming to bear was government thinking that cars were too expensive and various measures such as tariff reductions were put in place to make local products more competitive with previously highly taxed imports.
Eventually, one Australian plant could supply all New Zealand’s Commodore needs as imports from captive GM units in Japan, Spain, the UK, Germany, Thailand and South Korea filled out the range and the Kiwi plants eventually shut as previously prohibitive import tariff and sales tax barriers were removed. In Australia, big cars gradually fell out of favour and GM scrabbled around with voluntary or forced alliances with the likes of Nissan and then Toyota to get the smaller cars it needed. Like New Zealand, Holden Australia also turned later to units in Japan, Spain, Germany and, latterly, Thailand and Korea to get the smaller cars and niche models like SUVs needed for a full range.
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By GlobalDataThe continuing falling out of favour of large cars, diminishing export opportunities, lowered tariff barrriers, free trade agreements with the likes of Thailand (which can make cars much more cheaply than Australia) and the high Australian dollar are among the factors that have finally come together to doom Holden car making – finally, after Leyland, Chrysler, Nissan, Mitsubishi and Ford (from 2016) have all also decided to depart.
I wonder if Toyota will manage to survive. My experience with CKD operations suggests the Japanese will always take the long-haul view but, in New Zealand, unlimited imports of used cars and a gradual lowering of protective import tariffs eventually did for local assembly in 1998.
If Toyota Australia can make a business survival case, good luck to them. But can the parts boys make enough of a go of the new regime to survive alongside the automaker?
Clearly, the Australian government wasn’t that interested in preserving local auto manufacture. Good cases were made for subsidies to keep Holden and others in business with the overall return to the economy far exceeding the taxpayer input. But governments don’t help struggling automakers by signing up to free trade agreements with cheap automaking countries – what cars does Australia make Thais want? – and lowering tariffs.
All this in huge contrast to the effort put in by US states to secure and retain the big transplants operating there.
I draw but one consolation – Holden factories may soon be gone but the famous Aussie brand should remain – and we’ve now had time enough to get used to it on vehicles built proudly in Thailand and Korea, rather than Melbourne or Adelaide.
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