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Holden to close doors by end of 2020: what it means for customers

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It was once Australia's most prolific new car brand and a company that provided transport for tens of millions of Australians over 72 years.

But by the end of 2020 the Holden brand will be retired, leaving owners with myriad questions.

In announcing it had "taken this difficult decision" to shelve the once-loved Holden brand, parent company General Motors assured owners it would provide spare parts and servicing for "at least the next 10 years".

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Holden says there are plans for a "national aftersales network", although how large it is and what form it takes is unknown.

All 185 remaining Holden dealers will be offered the chance to be part of that network. Many already run dealerships for other brands, often sharing service departments. So there's not a major financial outlay, especially when there is the potential for profit.

A similar deal in the United Kingdom once Chevrolet retreated has left a network of 55 dealers.

GM plans to reimburse dealers servicing cars sold with free servicing commitments. It also plans to liaise with that network on recalls and other legal requirements.

While some may be concerned GM could just walk away altogether, keep in mind it's a large company that still plans to sell some Chevrolets in Australia (Silverado, Camaro and Corvette). There is also a chance it could get more serious with Chevrolet longer term or introduce Cadillac, as has long been the plan.

Upsetting the Government by not adhering to basic consumer obligations would make life tough for future ventures.

So while many promises have been broken by Holden (and its parent GM), don't expect it to walk away from its obligations under Australian Consumer Law. It simply wouldn't make sense.

Of course, there is a chance some dealerships will remove themselves from the soured Holden experience altogether.

While this could inconvenience rural owners, in particular, it's unlikely to be a major issue for most.

Besides, there are other options, such as enlisting other dealerships to perform service and warranty work.

Similarly, Holden says it will cover all warranty commitments, which for those purchased with seven-year coverage stretches until at least 2027.

There's also the protection offered under Australian Consumer Law, which in some instances will extend beyond the warranty (especially for cars sold with a three- or five-year warranty).

GM will set up a call centre, so if the selling dealer is no longer in operation those warranty obligations can be fulfilled elsewhere.

The bigger issue is what happens to resale values.

The general manager of valuations experts Redbook.com.au, Ross Booth, says heavy discounting of remaining stock would flow through to used cars, resulting in softer values.

He also says previous experience of brands bowing out tends to result in an initial decline in values.

"The Australian perception is there will be an increased risk [regarding warranty and service commitments]," he says.

But Booth says the collectible models such as V8s are unlikely to be negatively impacted.

"A V8 Commodore isn't going to decrease in value as a result of this," he says. "If anything, prices will stay the same or go up."

So, owning a Holden should not get any more costly, although its value could decline - in the short term at least.

There is also short-term uncertainty and, potentially, some inconvenience.

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Toby Hagon is one of Australia's most respected motoring writers. A regular contributor to News Corp, Wheels magazine, Qantas magazine and 4x4 Australia, he also features as a motoring expert on ABC Radio.
Comments
Peter Aldridge
February 19, 2020 9.04pm

Toby,

Do you mean Vauxhall rather than 'A similar deal in the United Kingdom once Chevrolet retreated'? The Vauxhall/Opel sell off was a clear indication of the GM thought process.

The sale of the Rayong plant in Thailand that supplier Colorado impacted the business case for continued sales operation in Australia. GM focus is clearly on LHD markets - specifically USA and China.

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