Slow sales of Com­modore and Equinox mod­els leaves Holden with thou­sands of ex­cess ve­hi­cles in stock Dave But­tner, Chair­man and MD, GM Holden

Wheels (Australia) - - Contents -

Down­turn prompts Holden to tem­po­rar­ily turn off taps

HOLDEN HAS made an ex­tra­or­di­nary de­ci­sion to stop pro­duc­tion of many of its pop­u­lar mod­els, af­fect­ing fac­to­ries as far flung as Ger­many, Thai­land and Mex­ico.

The or­der to stop the boats de­liv­er­ing more new cars was made to ad­dress a wors­en­ing stock­over­sup­ply cri­sis due to slow sales.

Fresh from its worst-ever sales re­sult – just 3927 cars in July – and months of mar­ket share below five per­cent, re­cently ap­pointed Holden boss Dave But­tner has ne­go­ti­ated to halt pro­duc­tion and de­liv­er­ies of core mod­els to clear ex­ist­ing stock.

Holden has thou­sands of cars gath­er­ing dust in pad­docks and hold­ing yards, a re­sult of ex­cess or­ders placed be­fore any­one pre­dicted the dire po­si­tion the brand would be in once it ceased lo­cal man­u­fac­tur­ing late in 2017.

“The sales were go­ing like that,” But­tner says, mo­tion­ing to the ground. “…and the tap hadn’t been turned off, so the pro­duc­tion is still com­ing to­wards us – and that hor­ri­fied me as an old [prod­uct] plan­ner.”

“We’re try­ing to get back to a rea­son­able stock-carry level by the end of the year, so we can go into the new year in a healthy po­si­tion.”

But­tner’s re­quest to turn off much of the sup­ply had the sup­port of Gen­eral Mo­tors ex­ec­u­tives in Detroit, who hired the for­mer Toy­ota Aus­tralia chief to try to turn Holden’s for­tunes around in what has been its most chal­leng­ing pe­riod.

With some Com­modore mod­els, Holden has re­quested the Opel fac­tory in Ger­many (a fac­tory now owned by the par­ent com­pany of Peu­geot and Citroen) not to build cars un­til 2019.

Sim­i­larly, the Equinox has been put on hold to ad­dress its poor sales po­si­tion; in the first nine months of 2018, Holden’s sales of the medium SUV tally just 3621 units. That’s about as many as topselling com­peti­tors sell in six weeks.

But­tner says stop­ping the boats – in turn putting pres­sure on fac­to­ries to deal with lower pro­duc­tion lev­els – is about be­ing re­al­is­tic and ac­cept­ing Holden has an up­hill bat­tle to build sales.

“If you don’t recog­nise the state of your sales and own up to it quickly, you’ve got a pretty huge pipe­line com­ing to­wards you.

“We’ve looked at the whole port­fo­lio, looked at what our stan­dard stock should be … it was just a nor­mal sales stock run­down … it’s not rocket sci­ence.”

But But­tner is adamant the slow­down in or­ders is a one-off about po­si­tion­ing the brand for chal­lenges ahead.

“You have to be able to turn pro­duc­tion down, but the idea is that you don’t have to do that of­ten,” he says. “This is a fairly unique sit­u­a­tion where we al­lowed the stock to keep com­ing to­wards us. Be­ing an old man­u­fac­tur­ing guy I’m fully cog­nizant of the bur­den that puts on a man­u­fac­tur­ing plant.

“We’ve had good co­op­er­a­tion from the plants but it wouldn’t be some­thing I’d like to re­peat on a reg­u­lar ba­sis be­cause from a cred­i­bil­ity point of view you don’t build it by do­ing that.”

It’s un­der­stood Holden has re­cently been clear­ing some cars pro­duced in 2017, which is far from ideal in the last quar­ter of the fol­low­ing year.

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