Holden is making promises that it may not be able to keep, says a leading car industry expert.
Clive Matthew-Wilson, editor of the car buyers’ Dog & Lemon Guide, says:
“Holden has announced that it will build a small car in Australia. Holden can announce pretty well anything it wants, but that doesn’t mean it’s going to happen. The sad fact is, Holden’s car plants are losing money faster than a drunk at a casino and there’s no easy way of turning this around.”
“One of the reasons the Australian industry has focussed on large cars in the past is that there’s very little profit in building small ones.”
“In an ever-shrinking market, Holden is going to be competing head-on with Asian cars produced in low wage countries."
“However, there’s no guarantee that Holden will even survive long enough to build its new car. General Motors is essentially bankrupt. The U.S. government is coming to the rescue because it has no choice, but there’s no way that a bailout by the American taxpayer is going to include Australia’s unprofitable car factories. GM’s Australian assembly operations will simply be phased out or closed down entirely. This might take one year or three, but it will happen.”
“Australia makes a few hundred thousand cars a year, and loses money on virtually every one, due to high costs and low volumes. Already, Thai-built cars are nearly out-selling Australian-built cars. That’s without even considering China. China is on track to sell nearly 10 million vehicles this year, and pays its workers something like $1 per hour.”
“There’s simply no way Australia’s car plants can survive against this sort of competition. Australia’s car assembly industry is doomed to go the way of Australia’s television assembly industry.”
“I wish I was wrong, but I don’t think I am.”