Death of Holden: Which car brand is next?

The demise of Holden has shone a spotlight on other brands struggling to survive in a new-car market that has been flat for almost two years.

• Holden to slash new car prices by up to $17,500
• Holden bosses ‘blindsided’ by move to axe brand

The demise of Holden has shone a spotlight on other brands struggling to survive in a new-car market that has been flat for almost two years.

The most obvious candidates are US brands with a similar business model to GM — a heavy bias towards left-hand drive markets and dwindling sales of right-hand drive models.

The most obvious candidate is Jeep, a brand that was riding high a couple of years ago until it was derailed by well-publicised reliability issues and a corporate scandal involving its local chief executive.

Five years ago Australians bought more than 30,000 Jeeps. Last year the number had dwindled to less than 6000.

The brand has modest right-hand drive sales in the United Kingdom, Japan and South Africa totalling roughly 23,000.

Jeep was riding high until it was derailed by well-publicised reliability issues and a corporate scandal.

But Jeep said it was committed to continuing to build vehicles for right-hand drive markets.

Kevin Flynn, the Australian managing director of Jeep’s parent company Fiat-Chrysler Automobiles said: “Earlier this month, global and regional Jeep executives presented an investment plan in Australia to our dealers, signifying the importance of this market to the company. A complete RHD product plan is in place with Australia being key to our global volume growth aspirations.”

He said Australia would be the largest market for the new Jeep Gladiator outside of North America.

“We have a very exciting product line-up that we look forward to sharing at a later date,” he said.

Fiat-Chrysler Automobiles also sells Chrysler, Fiat and Alfa Romeo in Australia. All three of those brands are in trouble.

Alfa Romeo and Fiat sales have dropped significantly and each sold less than 1000 cars last year, while Chrysler is kept afloat by a NSW Police order for its V8-powered 300C sedan.

Other brands marked for a possible exit from Australia include French brands Peugeot and Citroen, although both sell reasonable numbers of right-hand drive vehicles in the United Kingdom.

Fiat sales have dropped significantly. Picture: Andy Rogers

Australians bought fewer than 400 Citroens last year.

The chief executive of the Federal Chamber of Automotive Industries, Tony Weber, said consolidation was a part of doing business in a competitive market.

Mr Weber said Australia had more than 50 competing car brands.

“That is incredibly competitive by international standards — we are one of the most competitive markets in the world,” he said.

“That’s good news for customers because competition drives down prices.”

But it also meant there would be corporate casualties.

French brand Citroen is also being marked for a possible exit from Australia.

“One of the fundamentals of a market-based economy is the fact that firms enter and leave the market,” he said.

He said the demise of Holden would not necessarily trigger more exits but he acknowledged the difficult conditions facing the industry.

“We have seen 22 consecutive months of negative growth in the new-car market. It’s a very difficult environment at the moment,” he said.

Ford this week reinforced its commitment to the local market, pointing out that it was an engineering and design resource for the global business, employing more than 2000 technical staff and spending $500 million on local research and development this year alone.

Ford’s local engineering workforce plays a key role in the development of the Ford Ranger ute, which is sold in more than 180 countries.

Originally published as Death of Holden: Which car brand is next?