Holden closing down: What it means for car dealers, buyers

Anxious dealers, current Holden owners and bargain hunters are sweating on Holden’s next move following its decision to cease operations this year. Here’s what will happen next.

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Anxious dealers, current Holden owners and bargain hunters are sweating on Holden’s next move following its decision to cease operations this year.

A spokesman for the company said it would hold discussions with dealers about pricing in the next couple of weeks but buyers could expect “very, very attractive, sharp pricing” in the coming months.

Deals aren’t expected to be launched until March, though, which raises the prospect of a buyer drought until then.

Heavy discounts are bad news for current owners. Dealers predict current Holdens will have thousands of dollars wiped off their resale value.

Staff at Lawrence's Holden dealership in Rockhampton are grappling with the implications of General Motors' decision to retire the Holden brand in Australia.

Traditionally, car companies prefer to stimulate sales by offering secret bonuses to dealers, who can then use the money to sweeten deals for customers.

This protects the resale value for current customers and protects the value of the brand.

But as the Holden brand is gone, it appears the company will instead opt for deep discounts.

Current owners aren’t the only ones dealing with uncertainty.

Thousands of dealer staff around the country are waiting to see whether their business agrees to continue servicing Holdens.

As the Holden brand is gone, it appears the company will opt for deep discounts.

Holden will discuss compensation plans with dealers later this week, beginning what is likely to be a drawn out and emotive process. Some dealers have signed long-term leases for their premises, while those that own properties could lose tenants. A number of dealers have invested large amounts of money in upgrading their facilities.

Dealer compensation is likely to make up a sizeable chunk of the $1.5 billion General Motors has set aside for the withdrawal process, which includes shutting a plant that builds right-hand drive Colorados in Thailand.

Holden has committed to supporting customers with parts and service for at least 10 years, but it is unclear how many of its 185 dealerships will sign up to keeping their service departments running once their showrooms close.

One dealer, who declined to be named, said it probably made sense initially to continue servicing Holdens but as time went on it would be less attractive.

“It’s certainly an option a lot of dealers would be sensible to look into. The back end of our

Holden dealerships are still performing pretty well,” he said.

The perceived risk of owning a Holden — particularly a used one — will drive down prices.

Although many dealers have more than one brand on their sites, they will still be desperate to find new franchises to fill the floor space left empty by the Holden closure.

Unfortunately the new car market remains in a slump and very few brands are expanding their dealership footprint.

As for those looking for a new-car bargain, experts say the deals should be sharp but they need to be balanced against the inevitable poor resale value of the car.

The head of vehicle valuer Red Book, Ross Booth, said the perceived risk of owning a Holden — particularly a used one — will drive down prices.

“It will come down to how Holden disposes of its new car inventory,” he said.

If it opted for below-the-line discounts used values would hold up better, he said. If there were huge discounts, the value of late-model used Holdens would plummet accordingly.

Holden has committed to provide parts and service to owners for “at least” ten years.

Mr Booth said a new Holden could be a fantastic buy if the owner was planning to hold on to it for a long time.

“You could get yourself an absolute winner — a great car at a great price.”

But if they wanted to dispose of it in three to five years, it would be a different story.

“Buyers will perceive a risk on a five-year old car from a company that no longer exists.” he said.

A Mazda or Toyota would be seen as the safer bet by many prospective buyers.

Mr Booth said buyer concerns about parts, warranty and service were largely unfounded, but the more fear of a lack of support would drive the price down.

Holden has committed to provide parts and service to owners for “at least” ten years and will honour all warranties and service plans.

But it remains to be seen how many dealer service centres will remain open and what stocks of spare parts they’ll keep. As with some imported brands, there may be longer waits for replacement parts.

HOW MUCH IS YOUR HOLDEN NOW WORTH?

Experts predict the death of Holden could see a short-term spike in the value of the last homegrown V8 Commodores.

But Christophe Boribon, national auctions manager at respected classic car business Shannons warned that any jump in prices may be short-lived.

“I think everyone is going to get excited, maybe they might think their collector’s car has increased in value overnight. But I’m not sure that is the case, to be honest,” said Boribon.

“There could be a bit of nostalgia value. I think the market is going to maintain what it’s been doing. It might see a spike and come back to that point.

“Do they have potential to go up in value? Absolutely. I think it will play at people’s heartstrings. Holden has formed part of our lives for decades and decades.”

A 1976 Holden Torana. Picture: Stewart McLean

The head of car valuer Red Book, Ross Booth, agreed.

He said none of the current range of Holdens would be seen as collectables but the locally built vehicles were a different proposition.

“Theoretically this shouldn’t have any effect but Holden is dead, so in people’s minds they could become more valuable and you could see an increase in demand for used Commodores,” he said.

Commodores, Toranas or EH Holdens might not suddenly skyrocket in value there is potential for growth in the right models.

Boribon said some examples would continue to grow in value but he doubted any model would eclipse the record of the Ford GTHO Phase 3 that fetched more than $1 million in 2018.

That Falcon’s seven-figure sum was in part due to its extra pedigree — a previous owner was Aussie fast bowling legend Jeff Thomson.

Boribon said a Holden race car might have the potential to top the Falcon’s figure, “I think if there is one, it would be one of the racing cars, one of the Bathurst cars,” he said. “The following that Brock VK Commodores and Toranas have carries a lot weight.”

Boribon believes supply and demand will determine prices and there is demand in the market,

especially for cars such as Toranas and well-equipped later model 5.0-litre V8s that give buyers a more affordable entry point into collectable Holdens.

One segment that will remain popular, he believes, is that of the rarer, more modern badges, among them the turn of the century Monaro and last of the HSV Commodores.

Originally published as Holden closing down: What it means for car dealers, buyers