AP Eagers pleads for a fair go as Holden exits

The nation’s biggest car dealer has called on GM to deal with it fairly and reasonably as Holdens disappear from Australia.

The Holden brand has been in decline for some time. Picture: Liam Kidston.

The nation’s biggest car dealer, the publicly listed AP Eagers, has called on US auto giant General Motors to deal with it fairly and reasonably as it looks to compensate car sellers as Holdens disappear from Australia.

AP Eagers has a 90-year relationship with the carmaker and is keen to protect itself from the commercial fallout of GM’s shock decision to axe the Holden brand.

AP Eagers warned it couldn't at this stage assess the financial impact to its own company as GM begins to calculate and pay compensation to Australian car dealers. AP Eagers only late last year issued a profit warning in the worst trading conditions in decades, with new vehicle sales declining for 19 consecutive months.

Last year AP Eagers finalised its $2.3bn takeover of car dealer rival AHG, which also subsequently dented its earnings, as its chief executive Martin Ward said the car group was not immune to the external trading environment.

On Monday GM shocked Australian car enthusiasts by announcing that the Holden brand would be axed by the end of the year with the loss of 600 local jobs.

GM will maintain Holden service outlets to support existing Holden customers with warranty claims, spare parts, servicing and recalls for 10 years.

AP Eagers is looking to be properly compensated for the move.

“AP Eagers has been a loyal partner of General Motors within Australia for 90 years, having commenced operations in 1930, 18 years prior to Holden’s launch in this country,” it said.

“This is therefore a very sad day for our company, our stakeholders and, particularly, our dedicated employees who have diligently represented the Holden brand on behalf of the General Motors manufacturer, some for over 40 years personally.”

AP Eagers said GM had indicated that it intended to outline proposed transition and compensation arrangements with dealers confidentially, and that these arrangements would be fair.

“It will not be possible for AP Eagers to assess the financial impact of these arrangements on our company, if any, until we have received further details from General Motors,” the group said.

“We are expecting General Motors to be fair and reasonable in relation to the transition and compensation arrangements and to fully recognise our partnership that has spanned 90 years as well as the current commitments we have in place to represent them.

“Whilst all discussions between AP Eagers and General Motors will be on a confidential basis, we will provide further updates to the ASX as required by our continuous disclosure obligations.”

The Holden brand has been in decline for some time. Its proportion of new car sales in Australia was just under 30 per cent in the 1990s but fell to 12.8 per cent by 2010, and as low as 4.1 per cent last year. In 2002 Holden was Australia’s biggest selling carmaker, but lost its crown to Toyota in 2003.