How GMSV Can Succeed Where Holden Failed

The Chevrolet Corvette will be the flagship model in GMSV's quest to win the hearts and wallets of Australians.

Holden's passing was a sad day for Australian car enthusiasts. But even on that dark day, General Motors gave us a glimmer of hope.

Between the bad news of Holden's closure, the American auto giant's commitment to Australia slipped, albeit with lesser aspirations as a niche operation.

General Motors Specialty Vehicles (GMSV) effectively combines what's left of Holden with HSV's successful transition to being a vehicle importer/remanufacturer in the US (including the Chevrolet Camaro and Silverado 2500).

So why does General Motors in Detroit think the GMSV can succeed where Holden failed? We have several possible answers.

New start

One of the biggest challenges for Holden in recent years has been maintaining his legacy. The harsh reality is that the brand has not been able to keep up with the demands of the market and has lost its leading position in the market. It faced stiffer competition from Toyota, Mazda, Hyundai and Mitsubishi and struggled to keep up.

But the problem was that Holden had established itself as the biggest brand in the country. It was necessary to take into account the manufacturing operation and the huge dealer network throughout the country. Simply put, he tried to do too much.

GMSV doesn't need to worry about this. While Walkinshaw Automotive Group (WAG) will be restoring the Chevrolet Silverado 1500 and 2500 in Melbourne, this is nowhere near the scale of operation required to build a Commodore from scratch.

The Holden closure also allowed the dealer network to (arbitrarily) shrink so that only key showrooms remain, making GMSV's life easier to keep everyone happy.

Another plus point of switching from Holden to Chevrolet badge (at least for now) is that it doesn't carry any luggage. While Holden was loved (and remains loyal), the Lion emblem became a liability in many ways as expectations were higher than the market allowed the company to achieve.

No Commodore, no problem

Nowhere has the Holden heritage and weight on some models been more evident than the latest ZB Commodore. It was the first fully imported model to feature the famous nameplate, and so expectations were unfairly high.

It would never drive as well as a locally designed and built Commodore, and it wouldn't sell as well because buyers simply didn't want sedans and station wagons the same way. The ZB Commodore was a good family car, but the need to wear the iconic badge certainly hurt its performance.

This is a problem that GMSV need not worry about. The brand starts with Chevrolet models, but may offer Cadillac and GMC if it feels it suits the market. After all, there's a reason they didn't call it Chevrolet Specialty Vehicles.

In fact, GMSV will face the opposite problem of the imported Commodore when it introduces the new Corvette in 2021. It's a well-known nameplate with a lot of anticipation, but equally there's pent-up demand for the iconic sports car and the new mid-engined C8. Stingray can give the GMSV a supercar competitor at a reduced price. The perfect hero car to build GMSV in the next few years.

Quality Not Quantity

Holden has been so great for so long that anything less than a lead has been seen as a step backwards. If you've been in the lead for years, second place looks bad, even if it still means you're selling a lot of cars.

A few years before his final demise, he lost his place at the top of the Toyota sales charts, but it was one of many signs that Holden was in trouble.

Most notable was the shift from large sedans like the Commodore to SUVs, which became a popular choice for families. Holden was committed to the Commodore and couldn't move away from it into SUVs as quickly as Toyota, Mazda, and Hyundai could.

Regardless, Holden was expected to keep its place at the bottom of the sales list. This only increased the pressure on the brand and its employees.

Again, GMSV doesn't have to worry about how it performs in terms of sales; at least not in the same way as Holden. GM made it clear from the start that GMSV was a "niche" operation - selling fewer cars to a more premium audience.

The Silverado 1500, for example, costs over $100, more than double the price of the Holden Colorado. But GMSV won't sell as many Silverados as Colorados, quality over quantity.

Growth room

Another positive for GMSV's new start and niche focus is that it doesn't have to worry about market segments in which Holden has traditionally competed that are in decline. So don't expect GMSV to offer any hatchbacks or family sedans anytime soon.

Instead, it looks like the Silverado and Corvette will be the focus in the short term, but that doesn't mean there's a lot of room for growth. As we wrote earlier, there are several GM models in the US that have potential in Australia.

The strength of the local premium market will no doubt make GM executives seriously consider releasing Cadillac Down Under models. Then there's GMC's vehicle lineup and its upcoming electric Hummer.