CAN THE END OF HOLDEN PROVIDE AN OPPORTUNITY FOR AUSTRALIAN WORKSHOPS?
ACA Research, the AAAA’s partner in the AAAA Aftermarket Dashboard, takes a look at the demise of Holden
Holden’s retirement from the Australian market has been widely publicised, with the loss of 600 – 800 jobs expected from the Design and Operations Office in Melbourne and the test track at Lang Lang to mark the end of its proud 78-year history.
Although GM’s decision to shut the brand is ultimately not that surprising given recent sales history and its global shift away from right hand drive markets, it has caused a certain level of anxiety within the sector. Afterall, if an iconic Australian brand like Holden isn’t viable, what does that mean for other brands in the highly competitive Australian market?
Looking to the future, Holden’s press release attempts to reassure customers by offering servicing and spare parts through an aftersales network for at least 10 years. At this time however, the specifics of these networks are unclear. While it appears that dealers within the existing network will be provided the opportunity to remain Holden service centres, we’re unsure at this time how many will take up that option, and how the offer would be promoted in practice.
As of February 2019, there were almost 2.2 million Holdens in the Australian car parc. While many of them are older, out of warranty vehicles, almost one in six were purchased within the past five years. As can be seen in the table below, these vehicles are most likely to be serviced within the dealer network, but we do still have 634,430 Holdens that are currently returning to dealer workshops for their servicing and maintenance needs.
Note. Dealership servicing estimates based on ACA Research Consumer Automotive Survey
Given the level of uncertainty around Holden’s future plans, and the fact that customers don’t need to service their vehicles at a Holden dealership to maintain warranty coverage, this provides a significant opportunity for independent and chain workshops to pick up a share of this business.
Obviously though, you need to know whether there’s enough Holdens in your area to make it worthwhile. For a workshop operator, this demonstrates the importance of having a sound understanding of your local area.
To help with this, we’ve pulled out the LGA with the greatest number of Holdens in each state or territory. Looking at the data, if you are operating a workshop in Blacktown in Sydney, Casey in Melbourne, or Playford in Adelaide, then it’s probably worth trying to chase down some business.
On top of this, AAAA members can supplement this by using the local car parc data. This tool (accessed through the member area on the AAAA website), lets members go deeper by breaking out the top makes and models by the age of vehicle. Using this data, and assuming that around two thirds of the vehicles under warranty will be serviced within the dealer network, it becomes easier to estimate the possible size of the prize.
There is no doubt that GM’s decision to axe Holden has caused widespread sadness amongst Australians – including its competitors at Ford, who thanked Holden for “keeping us on our toes and inspiring us to keep aiming higher.” It would however be unwise to overlook the automotive aftermarket opportunities that could be gained from such a loss, which could help grow revenue for local businesses.
This article was prepared for AAA Magazine by ACA Research, our partners in the AAAA Aftermarket Dashboard which is delivered to AAAA members each quarter.