Holden readies for transition

GM HOLDEN chairman and managing director Mark Bernhard has admitted the company faces an uphill battle to remain relevant in the eyes of Australian consumers, but insists that a renewed focus on brand, customer experience and product would be the key to its future success.

With the car-maker closing its local manufacturing operations by the end of 2017 and transitioning to a national sales and marketing company, Holden will increase its line-up and work on improving its image through a number of brand-building initiatives.

Mr Bernhard described 2015 as “a pretty big year” for Holden – despite a 4.6 per cent sales decline in the booming market to the end of November and a poor showing in the JD Power Customer Service Index (CSI) study released last week – and said he was optimistic about the car-maker’s future following the factory closures in 2017.

“For us announcing 24 new vehicle launches, 36 new powertrains all by 2020, we can see ahead of us where that portfolio is going,” he told journalists at a Holden event last week. “And that gives us a lot of excitement and a lot of confidence about where we are headed.

“We talk about the biggest and best line-up that we have ever had, and we can see that now on paper and we can see it starting to change.” Holden has already announced that it will launch 24 new models sourced from Asia, the United States and Europe by 2020, with the Spark micro-car arriving in the first quarter (along with a facelifted version of the ageing Captiva SUV), while the new-generation Astra hatch will lob in the fourth quarter.

The company’s executive director of sales Peter Keley also confirmed at the event that the next-generation Cruze sedan would join the Astra hatch in showrooms, despite the company’s cool reaction when it was revealed in June.

Left: GM Holden chairman and managing director Mark Bernhard. Mr Keley claimed the new Spark “will be the best car in its segment, without a doubt” while Mr Bernhard said the company was determined to move away from its heavy reliance on Commodore sales, despite an all-new fully imported model due in 2018.

“The other thing that is going to happen is focusing on growth segments. As we move forward you will see a lot more product for us particularly coming into SUVs. We are not relying on where the market was – we are aiming for where the market is going,” he said.

As well as Spark and the dual Astra/Cruze small-car strategy, this will include a replacement for the Barina light car, a new-generation Captiva and another large SUV based on the E2XX platform that is also set to underpin the next Commodore.

Mr Bernhard put a positive spin on the brand’s current sales position but admitted its market share of 8.9 per cent – down from 9.7 per cent at the same point last year and 12.5 per cent in 2011 – was too low. It is currently in fourth position behind Toyota, Mazda and Hyundai.

“What has happened over the past three months is we have had volume growth in both absolute volume and also in market share year on year,” he said. “December is hopefully the fourth consecutive month. And we will continue to build. Is nine per cent share where we want to be? No, it’s not. But we are improving one month at a time.” Asked by GoAuto if the company would revise its aftersales strategy in the wake of the poor CSI results, in which it placed well below the industry average and behind every other top-10 sales leader (as well as Kia) – Mr Bernhard said Holden would stay the course and continue with its plans.

He did, however, admit that the results – revealed exclusively by GoAuto last week – made “sobering reading” and indicated that “we have a lot of work to do”.

“I think whenever you get results like that, first off you look at them and understand what is behind the results, so we have started that process,” he said.

“Having said that, we are very confident with the plans we have got in place. So in a short period of time, have we seen anything we need to do differently? No. What we need to do is execute the plans that we have got exceptionally well.

“Our service retention, where people pay money to come to our dealers, continues to improve, month by month. I understand survey results, but for me this is more important if people are coming back to the dealerships and spending money.

“Are we where we need to be? No. Are we improving? Yes. Step by step we will continue to improve.” While retention is improving, the Holden chief admitted that bringing new customers into showrooms – and improving the brand’s image – needed improvement.

“The brand is a little bit like our business, it is in a state of transition,” he said. “As we transition away from manufacturing to a sales and marketing company, we have got a lot of work to do. We have got to start to appeal to a different audience, but we have also got to honour the heritage,” he said.

“We have to start to appeal to modern Australia and get them back considering Holdens.” Holden executive director of marketing and consumer experience Geraldine Davys said the “modern Australia” that the company was trying to appeal to does not necessarily mean younger people, or a specific gender, but a more evolved buyer.

Company executives talked up Holden’s tech credentials, claiming it will be a leader in infotainment with the adoption of Apple CarPlay and Android Auto in Spark and the facelifted Captiva, as well as ongoing improvements to its MyLink connectivity system.

Its involvement with the Home Ground Advantage grant program which helps fund grassroots sporting clubs across the country and support of The Leukaemia Foundation also helps improve the impression of the Holden brand, according to Mr Bernhard.

“Are all of those things helping? Absolutely. Our first choice consideration is up 12 per cent year on year. Our brand opinion is up 12 per cent year on year. So the brand is growing stronger. And our corporate reputation is up eight places from 2014,” he said.