Inchcape considering GM Holden business case: report

UK-BASED automotive importer and distributor Inchcape is assessing the possibility of taking over GM Holden’s operations in Australia, according to a report in the Australian Financial Review.

The report says that Inchcape Australia is gauging the commitment of GM’s Australian operation as a full-time importer, following its switch from being a local manufacturer in October 2017 with the discontinuation of the locally built Commodore.

Since becoming a full-time importer, Holden’s Australian sales have suffered, dropping 32.7 per cent, from 90,306 vehicles sold in 2017, to 60,751 in 2018.

Furthermore, GM’s global operations have been under a restructure, with it announcing in November that it would axe 15 per cent of its global workforce – equating to about 15,000 jobs – but said that Holden and its locally based design and engineering operations would be exempt from the job cuts.

Inchcape Australia is currently the local importer and distributor for Subaru Australia – a role it has held since Inchcape arrived in Australia in 1973.

In May 2017, it took over distribution of French brands Peugeot, Citroen and DS from former importer Sime Darby Motor Group, which had previously overseen the brands in Australia since 2001.

It also owns Trivett automotive group, the luxury-car dealer network with 23 dealerships that account for 1200 jobs and 25,000 annual sales across 21 different brands.

According to the report, Inchcape is investigating whether GM is willing to leave its factory-backed operation as part of its global restructuring, and the two companies are currently engaged in slowly progressing bilateral discussions.

AFR also says one of the big four accounting firms is assisting with “due diligence”, looking at how various scenarios could play out for GM.

It is unsure at this stage if Inchcape is chasing Holden’s business through a merger and acquisition, or a joint venture with GM.

A GM spokesman told AFR that the company is helping turn around the Holden business with the appointment of former Toyota Australia president Dave Buttner in August while “re-engaging and re-energising our distribution network” to help build “a strong network for the future, as it remains an important part of GM’s business”.