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Holden’s biggest ever model launch to lure private buyers with the world’s highest TV

Holden logo8 Aug 2006

GET ready for VE overload! That’s the unashamed warning from GM Holden as it prepares to kick-off its biggest and most expensive new-model release campaign next week.

Central to Holden’s multi-million-dollar marketing campaign – revealed to media last week - is an attempt to attract a greater proportion of private buyers to Commodore, which will see the Lion brand’s per-car profit margins tumble as it rolls back pricing by up to a decade on some models.

Greater differentiation between Commodore sedan variants, an unprecedented array of accessories and an expensive, innovative publicity campaign will also be key parts of Holden’s drive to sell its fourth-generation Commodore in Australia’s declining large-car segment.

But it’s a plan to reduce Commodore’s dependency on sales to fleet buyers – which currently represent four-fifths of all customers – by targeting higher-profit retail sales that will be crucial in the quest to make VE Commodore make a return on Holden’s billion-dollar investment.

Asked whether its "price rollback" strategy will significantly reduce Holden’s profit margin per car, Holden chairman and managing director Denny Mooney told GoAuto: "Absolutely. VZ was 80 per cent (fleet purchases) and the margins were not good.

"So we’ve got to hit the sweet spot. The dealers want more retail (private) business. The margins on fleet business are much less than they are on retail business. So the total extra volume of retail (sales) will make up for the lower margins across the board," he said.

Mr Mooney said sacrificing profit margins in search of a richer (and more profitable overall) model variant mix was a strategy adopted early in the planning of VE’s marketing campaign.

As part of that, Holden’s first radical departure from marketing tradition is a limited-edition VE Commodore sedan to be available virtually from launch, rather than at the "run-out" end of the model cycle.

Dubbed Commodore V-Series and available only to private purchasers from September, the Omega-based sedan adds air-conditioning, 17-inch alloys, a rear spoiler and body-coloured mirrors and door-handles to the entry-level VE sedan’s standard feature list, for $34,990 - just $500 more than the base Omega auto sedan’s price ($34,490 without air).

 center imageHolden’s executive director sales, marketing and aftersales, Alan Batey (pictured at left), admitted the V-Series special, which will initially be limited to a production run of 2500 examples but could be extended, will steal sales from the base VE Commodore Omega ($36,490 with air).

But the net private sales – and therefore profit – increase over Holden’s current entry-level Commodore, the VZ Executive, is still expected to increase.

"Some of our plans relate to selling not only more large cars overall, but our objectives also extend to generating more sales to private buyers and user choosers, selling an improved model mix through more sales of Berlina, SS and Calais, and also selling more accessories," said Mr Batey last week.

Holden hopes a drastically different and better-value Commodore sedan range will not only keep its two-shift Elizabeth (South Australia) assembly plant at full capacity at between 135,000 and 145,000 vehicle per annum, but that two new V-badged short-wheelbase flagships (SS V and Calais V) will see it produce more premium variants.

While the stability-control equipped Omega effectively replaces both VZ Executive and Acclaim, and the slow-selling SV8 is discontinued, the VE Commodore SS more or less takes over from SV8 and the new SS V is a successor to the current VZ SS.

Berlina’s position between Omega and Calais is strengthened via a $3900 or 8.8 per cent price cut ($39,990 – down from $43,890, and $44,990 for the V8 - down from $48,590).

For the extra $3500 over Omega, Berlina gets the same upgraded 180kW V6/four-speed auto combination, but adds 17-inch alloys, unique front styling with foglights, rear park assist, side airbags, dual-zone climate-control, six-CD audio with Bluetooth and a leather steering wheel.

But it’s Calais that offers the biggest VE price reduction, to make way for Calais V.

Down a big 15.5 per cent or $8400 (from $53,890 to $45,490, or $5500 more than Berlina), Calais V6 adds a five-speed auto, Holden’s upgraded 195kW premium Alloytec V6 (with dual exhaust system), sports suspension, projector headlights, six-way power driver’s seat with leather bolsters, colour information display and side curtain airbags.

VE Calais V8 costs $50,490 – the same $5000 premium over the V6 as Berlina – and $8100 down on the VZ Calais V8’s price of $58,590.

For $53,490 ($400 less than the VZ Calais V6), the new Calais V variant adds 18-inch alloys, a full leather interior with the choice of two colours, eight-way power memory front seats, a 230-watt sound system, roof-mounted DVD player, rain-sensing wipers, alloy-look interior highlights and front park assist. Calais V V8 is priced at $58,490 - $100 less than the VZ Calais V8.

As Holden’s cheapest sports sedan, SV6 manual pricing remains unchanged at $39,990, while the auto now commands a $1000 premium. For the extra $3500 over Omega, SV6 adds 18-inch alloys, a sports bodykit, sports suspension, a 195kW V6, the choice of six-speed manual or five-speed auto transmissions, side airbags and a leather steering wheel.

Holden has given its SS sports flagship the second-largest price cut, with the VE version priced $6800 or 13.1 per cent lower at $44,990 (VZ SS: $51,790) despite the addition of an even more powerful (270kW/530Nm), quad-pipe version of the L76 Gen IV 6.0-litre V8 introduced this year (now dubbed L98), mated to a revised six-speed manual or an all-new six-speed auto.

Priced at $44,990 ($46,990 auto), Holden points out the manual VE SS’s $6800 price saving over the VZ SS "does buy a lot of fuel". Over SV6, it also adds a six-CD audio system and SS-embroidered seats, which are no longer trimmed in the leather that became standard this year for VZ SS.

While Holden introduced the VT Commodore SS manual at $44,160 almost a decade ago in 1997, options like power windows, traction control and a CD player pushed the price to $45,890 - $900 more than the VE SS price.

Finally, at $51,990 ($53,990 auto), SS V is priced just $200 higher than the outgoing VZ SS manual. It adds 19-inch alloys, projector headlights, dual-zone climate-control, side curtain airbags, colour-coded leather seats and instruments, a colour dash screen, alloy pedals and V badging.

Holden also used last week’s national VE media drive to announce a number of new accessory packs comprising 18, 19 and 20-inch alloy wheel designs, a name change for its Holden By Design accessories business, which will now go by the name HSVi (for "individual"), and details of its most expensive new-car release program ever.

Headlined by one of the world’s largest airships and the only one of its kind, the Holden Airship – officially dubbed Big Red but referred to by some wags as the Holdenburg – is 55 metres long, almost 20 metres high and has a 21.3 x 9.1-metre LCD TV screen.

Big Red made it maiden voyage, to the Lang Lang proving ground, last week and will spend its first month over Sydney before heading to all capital cities and major regional centres.

Though reluctant to admit it, Holden plans to gazump its rivals by flying over major sporting events such as the Toyota-sponsored AFL grand final, as well as the Formula One GP, Bathurst and Indy races with the world’s highest TV screen.

Finally, "Commodore Expo" will kick-off in conjunction with the VE’s release at all Holden dealerships from August 16, while a one-hour Channel Nine documentary on the development of VE Commodore will screen nationally on August 26, dubbed "Holden’s Billion Dollar Baby".

The brainchild of three Las Vegas businessmen and built by US company The LightShip Group, the A-170 Video LightSign will screen gigantic images and footage of the VE Commodore via 369,600 LEDs.

Backing all this up will be an extensive new corporate advertising campaign dubbed "Go!", which will promote not only Commodore ("Go like never before"), but Barina ("Go, go, go"), Viva ("Go for more"), Astra ("go your way"), Astra Diesel ("Go further"), Calais ("Go to the next level"), Statesman ("Go in luxury"), Caprice ("Go first class"), Captiva ("Go to new heights"), accessories ("Go individual") and V8Supercars ("Go Team Red” and "Go Skaifey").

Holden executives privately admit it all adds up to the biggest marketing spend ever undertaken by Holden, but won’t divulge actual figures.

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