News - Holden
Holden admits ‘challenger’ brand status: Buttner
Falling sales, share force shift in mindset for Holden from leader to ‘challenger’
22 Feb 2019
HOLDEN has admitted the company needs to shift its mindset from a leadership position to that of a “challenger brand” as it attempts to turn around its sales after a dramatic decline in fortune since the closure of its Australian car manufacturing operations in October 2017.
Senior management have long believed that Holden should be the leading brand in Australia, edging its way back to threaten Toyota for market leadership and reclaim the position it lost to the Japanese brand in 2003.
Since then, the lion brand’s sales and share have fallen to the point where it moved from a distant second in the marketplace to third behind Mazda in 2015, only to fall to fourth behind Hyundai in 2016 and then to sixth last year behind Mitsubishi and Ford as well.
Its annual volume has been slashed by more than 45,000 units since 2014, when it sold 106,092 new vehicles compared to 60,751 last year, which marked a 32.7 per cent decline over 2017 and a new low-water mark for the company.
Its market share was 5.1 per cent last year, down from 9.5 in 2014 – and 21.6 per cent in 2002.
Speaking to journalists this week at a media event at the Lang Lang proving ground in Victoria, GM Holden chairman and managing director Dave Buttner said that in order for the brand to be successful going forward, it needs to shift its mindset from that of a dominant sales brand to a ‘challenger’.
“Of course we always look for green shoots but we’ll never be arrogant or complacent with our current position,” he said.
“We recognise we’re a challenger brand and we’ll need to do things that epitomise what a challenger brand would do to re-establish ourselves in the marketplace.”
Mr Buttner conceded it was a tough pill to swallow to admit that Holden no longer belonged at the top of the Australian sales charts, however being realistic in its goals was a crucial step in getting the brand pointing in the right direction.
“I think it took a lot of soul searching,” he said. “Frankly, it was the first, most important step to make sure we’re developing the appropriate plans.
“The first thing – understand your current state, understand where you are, and if you’re very, very honest about that, you’ll find the right countermeasures and the right action plans driven by time and responsibility. If you don’t admit where you are, you won’t solve the right problems.
“If you admit that (you are a challenger brand) up front, we will do things very, very differently than if we are arrogant and complacent and thinking we’re still number one. So it’s never an easy thing to do but it’s the first, most important step.”
Mr Buttner laid out five key strategies that he said would help re-establish the Holden brand, and to make it sustainable in the future in one of the most competitive vehicle markets in the world.
The first is to leverage Holden’s relationship with parent company General Motors in the United States as much as possible, with the bulk of Holden’s future product to come from GM’s global portfolio – particularly models in high-growth segments such as SUVs.
Secondly, Holden aims to broaden the brand’s connection with the wider community, trying to leverage the passion many Australians have for the lion brand, and make them understand who the brand is today and what it stands for.
The third point of focus is “to engage very, very deeply” with its dealer network, stressing that the relationship was a symbiotic partnership that required both parties to thrive for the brand to be successful.
The former Toyota Australia president, who officially started with Holden in August last year, said one of his first acts was to travel around the country to speak in person with members of Holden’s dealer council, who among other things, wanted greater consideration of Holden’s products by potential customers.
Next up, Mr Buttner wants Holden to better connect with consumers, and providing them with products that satisfy their needs.
He said he wants to create “passionate brand advocates” while gaining repeat patronage from customers.
Lastly, the final point of focus is the product portfolio itself, and ensuring Holden’s line-up reflects the changing face of the automotive market by making sure it is offering competitive products in popular segments.
In the past, Holden’s bread was traditionally buttered in passenger cars, however the Australian new-car market has switched its focus to SUVs, and Mr Buttner wants Holden’s line-up to take advantage of this shift.
The company anticipates that 2019 will be the first year in which its SUV sales eclipse passenger vehicles, with a predicted 35 per cent of overall sales to go to SUVs and light-commercial vehicles each, while the passenger car segment will take the remaining 30 per cent.
Holden has planned for 2019 to be the year to turn around its sales decline, with a long-term goal of generating “sales numbers that don’t need explaining”.
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