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Holden finance deal boosts sales 100 per cent

It’s a deal: Holden enjoyed a week of sales bliss with customers swarming to its 0.5 per cent finance offer on cars such as its embattled Commodore.

Holden says its finance deal was a winner – but is not so sure about other schemes

Holden logo30 Aug 2012

HOLDEN doubled its regular sales rate during a recent one-week 0.5 per cent finance sales campaign, injecting much-needed volume in August after a 17.4 per cent sales slump in July.

But Australia’s second-biggest car company has warned buyers to be careful of similar offers from other companies, saying they could be left with a car worth less than they bargained for after their finance term expires.

Holden sales, marketing and aftersales executive director John Elsworth said this week that Holden’s finance deal, which ended on August 15, had resulted in a 100 per cent increase in customer orders.

“It certainly worked, I can tell you that,” he said. “Our floor traffic over that period made a Holden dealership a very different place.”

Mr Elsworth said Holden’s offer – backed by the four largest financiers of Holden dealer floor stock – was a good deal for customers, leaving them with a fair residual value on their vehicle after the finance term ended.

“Others don’t do that,” he quipped.

 center imageFrom top: Holden's John Elsworth and Mike Devereux.

While Mr Elsworth and his boss, Holden chairman and managing director Mike Devereux, did not name names, they indicated that the fine print of some other low-finance deals could hide a problem for cars buyers in the shape of residual equity.

“You need to look at balloons and things like that,” said Mr Elsworth.

“You need to look at the mechanics of how we created that (Holden) deal, and it is a fantastic offer when you finance a car over an extended period.”

The finance offer was the first of its type from Holden, and its success seems set to prompt the company to give it another try at some point.

However, Mr Elsworth said such tactics needed to be used sparingly, as it was not only expensive but the market soon worked out what was going on and would come to expect it.

“The trick with any sales event or marketing tool is to not let it get stale,” he said.

The recent deal meant buyers could save thousands of dollars in finance interest over two to four years, although the deals were made on the full list price of Holden cars, whereas usual sales commonly result in some sort of price discount.

Mr Devereux said it was important to Holden to ensure that customers got a fair deal in the finance offer.

“We are trying to make sure that when someone is finished with a two or three or four year deal that they are in a good situation, they have a good residual on a car and they are not in a problem,” he said.

“One of the main pillars of Holden is that we try to take care of customers when they come in for service, or whether we are trying to get them into a car.

“Australians should be able to trust our brand. I feel that when someone buys one of our cars, they can trust us. Full stop..”

Mr Devereux said Holden experienced a massive increase in website “click-stream” traffic from potential buyers checking out the finance deal online“Our dealers are transferring that inquiry into fair, good deals,” he said.

So far this year, Holden sales are down 11.3 per cent, to 65,119 units, mainly on the back of a 25 per cent slide in sales of its top-selling Commodore large car.

Holden is getting set to expend its Cruze range with the addition of the Korean-made wagon later this year, along with the Colorado 7 – an SUV version of the Colorado ute – and, from early next year, the Malibu mid-size sedan and Trax compact SUV.

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