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Holden to ‘drive wedge’ into Toyota mining monopoly

Show you mine: Holden thinks Toyota’s strangle-hold on Australia’s mining market could have been weakened by restricted supplies caused by last year’s natural disasters.

Disaster-related delays, safety policies ‘window of opportunity’ for Holden Colorado

Holden logo15 Jun 2012

By HAITHAM RAZAGUI

HOLDEN believes stock shortages of rugged one-tonne utes caused by last year’s Japanese earthquake and tsunami, followed by the Thai floods, has resulted in a sales opportunity – despite natural disasters causing a six-month delay to the launch of its Colorado.

Speaking at this week’s Colorado launch, Holden executive director of sales, marketing and aftersales John Elsworth said mining fleets had been forced to consider replacing their HiLuxes with alternative products due to lack of supply.

He said this had opened the minds of fleet managers, who had previously defaulted to ordering HiLux after HiLux, and shown them the importance of diversifying their fleet as a way of protecting against future stock shortages.

In addition, Mr Elsworth pointed out that the timing of mining giant BHP Billiton’s recent announcement that it will only buy five-star safety rated vehicles will provide a “window of opportunity” if the Colorado – which is kitted out with electronic stability control and six airbags across the range – achieves five ANCAP stars when it is tested in August.

“I went over to the Pilbara in WA and all I saw was HiLuxes, white HiLuxes,” said Mr Elsworth, who stated Holden’s intent to “drive a wedge” into Toyota’s grip on the mining market.

However Toyota has confirmed it will upgrade its top-selling HiLux to qualify for five ANCAP stars next year and said a “grandfather clause” is included in its fleet agreements to keep fleets driving four-star-rated vehicles until the upgrades arrive.

Mr Elsworth agreed the launch delay had caused Holden to miss the boat on some sales from fleets that had already made their purchasing decisions for the first half of the year but that the company would not dwell on that as it has long-term goals for the vehicle.

13 center imageFrom top: Holden executive director of sales, marketing and aftersales John Elsworth Toyota HiLux.

He said 30 per cent of Colorado sales will go to the fleet sector, including mining, government and large company buyers, whose requirements are “exclusively functional”, placing the emphasis on capability, fuel economy and safety.

“To date we haven’t had the right product to be a strong contender, but the new range presents fresh opportunities for us.

“That said, private and SME is the engine room for growth in the LCV segment and this is where we see our biggest opportunity.”

Mr Elsworth said the Colorado was placed fifth in the overall LCV sector the third-best selling 4x4 ute among private buyers, despite restricted supply caused by the floods and the product being in runout since last August.

“Surprisingly the number one competitor (in the private 4x4 ute market) is Navara, and we think we have got the right product to mount a very serious challenge to some of these established players like the Navara.”

Mr Elsworth told GoAuto the six-month Colorado drought had been hard on some of Holden’s regional dealers.

“For them the Colorado is their bread and butter, they don’t care about Barinas and Cruzes.”

However he said the dealers had weathered the storm as the network is well-established and financially strong, pointing out how this strength had already been proven when wholesale financiers GE and GMAC withdrew from the Australian market during the GFC, leaving many dealers without financing capability.

Unlike the previous-generation Colorado, which was essentially a badge-engineered Isuzu D-Max and built in the same factory, the new model shares only its chassis with the Isuzu and is built in a separate, dedicated production facility.

Mr Elsworth said the split with Isuzu has helped Holden achieve a better price and equipment package while offering the dealers better margins because Holden no longer has to factor Isuzu’s royalty into the business plan.

He added that this has also benefited parts prices, making the new Colorado cheaper to run, reflected in capped-price servicing costs of $295 for the first four services – which he claimed equates to a $100 saving over the outgoing model.

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