The company has cited the strength of the Australian dollar, high cost of production and the small size and competitiveness of the local market.
Holden will cease manufacturing cars in Australia by the end of 2017, Detroit-based parent company General Motors has announced. Around 2900 workers will lose their jobs — 1600 from the South Australian manufacturing plant and 1300 from Victoria.
GM Holden managing director Mark Devereux announced the closure in a statement, just before announcing the impending closure to the South Australian workers.
"This has been a difficult decision given Holden's long and proud history of building vehicles in Australia," he said. "We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people."
The move comes amid a Productivity Commission inquiry into car industry subsidies, announced in late October, charged with determining whether to increase taxpayer support to the local industry or to reduce it by AU$500 million.
General Motors CEO Dan Akerson cited an unstable market as well as a high cost of production as the reasons for the closure. "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world," he said.
Holden will maintain a "significant" presence in Australia beyond 2017, the company averred, including Holden dealerships, a national sales company, a national parts distribution centre and a global design studio.
"GM remains committed to the automotive industry in Australia and New Zealand. We recognise the need for change and understand the government's point of view. Moving forward, our business model will change significantly; however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers," Devereux said.