High Aussie dollar threatens more Holden exports
Before you start sweating, rest assured Holden's VE Commodore will be heading Stateside as the Pontiac G8, but as for other models such as the two-door Ute, things are looking in doubt. GM Vice Chairman Bob Lutz is a key backer of bringing the Ute to the U.S. but revealed at this week's Frankfurt Auto Show that the export program could be in doubt because of the strong Australian dollar. Either the car-based pickup would be priced out of the market or GM would have to subsidize it, something that's not going to happen, Lutz informed.
Plans to import roughly 50,000 Pontiac G8s are unchanged but the margins made on the car will be very slim, meaning there's no room to add a variant priced below it. This will come as a major blow to Holden staffers. Almost half of its annual production of 147,000 cars is exported and gaining a foothold in the lucrative U.S. markets has been one of its key goals over the past decade.
[Source: Drive.com.au]
Reader Comments (Page 1 of 2)
jurm 3:34PM (9/16/2007)
I'm of the thinking that it's not so much the strong Australian Dollar, but rather the weak American one.
I Remember when you'd get Canadian coins back as change at the gas station and feel cheated. Not so much anymore, as the Canadian dollar and the USD are close to equal value. ($1.03 Canadian = $1.00 USD).
Yeah, this is only one currency:currency comparison, but I'm fairly certain it's not an isolated occurrence; what with current inflation rates.
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Barney 4:15PM (9/16/2007)
Exporters to the USA are getting concerned. There is a large consumer base in the US and those consumers can't afford the same anymore. Holden is just a small bit of it.
F451 4:16PM (9/16/2007)
Yes, this is certainly not something to blame on the Aussie's as the US dollar is at fifteen year low...I wonder why (rhetorical question)?
66coronet 7:59AM (9/17/2007)
Why don't they do the same as dodge sprinter. Ship the vehicle in kits and assemble over here. Find a plant that is closing and use that sight. Maybe ship the car without front fenders and without interior. I figure GM would want to chevy-ize or american-ize just to change it a little. Even though it's just fine as is. Just like they do with the mercedes sprinter made into dodge sprinter.
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RicardoHead 5:22PM (9/16/2007)
Sometimes I think the Fed is too quick to drop interest rates. Anytime the dollar gets a bit of strength, Bernanke and his moronic minions find another reason to tick rates down or hold them flat. I suppose I wouldn't care so much if US incomes were rising as fast as the dollar is dropping, but the world's largest consumer market has basically taken a 40% cut in its relative purchasing power since it peaked 5 or 6 years ago, and is maybe 20% or so below what is generally considered "normal." That type of stuff will have negative ramifications worldwide if it goes too long because it will eventually affect primirily the European, Canadian, and Australian economies, which could then have a serious ripple thru the rest of the world.
The Fed needs to start considering international effects as well as domestic in its decisions, however likewise the idiots in Capital Hill need to put a plan together to balance the budget and therewith lift foreign confidence in the US dollar.
Similarly some of the other major central banks need to consider their relative position and the effects on their economies of having too strong a currency against the dollar. My friends in Munich - one of the strongest economies in Germany - do not sound to positive on the employment and business outlook, so if they are hurting, others are also.
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Jim P. 2:02AM (9/18/2007)
To comment further on your post RicardoHead, one of the biggest frauds we have in our country is the Federal Reserve. Most people in this country have no idea how it was created, who runs it and what their real objectives are. The Federal Reserve (FED) isn't part of the Federal Gov't. They are a private corporation. They have no oversight agency they report to.
Thomas Jefferson is quoted as saying: "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
That's what has been going on since our forefathers laid the foundation of this nation. It was sealed by the passage of the Federal Reserve Act in 1913.
When George Bush Sr kept calling for a 'New World Order', he was talking about these elitists who have an agenda to control the world economically, which to a large extent they do already. They need the US economy to collapse for their plans to go forward. They've devalued the dollar so much that it's buying power is worth squat just about. These people get richer on the backs of the middle class and poor in the whole Western World.
Here is a few links you should check out if you have time
http://video.google.com/videoplay?docid=-515319560256183936
Ron Paul speaking against the Federal Reserve
http://uk.youtube.com/watch?v=ji_G0MqAqq8
Crunked Up 5:30PM (9/16/2007)
Leave the Ute down under. The world doesn't need another El Camino.
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kyler 5:38PM (9/16/2007)
are these utes available in canada? i swear i saw one the other day.
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Barney 6:23PM (9/16/2007)
Low interest rates induce more people to spend. New cars and new homes are more probable with lower payments. Developers are more willing to risk an investment as well.
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RicardoHead 6:34PM (9/16/2007)
That's what the Fed argues also, Barney, but when it comes to international currencies lower relative interest rates tend to drive investors away from the currency with the lower rate because they can get a better return elsewhere. It's all relative and there are other factors, but the Fed rate plays a vital role in the value of the currency. Currency flowing out of the country like a leaky dam ($700B trade deficit) does not help either, because there are too many dollars on the open market, but if interest rates were higher the proclivity of international investors to stick their conservative investments in USD-denominated assets would be higher, thereby reducing the supply of dollars available for conversion (or raising demand for the USD) and thus strengthening the USD.
Barney 8:47PM (9/16/2007)
Your right about the investors RicardoHead but that isnt't always dependent on the market. Canada investors are squirming because Canada mainly exports. Yet with the lowest interest rates and the highest dollar value, Canada's economy is booming. Mortgage investors in the USA are probably relieved at the present interest rate. Americans claim to pay less in tax's. However their military spending is more then most countries entire budget.. Someone has to pay the bill and it is not corporations who pay for it. They make on it.
Barney 6:26PM (9/16/2007)
"The world doesn't need another El Camino. "
There aren't any new El Caminos and the world don't "need" more cars. If the "world" wants a practical pickup, this would feed the niche'.
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Hilly 9:04PM (9/16/2007)
Hello Barney. The Holdern ute is going for style more than a work horse. Here in Australia the Ford ute is going for style as well as a work. When the new ford orion comes on the market for 2008 around March, it will even be a better ute, and there is talk of export
Barney 9:22PM (9/16/2007)
Hi Hilly. In North America few need a workhorse. It's mostly for show that people buy the big pickup truck. The many that need a pickup for light duty, will "hopefully" buy the ute. I recall seeing these trucks in Australia in the early eighties. I understood the practicality and glad to see you haven't gone for "show only". Perhaps the American public will too.
Crunked Up 8:41PM (9/17/2007)
@ Barney
"There aren't any new El Caminos and the world don't "need" more cars. If the "world" wants a practical pickup, this would feed the niche."
How, pray tell, do you consider a 2 seat car with a light weight frame & a big V-8 practical? The El Camino died in the U.S. years ago for good reason. This would only fill a niche for someone nostalgic about the El Camino.
GM needs to leave this one to the Aussies & concentrate on improving their image here. Look how well the SSR sold. This my friend, would be another SSR.
Barney 12:12AM (9/18/2007)
Crunked Up "How, pray tell, do you consider a 2 seat car with a light weight frame & a big V-8 practical? "
V8? The article made no mention of the V8 but did say V6. You don't need a big clumsy pickup truck to go get a sheet of plywood, the new drawer chest or the odds and ends for the gardener. The El Camino and Al Rancho sold for decades until pickups got more comfortable and became the macho fad.
TriShield 6:42PM (9/16/2007)
Our currency is dropping like a rock, and it makes all imported goods more expensive.
The weak US dollar is the reason the Saturn Astra imported from Belgium will not make a profit no matter how many units GM sells. It's also the reason the Pontiac G8 will not have a high profit margin. Like this news says, the US currency situation will likely kill future Holden exports.
GM's other option is tooling US plants to assemble these models like it has the new Saturn Vue. The new Vue is based on a Daewoo and virtually the same as the Opel counterpart assembled and sold in Europe. GM could do this with Holden cars as well. Despite that put me in the camp that doesn't want to see a Holden with GM US switchgear, radio headunits and other parts in it.
The currency situation is especially bad news for Holden as they depend on exports to sustain their business. That's why exporting the new Commodore and all it's variants are vital to them and GM. If Holden cannot open more markets for their products GM will end up subsidizing that operation entirely.
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500 12:38AM (9/17/2007)
If GM would get their head out of their collective a$$ and finally build a competent, reasonably-priced RWD platform in the US, they wouldn't need to worry about the cost of producing these Holdens. They'd quite likely get my dollars too.
Barney 12:16AM (9/18/2007)
"build a competent, reasonably-priced RWD platform"
The American dollar may have declined but the cost of building vehicles didn't. Just where in the USA would a "reasonably priced" vehicle be made? The parts are mostly imported from the south or the north.
TriShield 10:26AM (9/17/2007)
500, the upcoming Camaro is built off the new Holden Commodore/Ute's structure and is being produced in a North American plant. They're also going to make a new Impala out of it as well and produce it here.
That doesn't actually mean they will look or drive like a Holden though. Keep in mind GM produces the Malibu, G6 and Aura off the guts of the Opel Vectra here but none of them really look or drive like the Vectra they asseemble in Europe.
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