WIB-601

Report on Holden Company

S268649

Table of Contents

Page Number
Executive Summary .......................................................... 2
1. Automotive Industrys Overview ..3
2. Market Share of the Automotive Companies3
3. PEST Analysis .....................4
4. Holden Company Profile ............5
5. Holden Companys Operations in Australia 5-6
6. Customer Reviews ..6-8
7. Problem within Holden Caprice Vehicles.9
8. SWAT Analysis ..10
9. Solutions for the power steering problem..11
10.Conclusion...........................12
11.References...........................................................................13-14

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Executive Summary
The Australias automotive industry is one of the most important sectors in manufacturing
industry that contributed positively to boost up the economy. Among lots of auto companies
in Australia, Holden is one of the major auto manufacturing companies that produce cars
locally based on domestic customers need. This report tries to present Holden customers
reviews, their operations and some problems encountered by Holden cars owners. This report
also provides some strategic solution to overcome those problems. Moreover, the report
particularly tries to focus on Holden Caprices power steering faults within the car. There are
many customers who reported problems regarding Holden Caprice power steering assistance
in Australia as well as from USA market. Therefore, Holden needs to come up with some
strategic solutions like Recall, Special Service Program and Lifetime Warranty to solve the
problem so that they can establish their strong presence in all over the world.

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1. Automotive Industrys Overview

Australias automotive industry is considered as one of the key players in manufacturing
sectors for not only contributing to the large scale of economic activities but also for creating
more job opportunities in the economy. Among total numbers of auto sales, 99% of passenger
motor vehicles (PMV) and 35% of other domestic motor vehicles are produced by local
domestic producers (ABS 2016). Australias automotive industry becomes number 31 out of
42 automotive producing countries (Kristjanson 2013). Though, they are not the major auto
producer countries in the world, Australias auto industry generated $21.5 billion annual
returns for the economy (FCAI 2013).
There are four auto producing company named Ford, Holden, Mitsubishi and Toyota situated
in Victoria and South Australia. In 2015, there were 164,376 units of cars produced locally.
Whereas in 2003, there were a record numbers of (909,811 units) auto sales in Australia
(ABS 2016). Recently, it is expected that there will be only 2% sales growth since the
domestic vehicle producers are going to cease their manufacturing operations by the end of
2017 (Australia Autos Report 2016).

2. Market Share of the Automotive Companies

There are 10 auto companies in Australia. According to the BMI research report, the market
shares and sales of vehicles (2015) are shown in the following table-

Company

Share

Sales Unit

Toyota
Mazda
Holden
Hyundai

17.8%
9.9%
8.9%
8.8%

206,236
114,024
102,951
102,004

Mitsubishi
Ford
Nissan
Volkswagen

6.2%
6.1%
5.7%
5.2%

71,743
70,454
66,062
60,225

Subaru
Honda

3.8%
3.5%

43,600
40,100

Source: (Australia Autos Report 2016).

3. PEST Analysis

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3.1 Political
Political factors such as government policy, regulation and tax have significant impact on
auto industry developments. Recently, government imposed changes regarding used car
imported in Australia so that they can restrict the parallel imports of private cars. Moreover,
the government policy for levy on luxurious vehicles causes imported vehicles price
increasing so that local manufacturers can compete with other competitors (Australia Autos
Report 2016). Since, the major manufacturing companies decided to cease their production
by the end of 2017 within Australia, the Federal Chamber of Automotive Industry (FCAI)
proposed to eliminate the levy on luxurious vehicles so that customers can afford imported
vehicles (Australia Autos Report 2016).

3.2 Economical
The economic conditions of the country also influence the growth of the automotive industry.
Therefore, it is very important to examine the economic situations before entering into the
industry. According to BMI auto industry reports, there will be a dropped off in new cars
sales due to dollar deflation (Australia Autos Report 2016). Thus, customers can not afford to
buy new imported cars from dealers. However, the dropped off oil prices may attract
individuals to buy more private cars.

3.3 Social
Social factors such as customer lifestyle, education and cultural limitations help business to
understand its customers need (Makos 2013). Generally, individuals who look for comfort,
social status and convenience buy private vehicles. The numbers of growing population in
Australia help to increase the demands for vehicles.

3.4 Technological
There are lots of significant technological developments happened in auto manufacturing
industry throughout the world. For more technological advancements, government planned to
invest $2.8 billion for innovation in automotive industry via the Automotive Competitiveness
and Investment Scheme (ACIS). Furthermore, throughout the year from 2005 to 2010, the
ACIS launched a program called Motor Vehicle Producer Research and Development for
developing new technologies as well as design for Australian local market (ABS 2016).

4. Holden Company Profile

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Holden started their journey in South Australia as a saddler in 1856. Now, they have more
than 230 dealerships and produce 44 models for local and overseas customers. For the local
customers, Holden offers Commodore sedan, Sport wagon, Ute and Caprice types of
luxurious cars. Holden headquarter in Australia is located in Port Melbourne. Moreover,
Holden is one of the fully-integrated global General Motors who designs, builds and sells
cars around the world as well as in Australia (Media Australia 2016).

The value of the company is providing customers the best possible driving experience in
Australia (Holden.com.au 2016). Holden has successfully stepped in all areas of automotive
sections such as auto production, service centres, new and used cars sales, financing car and
spare parts across the Australia. Though, Holden are going to cease their local manufacturing
of vehicles by the end of 2017, they are planning to import vehicles at a cheaper price to
compete in the local market. Holden achieved 3rd position in Australian new vehicle Sales
chart in 2015 (Australia Autos Report 2016).

5. Holden Companys Operations in Australia

Holden stated their journey as an auto manufacturer since 1950s in Australia. In Adelaide,
Holden started their production with a small fuel efficient Cruze car in 2011 and the
introduction of this Cruze car proved Holdens expertise on small car manufacturing and
engineering (Media Australia 2016).
Holden started to produce the VF Commodore that is the Australian most advance vehicle
ever manufactured in 2013. Use of lightweight technology and information system in VF
Commodore became role models for other Australian car manufacturers. At the end of 2013,
Holden declared that they are going to be imported cars and operated as a national sales
company in Australia and New Zealand (Media Australia 2016).
Holden launched their new range of European vehicles model in Australia in 2015. Besides,
they also announced that all new Spark and 5 doors Astra would be arrived in 2016 (Media
Australia 2016).

6. Customer Reviews
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An independent review company called Reevoo showed customers feedback regarding

Holden vehicles. According to Reevoo, the rating of Holden vehicle is on average 8.5 out of
10 based on customers review regarding Holdens comfort, performance, fuel efficiency,
quality, features and specification (Holden.com.au 2016).
Though, Holden is the first choice to many new car buyers in Australia, 68% owners of the
new Holden cars reported problems within 4 years of buying new cars. The numbers of
incidents reported regarding Holden is greater than the other two popular brands named
Toyota and Mazda in Australian cars market (CHOICE 2016).

Holden Commodore
Andrew
Andrew said that it is comfortable to drive and has a great engine. However, there is no radio
as well as missing out some basic equipment that Sedan has.
David
David rated Commodore 10 out of 10 as it meets all of his expectations. But, he also said that
this car has no option for a six-speed manual as well as no CD player inside the car.
Adam
He likes the head-up display and also appreciates the shifting of paddle towards steering
wheel. Further, he suggested that this car is not for those who are looking for fuel economic
car.
Scott
Scott experienced is positive as the comfort level is high within the whole car and it is very
user friendly car. Moreover, he said that this car is well designed and well engineered.
However, the radio reception is needed to improve a lit bit more than the current condition
(Holden.com.au 2016).

Holden Cruze
Stephen

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From Stephen point of view, Cruze has good features. But there is a problem in drivers side
window. Moreover, this car is not that much fuel efficient as he expected.
Clinton
Clinton said that Holden Cruze has great features. However, there is a lack of engine power
and less fuel economic car.
David
David found Cruze as a comfortable vehicle. But the voice activated navigation system is not
working properly within the car.
Yvonne
According to Yvonne, the new Cruze has more space and straight steers than the last Cruze
they owned. But, they are not happy with the acceleration Electrical system as well as about
the battery (Holden.com.au 2016).

Holden Astra
Richard
According to Richard, Holden Astra has comfortable seating, good sound system, enough
space for luggage and DAB radio within the vehicle. Additionally this car has lots of
functions like automatic lights, voice control, parking sensor and auto sensing wipers.
However, the navigation system is very hard as the information screen is not touch screen.
Michael
This Astra has the feature of Auto Start within the car. But, there are poor visibility problem
along with high repair cost. The rear sensors are not working properly as well.

Meneja
Holden Astra has a luxurious interior features within the models and it is comfortable to
drive. But there is no reverse camera and have restricted turning circle. Moreover, the seat
belts are very far away thus it is difficult to reach there.
Karen
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Karen said that Astra is very stylish and has sporty looks that make it different from other
vehicles in the crowd. But, there are problems in central display and functionality that are
outdated within this car (Holden.com.au 2016).

Holden Caprice
Zahid
Zahid said that it is good for business purpose and have plenty of space that provides comfort
to the clients. But, there are some problems in this model such as vibration and power
missing.
Vernon
This Holden Caprice looks very stylist to Vernon. Vernon also mentioned that the painting in
this model was best compared to other 12 Holden vehicles that he had. Conversely, this brand
new Caprice horn sound is pathetic. Additionally, the Bridgestone tyres are too noisy within
this car.
Gary
Gray said that the overall features like style, interior and fun to drive are excellent. But, there
is a problem with cruise control that it is not working properly when any collision happened.
Barry
According to Barry, Holden caprice is very powerful, comfortable and good looking car.
However, he said that the CD system within the vehicle is not that much good like WM
model (Holden.com.au 2016).

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7. Problem within Holden Caprice Vehicles

Taxi drivers complained that Holden Caprices (2013) have a problem with power steering
assistance within the vehicle (ABC 2016). According to ABC news 2016, there were more
than 500 cars affected due to power steering fault while driving in the road. One of the taxi
drivers Daljeet Singh mentioned that it is a suicide mission as the Holden Caprice lost
connection of power steering assistance during driving (Manufacturers Monthly 2016).

Though, in a police record it showed an incident regarding loss of power steering assistance,
Sean Poppit refused to agree any kinds of power steering problems that could lock up the
steering wheel (ABC 2016). But, when Holden started to investigate about this issue, they
found less than 100 vehicles having power steering problem out of 60,000 vehicles
(WheelsMag 2016).

Mr Poppit argued that there might be other issues such as steering rack and the fretting that
are not necessarily mean that the steering stops or lose connection while driving. On the other
hand, Mr. Singh said that if there was a fault found in US exported Caprice vehicles, the same
thing should be here in Australias Holden Caprice vehicles as well. Mr. Singh also argued
that out of 100 cars 50 vehicles had the same power steering problems. It means there is
something wrong with the manufacturing vehicles (ABC 2016).

The director of Holdens communication (Sean Poppit) said that the issue regarding power
steering failure was identified in 2014. Since, there was a power steering fault within
Chevrolet Caprice; Holden had to recall 6,280 police cars from the US market (ABC 2016).
The power steering defect was due to deterioration of the Korean power steering module and
torque sensor within the Caprice car (WheelsMag 2016).

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8. SWAT Analysis
Strength
Holden is an established well known brand among many first new car buyers in

Australia.
Holden has a strong alliance with a global brand named General Motors.
They are also specialized for manufacturing SUV and Minivans in Australia
Holden has a good brand image around Australia as well as New Zealand
Holden holds 3rd position within the Australias automotive industry.
Holden achieved great success in small and compact cars in Australia

Weakness
By the end of 2017, Holden is going to cease their manufacturing operations based in
Australia that might cause losing of local expertise advancements.
Holdens vehicles are not for those people who looking fuel efficient cars.
Holdens strong presence in auto industry is only limited within Australia & New
Zealand.
Opportunities
Holden Chevrolet might bring lots of opportunities in terms of sales
Though Holden will cease their manufacturing operations in Australia, they will
continue their operation as a national sales dealer or company by importing vehicles
at a cheaper price.
Holden can take the advantageous of distribution channel, expertise and technological
development benefits from parents company named General Motors to increase their
sales.
Threats
Holden shifted their manufacturing models from traditional fuels to hybrid & electric
powered cars.
Other competitors such as Japanese and Korean auto companies established a firm
position in the auto industry thus the surviving will be challenging for Holden.

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9. Solutions of the power steering problem

1. Recall all the Caprice vehicles

As, the parent company of Holdens General Motors recalled Chevrolet Caprice made in
Australia from US market to solve the power steering problem, Holden can follow the same
strategy over here in Australia for Holden Caprice vehicles to rebuild their reputation as well
as customers satisfaction (WheelsMag 2016). The report of US recalled pointed out that the
power steering default happened due to extensive idle time and high temperatures, thus
Holden should start proactively to contact with the owners of the Caprice to find out more
about the problems and try to fix it (ABC 2016).

2. Launch Special Service Program

The other renowned brand in Australia named Mazda faced the same power steering problem
within their vehicles. Thus, they introduced a plan called Special Service Program to provide
solution for potential power steering defect found in more than 50,000 vehicles. This program
will be conducted for Mazda3 vehicles exported to US market from 2007 November onward
(Blackburn 2010). Since Holden has the similar issue regarding Holden Caprice, they can
adapt the same strategy like Mazda did to provide solution for the power steering problem
within their vehicles. This might help Holden to regain their position as a market leader in
Australias automotive industry again.

3. Offer Lifetime Warranty

For the US Chevrolet Caprice, General Motors provided services regarding power steering
assistance without any cost. Whereas, a taxi driver said that he spend $1800 for steering gear
assembly to fix the power steering problem in Australia (WheelsMag 2016). Thus, Holden
should offer lifetime warranty for their upcoming Caprice models so that if anyone faces the
same problem near in future, he or she should get the services without incurring any cost.
Moreover, the current owners of Caprice vehicles should also get the same lifetime warranty
facility to fix the problem without incurring any cost now or in future.

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10. Conclusion
Holden has a long tie with Australias automotive industry. Though, Holden will cease their
manufacturing operations in Australia, they are planning to maintain a future long-term
relationship through over 200 dealerships across the country (Holden.com.au 2016). Thus, it
is very important to rebuild customers satisfaction so that Holden can achieve the market
leader position again. Since, Holden vehicles have some minor problems within their cars
regarding radio, CD, navigation system, seat belt, engine, cruise control and rear sensor, they
need to take some strategic decisions like recalling cars and investigating more about the
problems, launching special service program like Mazda did and offering lifetime warranty
for all existing and new owners of Holden vehicles.

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Reference
ABC, 2016, Taxi drivers warn of Holden Caprice power steering fault,
http://www.abc.net.au/news/2016-04-22/taxi-drivers-warn-of-holden-caprice-power-steeringfault/7348812.
ABS, 2016, Year Book Australia, 2005,
http://www.abs.gov.au/ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/22e7da19382
d4bb2ca256f7200833044.
Australia Autos Report, 2016, Part of BMIs Industry Report & Forecasts Series, BMI
Research,
https://online.cdu.edu.au/bbcswebdav/pid-171020-dt-announcement-rid5705709_2/courses/WIB601_Sem1_2016/au_auto_rpt.pdf
Blackburn, R, 2010, Mazda offers to fix possible steering fault,
http://www.drive.com.au/motor-news/mazda-offers-to-fix-possible-steering-fault-2010082713v3p.html.
CHOICE, 2016, TURNING LEMONS INTO LEMONADE, Consumer experiences in the new
car market,
https://www.choice.com.au/~/media/93fca6f74556402390197f4f1ed57955.ashx.
FCAI, 2013, The real value of our automotive manufacturing industry | Federal Chamber of
Automotive Industries,
http://www.fcai.com.au/news/index/index/year/all/month/all/article/341.
Holden.com.au, 2016, Holden Astra Reviews & Ratings,
http://www.holden.com.au/cars/astra/reviews.
Holden.com.au, 2016, Holden at a Glance,
http://www.holden.com.au/about/our-company/holden-at-a-glance.
Holden.com.au, 2016, Holden Caprice Reviews & Ratings,
http://www.holden.com.au/cars/caprice/reviews.
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Holden.com.au, 2016, Holden Commodore Reviews & Ratings,

http://www.holden.com.au/cars/commodore/reviews.
Holden.com.au, 2016, Holden Cruze Reviews & Ratings,
http://www.holden.com.au/cars/cruze/reviews.
Kristjanson, L, 2013, Submission to the Productivity Commission Review of the Australian
automotive manufacturing industry,
http://www.pc.gov.au/inquiries/completed/automotive/submissions/initial/counter/sub036automotive.pdf.
Manufacturers Monthly, 2016, Cabbies complain of Holden Caprice power steering
problems,
http://www.manmonthly.com.au/news/cabbies-complain-of-holden-caprice-power-steering.
Makos, J, 2013, Understanding Pest Analysis with Definitions and Examples, PESTLE
Analysis,
http://pestleanalysis.com/pest-analysis/.
Media Australia, 2016, About Holden,
http://media.gm.com/media/au/en/holden/company.html.
Skool-Study.Learn.Share, 2016, Holden Cars | SWOT Analysis | USP & Competitors | Brand
Guide,
http://www.mbaskool.com/brandguide/automobiles/5234-holden-cars.html.
WheelsMag.com.au, 2016, Taxi drivers target Holden, claiming steering fault,
http://www.wheelsmag.com.au/news/1604/taxi-drivers-target-holden-claiming-steeringfault/.

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