The sun may be about to set on production of Holden cars in Australia, with a report out this week claiming a document prepared for the local government, using information supplied by the General Motors brand, concluded that production of mass-market cars by the automaker was unviable. The document, which was leaked to the Adelaide Advertiser (via Carsguide), also revealed Holden may cease production as early as 2016, when the current VF Commodore is scheduled to be replaced.

Holden previously committed to building the next-generation Cruze and a new Commodore at its Australian plant until at least 2022, but due to economic reasons the automaker said it will require additional financial assistance from the Australian government to keep that promise. Holden is currently negotiating with the government, but the leaked document suggests the decision to end production has already been made. Furthermore, it was revealed only a few weeks ago that current Holden boss Mike Devereux is leaving his post to take up a more international role within General Motors Company [NYSE:GM].

Close rival Ford announced this year it would be ending production in Australia by the same 2016 date. If Holden goes, that would leave Toyota as the only producer of mass-market cars in the country, though the impact to the industry should Holden go, particularly to suppliers, would likely see Toyota also end its local operations.

Key reasons for the demise of the Aussie auto industry include higher wages than other production sites, stiff competition from cheap imports flooding in from low-cost sites and falling demand for large, rear-wheel-drive sedans.

Holden is planning a new Commodore for launch in 2017, though one based on a global platform and likely to be fitted with front-wheel drive as standard and all-wheel drive as an option. Furthermore, the document also reveals that after the VF Commodore ends its run Holden will no longer have a V-8 model in its lineup. A front-wheel-drive platform would also mean no more Commodore Ute, ending hopes of a return of the El Camino in the U.S. market.

It is not clear where any new Commodore will be built if Holden ends production in Australia. Also not clear is the fate of the Chevrolet SS rear-wheel-drive sedan, which is essentially a rebadged version of one of the sportier VF Commodore variants. If a successor is launched, it will likely be built in North America and not be common with any future Commodore.

Stay tuned for an update.


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