Dollar crushing exports: Holden

HOLDEN could potentially double the number of vehicles it makes in Australia – if only the dollar lost 20 per cent of its value, the car-maker says.

GM Holden director of government relations Matt Hobbs told GoAuto that the company was still struggling with an Australian dollar that was beyond parity with the US dollar, as well as fighting a falling Japanese yen.

The weakening US dollar makes it harder for Holden to sell cars into the US, the Middle East and South Africa, while the devalued yen makes it much easier for Japanese imports to slide in under the price of locally made vehicles.

However, Mr Hobbs said a falling Australian dollar could help Holden by potentially doubling sales via its export program to countries including the US, where the new VF Commodore SS will soon go on sale as a premium rear-wheel-drive sedan.

According to Mr Hobbs, Japan’s deliberate attempts to weaken the yen alone had meant Japanese car-makers had cut manufacturing costs by 25 per cent since October, directly hurting the ability of Holden’s Australian-built Cruze small car to compete for buyers.

“The heads of Nissan and Toyota actually called for the weakening of the yen,” Mr Hobbs said.

“If you’re sourcing cars out of Japan, it’s happy days.” He said the falling yen had already made a significant impact on Cruze pricing, which had already “gone down quite a few thousand (dollars)” in recent months.

The high dollar has also hurt exports of the long-wheelbase Caprice sedan, sold into the US as the Chevrolet Police Patrol Vehicle (PPV).

“We’d be selling tens of thousands of police cars to the US, not thousands of them if we had an 85-cent dollar,” Mr Hobbs said.

“At parity, the export program based on the Caprice makes it a premium police car, and that doesn’t work in high volumes.

“People buy them (the PPV) because they’re great cars and they’ve benchmarked extremely well against competitors, except in price – that’s related directly to the dollar.

“We’re not asking the Reserve Bank to intervene in the currency, we’re not sure it works and it’s also very expensive.

“There are other mechanisms by which they can assist the industry.”