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New Holden chief aims to overtake Toyota by 2020

Big goals: The VF Commodore will go in 2017 and take a big chunk of Holden’s sales with it, but the company’s new boss still think it can return to top spot.

Return to sales leadership possible three-years after factory shuts: new Holden MD

4 Apr 2014

GM HOLDEN'S new managing director Gerry Dorizas has laid out a bold aim to usurp Toyota and reclaim top spot on the Australian sales charts by 2020, three years after the end of local Commodore and Cruze production.

In a wide-ranging interview conducted five weeks after he took the top job, Mr Dorizas said Holden was in the process of changing its mind-set to that of a full importer and away from a local producer, stating that while “we will always be historically an Australian brand”, times had changed, and it wasn’t all about Holden being the embodiment of ‘Down Under’ any more.

Mr Dorizas also stressed the importance of sharpening its marketing message to be consistent, saying Holden had the right product mix today to achieve its lofty goals, and also the need to re-invigorate its dealer network by going from second-last in dealer satisfaction (JD Power survey from December) to first, and thereby retaining service customers.

Speaking at his first public interview with Australian media last night, Greek national Mr Dorizas, who most recently served as the head of Volkswagen India, made the remarkable claim that Holden could reasonably claw toward 15 per cent market share by the end of the decade.

At the same time, said Mr Dorizas, market leader Toyota would contract from its current 18.9 per cent total market share as a result of continued market fragmentation. Toyota had a share as high as 23.6 per cent in 2008.

In comparison, Holden has 10.1 per cent share this year, up from 8.5 per cent this time last year but still well behind the Japanese market leader, and only narrowly ahead of top full importer Mazda. Furthermore, its top-selling Commodore is on its last legs, meaning its contribution of upward of 30,000 sales this year – on current form – could be lost before the target date.

“I think the strategy where we want to go is to go back to number one,” said Mr Dorizas. “Of course we need a product strategy which is being deployed. We need to focus together with the network, we need our focus as well.

“In a boxing match there are 12 rounds, we’re going through the eighth round and now we need to throw a punch.... market shares will start levelling out. We won't be 20 per cent, (but) 15 per cent for one brand maybe – everything will come closer together.

“We have what we need, we just need a product strategy for the future products, we’re covered well for products, we just need a little bit of time to focus and we will get there.

“It is a long way, at one particular time we wanted to save the factory, but now we have to re-focus. It will take time and a lot of work. The notion of ‘no worries mate’ is not the idea of how we work – we need credibility back. The mindset has already started changing.” Mr Dorizas – who in his long career with Fiat and Volkswagen has not closed a factory – added he was sad that production would cease, stating that “globalisation is eating everything”.

“It’s unfortunate that you come out with certain wounds (from globalisation) and one is with the auto industry. You've seen it in Europe, you'll see more in Eastern Europe, basically globalisation eats its kids. It's unfortunate but it's evolution and its changing.

“Where we were once considered to be Down Under, it's not ‘Down Under’ any more, it's (Holden) going to be considered multinational, just like Australia.” Interestingly, Mr Dorizas also warned that the current era of record-low car prices were unsustainable, but would not comment on whether Holden would be the one to ‘blink’ first and cease factory promotions.

“We have seen the prices fall in a big way. With the cost of living (here) being more expensive, if not more than double, Germany… that is not sustainable,” he said.

“I believe prices will go up at some particular time. How profitable are these dealers with sales? How profitable are they with the pushing of sales in order to do numbers?” Mr Dorizas compared this situation to pre-recession North America, stating that the number of dealers in North America had dropped from about 68,000 in the late 1990s to about 28,000 today.

Naturally, GM Holden’s brave claim sets the gauntlet for its Australian dealer network, though Mr Dorizas insists GM has the right product in the pipeline to get the job done. The key to selling it, he said, was to stay ‘on message’, and to have a long-term consistent approach to promotion.

Mr Dorizas also stressed the necessity of re-engaging the dealers as the starting point part of his 'back to basics' approach, saying they “have their heart in the right position” but must become better at retaining service clients and “delighting” their customers at purchase time.

Mr Dorizos said this was not strictly a Holden problem, but one experienced across the board..

It is worth noting that in a recent JD Power survey, released in December 2013, Holden finished second-last in dealer satisfaction, ahead only of Volkswagen and a long way from first-placed Mazda.

“I've gone from East to West. Met about 70 per cent of the network in terms of volume, all the metropolitan guys, gone to dealers and visited so far. I've got a fair amount of understanding of where we are and what has to be done.

“In Holden we want the best customer satisfaction.

“I can tell you we don't service the car park we have in Australia (meaning, it doesn’t get all its buyers returning to dealers for services), we have to get our customers back, delight our customers, work with dealer in training, technicians and advisors, installing standards into the network. Everybody needs to speak a common language.

“Another thing that is important to put in place is to have the most satisfied dealer network. If they're satisfied and profitable they invest in customers. It’s very important for us to be partners with the network. And we need to invest in people, not only in the company.

“The heart is in the right position. I believe we have the best network, but what we have to do is retain our customer retention... things are moving from sales-oriented to service oriented.” Mr Dorizas said having allies within GM would help Holden get the best products, and the ear of key decision makes. His predecessors Mark Reuss, Alan Batey and Mike Devereux have all been promoted further up within GM US or its International Operations (IO). GM IO executive vice-president Stefan Jacoby is also a former VW staffer, like Mr Dorizas.

“We will walk the talk,” he said.

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