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Penfold revamps brand portfolio

One of the best: Penfold Holden has been in operation for almost 30 years, but the dealership group has now handed the franchise back to the car-maker.

Top Holden dealer hands back franchise – and takes on Volkswagen

17 Jul 2015

UPDATED: 21/07/2015ONE OF Melbourne’s best-known Holden dealers, Penfold Motors, has reluctantly handed back the franchise to GM because it is unable to reach agreement on a plan to downsize the Holden dealership to meet current sales expectations.

In addition to Holden, Penfold Motors has Mazda and Audi franchises and is opening a Volkswagen dealership in Doncaster. The company handed back the Mitsubishi franchise in 2012 and operates a fast-stock-turn used-car operation from that site.

The Burwood-based business was started in the well-to-do eastern suburbs heartland of Melbourne by Alan Johnstone as a used-car operation 51 years ago.

It took on Holden in 1987 and went on to become Holden’s top-selling Victorian dealer for 10 years.

Today it is run by sons Greg and Sam Johnstone.

The Holden decision follows discussions with GM about the future of the site which is geared for 20 per cent market share rather than the 10 per cent mark that Holden now hovers around.

In addition, the demographics of the market area are rapidly moving more upmarket and away from Holden’s traditional buyers. Holden share at Penfold has dropped to the point where they are now only sixth in the Holden sales stakes in Victoria while sales in the other franchises are climbing.

Greg Johnstone told GoAuto that continuing to run the Holden franchise in the current premises was “really not sustainable – we could not make it work”.

He said that Penfold offered to re-establish a new Holden dealership on the former Mitsubishi site which is a smaller site nearby but GM Holden “did not come to the party”.

He told GoAuto: “We really did not want to give up Holden but we did not have any other alternative site other than the former Mitsubishi dealership.

“We like Holden. We have sold a lot of Holdens and we would like to have them back at some stage.”

Mr Johnstone added that Penfold would miss the impact the Holden business, especially Holden parts sales, has on the company’s bottom line. He said that many of the staff at the Holden dealership will be transferred to Doncaster to run the new Volkswagen site.

He also said the company does not have any current plans for the Holden site which will operate for about three months more.

“We don’t have any other franchise to put in there and there are really no franchises that I know of that would be looking at it,” he said. “We could sell it or lease it but at this stage we really don’t know.”

GM Holden director of communications Sean Poppitt told GoAuto that there was hope that Penfolds and Holden could work together again in the future.

“Penfolds has been a strong partner with Holden for a number of years," he said. "The situation was dealt with on a completely amicable basis between both parties and eventually we were unable to come up with a mutually agreeable site.

“We fully hope that in the future Penfolds will be able to find another site and we will welcome them back into the Holden network.”

Mr Poppitt said that dealers were continuing to invest significantly in the Holden brand highlighted by a multi-million dollar new Holden dealership, Alto Holden, in Sydney’s Chatswood.

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