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Holden dealers told to slash new car prices but full discounts unlikely to flow to buyers

Josh Taylor
Photograph: Morné de Klerk/Getty Images

Holden dealerships have reportedly been told to slash prices on remaining stock from next month, but massive discounts on brand new Holden cars as high as $17,500 off are unlikely to completely flow through to customers, according to one dealership.

Holden’s parent company, General Motors, announced this week that Holden would cease to operate and the brand would be retired by the end of 2021, costing the jobs of around 600 staff in Australia and New Zealand.

The company’s senior vice-president, Julian Blisset, said the closure was due to being unable to reach a scale of sales in Australia and New Zealand that would make the brand viable.

There are 185 Holden dealerships across Australia, and sources say GM is in the early stages of negotiating packages to help suppliers and dealerships transition. The exit from Australia and New Zealand, as well as manufacturing in Thailand, is expected to cost the company over $1bn.

Related: A history of Holden in Australia – timeline

Car Advice reported on Wednesday that a confidential bulletin sent out to Holden dealerships has detailed how much dealers could be cutting prices on cars from next month, in a bid to move the cars out the door before the end of the year.

According to the report, a Holden Astra hatch/sedan could be as low as $12,000, with $8,500 off. While a Holden Colorado ute could be anywhere between $13,000 and $17,500 off the price. A Holden Equinox SUV could be cut by $10,750, down to around $20,000.

Dealerships have been flooded with calls since the report, suggesting people may be hunting for a bargain on the soon-to-be collector’s items of the former Holden brand.

But when the next round of sales commence from 1 March, many may not find the deal they were expecting.

Phillip Mance, the managing director of Alan Mance Holden in Footscray in Melbourne, told Guardian Australia the money mentioned is often moved around by Holden dealers to cover selling off old stock, and may not be passed on in full.

“Certainly there’s going to be fantastic discounts, but nothing to $17,500,” he said.

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“The discounts are quite substantial, but not all that money is going to be passed on because a lot of it is being used to clean up cars. You might advertise one car and put the money onto the other.”

Mance sells eight other brands of cars out of dealerships, and said he had witnessed a steady decline in sales of Holden over the past few years, which had been replaced with Asian car brands such as Kia, Mitsubishi and Suzuki.

“We’re in Asia. Our taste in cars is based on Asian car manufacturers because that’s all we’ve known,” he said.

“I’ll shuffle things around. It’s not as big a deal for me as other people.”

Holden has said it will continue to offer parts and services for the next 10 years on cars sold today, and Mance said that would be a way for dealerships to continue to survive.

“The back end is where you make most of your money so if anything it will be better because you’re not selling the cars but you’re servicing the cars,” he said.

ASX-listed car dealership AP Eagers, which owns 10 Holden dealers in Queensland and Tasmania, told the stock market earlier this week it was still too early to say what the impact of the closure would have on its finances until the transition package had been negotiated with GM.

“We are expecting General Motors to be fair and reasonable in relation to the transition and compensation arrangements and to fully recognise our partnership that has spanned 90 years as well as the current commitments we have in place to represent them.”