Holden to slash new car prices by up to $17,500
Holden dealers will offer massive discounts of up to $17,500 as the brand winds down over the coming months.
The deals are likely to slash the price of a new Trax SUV to less than $15,000 - a discount of roughly $10,000 - while the Astra hatchback, currently selling for $22,990 drive-away, could drop as low as $14,490.
A senior dealer, who declined to be named, has confirmed that the discounts will become available from March 1.
It is believed Holden won't run national drive-away prices, instead giving dealers bonuses they can use to seal deals in the showroom.
The biggest dollar bonuses apply to Holden's biggest seller, the Colorado ute, which accounted for more than 40 per cent of the brand's sales last year. But the Acadia large SUV will also attract bonuses of up to $17,000, depending on the model.
The mid-sized Equinox SUV will be discounted by more than $10,000.
The imported Commodore, which was axed along with the Astra last year, will attract a $7500 bonus.
The deals are likely to cause big headaches for competitors, who are faced with the choice of matching the deals or losing market share. The biggest impact will be felt in the booming 4WD ute market.
The move will also create tension with existing customers and those who have placed orders but not received their cars.
Experts say customers should look at the fine print of any order they may have placed and give serious consideration to cancelling the order or renegotiating the price, as the value of their new car is about to take a massive hit.
The chief executive of the Australian Automotive Dealer Association, James Voortman, says buyers have the right the reassess their purchase in the light of the Holden announcement.
"By the same token, any dealers affected in that way could seek compensation from General Motors," he said.
Mr Voortman said it wasn't fair for Holden to simply hand out bonuses on new cars, without compensating dealers for their losses on used stock.
"Any incentive program Holden puts in place in relation to discounting of their vehicles mustn't lead to unequal treatment of their dealers.
One Holden dealer, who declined to be named, said many dealers would not be able to pass on the full bonus given to them by Holden.
"People have to put it all in perspective. Holden is saying this money has to cover any losses a dealer might have to wear on their used car stock, demonstration models or any trade-ins they've committed to," he said.
Resale values of low mileage Holdens are expected to plummet in the wake of the discounting and Holden's withdrawal from the market, leaving dealers who have given trade-in valuations exposed.
"What Holden is doing is giving the dealer a pile of money they can trade with," he said.
He warned that customer orders are legally binding.
"If someone has ordered a car, a dealer can enforce it. After all, the dealer didn't do the wrong thing here," he said.
The sell-off is expected to damage the used car market, especially late-model used cars and demos that could potentially be more expensive than a brand-new Holden.