Holden Ltd. Business Information, Profile, and History

Company Perspectives:

Holden's vision is to be Australia's most successful auto company with a passion for excellence and absolute commitment to the customer. Holden's mission is to enthuse customers by providing quality products of outstanding value and ensuring a totally satisfactory experience over the ownership cycle.

History of Holden Ltd.

Holden Ltd. is one of Australia's leading automobile manufacturers. A subsidiary of General Motors Corporation (GM) since the early 1930s, Holden has nonetheless earned a reputation as an innovative automaker in its own right. The company has long dominated Australian automotive sales with its range of high-powered cars and sports utility vehicles, including the Commodore line of cars and the company's "Ute" trucks--a smaller, two-door, two-seat version of a sport utility vehicle. Holden designs, develops, and builds its own cars and engines, and also manufactures a variety of designs from other parts of the General Motors empire, including models from direct parent Opel, and others. While Holden remains tiny compared with the world's automotive greats, producing less than 150,000 cars and barely more than 35,000 light commercial vehicles per year, it is highly profitable, and flexible, capable of building some eight different automobile platforms on a single line. In 2003, the company's design and engineering prowess was recognized when GM announced its intention to export Holden's Monaro model to the United States to be marketed under the famed Pontiac GTO name. The Middle East remains the largest foreign market for the company's muscle cars, accounting for more than 75 percent of exports; New Zealand and the Pacific Southeast are also important markets for the group. Holden produces revenues of nearly A $6 billion per year, including more than A $1.2 billion in export sales.

Early 20th Century Origins

Holden's origins traced back to the mid-19th century, when James Alexander Holden emigrated from Staffordshire in England to Australia at the age of 17. Holden came from a family of leatherworkers, and in 1856, he set up his own saddlery and leather shop, JA Holden & Co., in Adelaide. Then just 21 years old, Holden quickly built up his business, and by 1865 had moved to larger quarters in the growing city. Holden was joined by son Henry James Holden in 1879 and the company then became known as JA Holden & Son.

Holden had by then expanded its business to include upholstery and other fittings for horse-drawn carriages. The arrival of a new business partner, Henry Frederick Frost from Germany, enabled the company to extend its range of operations to include iron and other metalwork, under the name of Holden & Frost. The company then began offering carriage repair services as well.

James Holden died in 1887 and son Henry James turned the company more fully toward its metalwork and repair business, before leading Holden & Frost into the production of carriages and coaches themselves. As such, the company was well prepared for the arrival of the new "horseless" coaches, and at the beginning of the 20th century began offering repair and upholstery services for the new automobiles as well. In the meantime, the company's leatherworking wing continued to prosper, particularly after it won a contract to supply saddles and bridles during the Boer War in South Africa.

Frost died in 1909 and Holden, now joined by son Edward Wheewall Holden, became sole owner of the company. Holden & Frost had by then become a supplier to the automobile industry, manufacturing hoods and fenders, starting in 1908. In 1913, the company began producing the bodies for motorcycle sidecars, and by 1914 had produced its first handmade automobile body.

World War I offered new opportunity as imports slowed dramatically. The Australian government, in an effort to conserve available shipping space, restricted automobile imports mainly to just the chassis. The government created legislation requiring that two-thirds of the chassis imported into the country be fitted with bodies built in Australia itself.

On the advice of a distributor, who reckoned that the Adelaide market alone would require some 5,000 auto bodies each year, Holden borrowed pounds 50,000 to launch a new company, Holden Motor Body Builders (HMBB). That operation distinguished itself by becoming the first in Australia to adopt the new mass production techniques pioneered by Henry Ford. During the war, the company had completed two prototype bodies, and in 1917 débuted its first finished body, fitted to a Dodge platform.

That same year, the company bought another local auto body builder, FT Hack Ltd. By year's end, the larger company had produced nearly 100 car bodies. Yet the company quickly ramped up its production, and by the end of its first full year in 1918, HMBB had built nearly 600 bodies. The company continued investing in new machinery, dramatically improving its efficiency--which dropped from 160 man-hours per car body to just five by the beginning of the 1920s.

HMBB quickly became Australia's leading automotive body producer, fitting not only Dodge vehicles, but also Ford, Chevrolet, and others. Production continued to rise, topping 500 car bodies per month in the early 1920s. By the end of 1923, the company was capable of building some 12,000 car bodies per year. The construction of a new plant in 1924, in the town of Woodville, gave HMBB the capacity to supply nearly half of the total Australian market. The following year, the company began producing closed automobile bodies for the first time. With the ramp up to full production at the Woodville site, HMBB now became the world's largest automobile body producer outside of the United States and the European continent.

By then under Edward Holden's leadership, the company began its relationship with the United States' General Motors during this period. GM had begun importing to Australia in the years following World War I, and had begun preparing to build its own bodybuilding plant in Australia. When he learned of this, Edward Holden traveled to Detroit and instead convinced GM to turn over its bodybuilding requirements to Holden. GM agreed, and backed by a contract for 9,500 car bodies per year, Holden invested in expanding its plant, adding hydraulic presses to the Woodville site. With assistance from GM, HMBB now became one of the world's most modern body plants, with production rising to more than 35,000 car bodies per year.

Merging for Survival in the Depression Era

GM entered Australia in 1926, forming GM Australia (GMA) and building car assembly facilities throughout Australia. Holden's fortunes continued to grow as GMA developed into one of the country's leading carmakers. Holden invested heavily in expanding its production through the end of the decade. The company also developed its own trademark, a Lion and Stone motif evoking the legend that a lion rolling a stone had given the inspiration for the invention of the wheel.

Yet both GMA and Holden were hit hard by the economic collapse of 1929. While Holden had concentrated on expanding its capacity, GMA had focused on production--but as sales dried up, Holden's production lines ground to a halt, while GMA found itself burdened with a huge stock of cars. By 1931, as both companies faced bankruptcy, they decided to merge, forming General Motors-Holden (Holden). The larger company was then able to arrange the loans needed to keep it afloat through the worst of the depression years.

Yet Holden continued to suffer at the start of the 1930s, as the company's sales slumped below 4,000 cars in all of 1932. Holden's future remained doubtful--in 1934, GM sent troubleshooter Laurence Hartnett with the mission of restoring Holden's profits, or shutting the company down altogether.

Hartnett's efforts paid off quickly, and by 1935, Holden once again posted a profit. By then, too, the Australian government had begun attempts to stimulate interest among the country's automakers for designing and producing the first all-Australian car. Hartnett decided to lead Holden into the race. As part of that effort, Holden transferred its headquarters to a newly built facility, including assembly plant, at Fishermen's Bend, in Melbourne. The company also continued to invest in new manufacturing equipment, and by 1937 was capable of producing all-steel cars for the first time. Local content by then accounted for 65 percent of the cars produced by Holden, which now had some 6,000 employees turning out more than 32,000 bodies per year.

The company began testing automotive designs in the years leading up to World War II. At the same time, Holden expanded its range of production expertise, so that by 1939 it had successfully constructed a complete vehicle, the Vauxhall 14.

The outbreak of World War II temporarily suspended Holden's work on its own car. Instead, the company turned its production capacity toward supporting the war effort, manufacturing aircraft frames, bomb cases, weapons and artillery, and armored vehicles and other transporters. Holden launched the production of aircraft engines, the first Australian company to mass-produce an internal combustion engine. As such, Holden built engines for aircraft, boats, and torpedoes. In support of its war production, the company installed its own foundry operations.

The First All-Australian Carmaker in the 1950s

Now capable of producing engines and precision mechanical components, Holden revived its quest to build the first all-Australian car. Design work began again in 1942 and by 1943 the company succeeded in building its first prototype, dubbed Project 2000. The following year, parent company GM gave Holden the go-ahead to proceed with the development of a full-fledged production model.

Following the war, Holden returned to its automotive body and assembly operations, turning out Vauxhalls, and then other members of the GM brand family, including Chevrolets, Buicks, and Pontiacs. In the meantime, Holden sent a team of engineers to Detroit to develop prototypes of the final model, as well as the manufacturing process to be used to produce it. Testing on the prototypes began in Melbourne in 1947.

In 1948, Holden officially launched the first all-Australian car--the 48-215, which later became known as the FX. Unlike competing models, the car was designed specifically for Australian driving conditions, including a rugged frame with a powerful yet fuel-efficient engine. The car, which benefited from trade tariffs put into place to encourage the domestic auto industry, also featured an attractive sales price.

Success of the new car was immediate, with a waiting list stretching well into the following year. By 1953, the company had already sold 100,000 cars. That year saw the launch of a new model, the FJ. Available in three levels, as well as a panel van, the FJ quickly outsold its predecessor, and became an icon in the Australian automotive market.

Over the next decades, Holden regularly launched new models. Exports of the company's designs started in 1955, to New Zealand, before spreading to include much of Africa, Asia, and the Middle East. By 1957, the company had completed its 1,000,000th car body, and topped one million cars with the EJ model launched in 1962.

While Holden became synonymous with large-sized, powerful cars, in the mid-1960s the company extended its range with a small car, the Torana, introduced in 1967. The following year, the company launched Australia's answer to the American muscle car, with a sports coupe called the Monara. That launch was backed up the following year by the first V8 engine built in Australia. By the early 1970s, Holden's automobile production had topped three million total cars.

Reemergence as a Leader in the New Century

The 1970s marked the début of another significant Holden vehicle: the Commodore, launched in 1978. The car quickly became adopted as an official vehicle, used by the police and by the Australian government. Yet the company was hit hard by the oil crisis, as Australian consumers flocked to buy more fuel-efficient--and often better built--foreign cars.

By the early 1980s, Holden had lost its position as Australia's leading car seller, as the Australian automotive industry entered a new period of crisis. The Australian government stepped in, launching the so-called Button Plan, in which the country's automobile makers began building cars based on each other's platforms. As such, Holden began producing the Astra, based on a Nissan design. Yet into the mid-1980s, Holden sales continued to slip, and in a move engineered by the Australian government, the company finally merged with the equally troubled Australian branch of the Toyota Motor Company. The new joint venture company was named United Australian Automobile Industries (UAAI) in 1988.

Development of new Holden models ended, and the company instead began producing Toyota models. At the same time, Holden began focusing its own engineering efforts on producing engines for the export market. The company's Commodore line remained popular, however, and by 1990 helped the company's own automobile production top the five million mark. The launch of the VN Commodore line also helped the company win back the Australian consumer, and in 1991 Holden once again had become the top-selling automobile company in Australia.

By 1995, Holden had regained its confidence, and in that year the company pulled out of the UAAI joint venture. Holden, placed under direct control of GM's Opel branch, now began sourcing its production models from the GM brand pool, and especially from Opel's popular European models.

Holden's years of difficulty had enabled the company to develop an extremely lean organization. Despite its relatively small size--with total production below 200,000 vehicles at the beginning of the 21st century, the company's production remained tiny compared with the more than five million vehicles produced by GM's U.S. operation each year--Holden was able to produce strong profits.

Part of the company's success was its growing focus on building high-powered automobiles, including the highly popular "Ute," a sort of small sports utility vehicle that had become highly popular in Australia. By the beginning of the 21st century, Holden had captured the attention of parent company GM itself. That company had abandoned production of the fabled Pontiac GTO in an effort to rescue its struggling Pontiac division. In 2002, GM turned to Holden for a replacement, starting imports of Holden's muscular Monaro--rebranded as a GTO--into the United States in 2003. Holden remained a flagship for the Australian automobile industry in the new century.

Principal Divisions: Holden Vehicle Manufacturing Operations; Holden Engine Manufacturing Operations; Holden Service Parts Operations; Holden Learning; Holden Innovation.

Principal Competitors: Toyota Motor Corporation Australia Ltd.; Mitsubishi Motors Australia Ltd.; DaimlerChrysler Australia/Pacific Holding Proprietary Ltd.; JGL Investments Pty.; BMW Australia Ltd.; ADI Ltd.; Sumitomo Australia Ltd.; Mitsubishi Australia Ltd.; Auto Group Ltd.

Chronology

• Key Dates:
• 1856: James Alexander Holden establishes JA Holden & Co. as a saddler and leathermaker in Adelaide, Australia.
• 1879: Company is renamed Holden & Son.
• 1885: Company (now Holden & Frost) begins repairing then building coaches and carriages.
• 1908: Holden & Frost begins upholstery repair for automobiles and begins producing car hoods and fenders.
• 1913: The company begins producing bodies for motorcycle sidecars.
• 1914: The first Holden-produced automobile body is launched.
• 1924: A new state-of-the art production plant helps support a contract to supply bodies for GM cars.
• 1931: Holden and GM Australia merge to form GM-Holden.
• 1936: Holden moves its headquarters to Melbourne and begins developing its own car.
• 1940: Holden shifts production to support the war effort, and begins building engines.
• 1948: The company launches the 48-215, known as the FX, the first all-Australian car.
• 1955: The company begins exports to New Zealand.
• 1972: The two millionth Holden automobile is produced.
• 1988: The company merges with Toyota Australia to form a UAAI joint venture.
• 1995: Holden exits from the UAAI joint venture and begins producing Opel-based car designs.
• 2003: Holden begins exporting its Monara model, to be marketed as the new Pontiac GTO in the United States.