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It’s fair to say General Motors’ decision to close Holden was not a popular one amongst the car-loving population of Australia (blue-blood Ford fans excluded). But in 2025 GM’s decision could be justified if its new vision for our market pays off.
That vision, of course, is the switch to running under the General Motors Australia (and New Zealand) banner, with GM Specialty Vehicles (GMSV) offering Chevrolet and GMC models as well as the long-awaited introduction of Cadillac to our shores. GMSV, which sells the right-hand drive converted Chevrolet Silverado and soon the GMC Yukon as well as the Corvette range, sits under a separate banner to Cadillac, but it’s all one big happy GM family behind the scenes.
This new business model will never see GM achieve the kind of sales volumes Holden did, but it has the potential to be a very profitable business for the American automotive giant. However, it will need to enjoy a successful 2025 if it’s to feel good about its long-term hopes in Australia, with several major challenges ahead of it.
Firstly, there is its existing Silverado line-up, which faces increased competition from the Ford F-150 and Toyota Tundra, as well as the new-generation Ram 1500 due in 2025. These new rivals arrive amid a decline in sales for the ‘over $100k ute’ segment, which feels inevitable given the expense and fit-for-purpose nature of these types of US-style pickups.
Silverado sales are on course to finish well up on the segment (nearly 15 per cent for the Silverado 1500 and more than 20 per cent for the Silverado HD), but maintaining that kind of growth in ‘25 will be crucial to the long-term viability of both Chevy models — and potentially the overall ‘big truck’ market.
To diversify, GM Australia decided to introduce an SUV to its mix — the GMC Yukon.
This works on multiple levels for the company as the Yukon is based on the same platform as the Silverado 1500 GMSV is already converting, but is a more luxurious model and therefore can carry a higher profit margin.
It will become the only full-size SUV with a V8 engine and is loaded with space and creature comforts, the Yukon will be a tough sell. It’s priced from $169,990 (plus on-road costs), which positions it well above (circa-$20k) the Toyota LandCruiser 300 Series, its most obvious rival, so it high volumes won’t be likely but it could add meaningful sales to GMSV’s bottom line.
Then there’s arguably GM Australia’s biggest risk — Cadillac. The American luxury brand is finally expanding its operations beyond North America, but there’s an obvious question around the timing of launching an all-electric brand now.
Demand for electric vehicles has, at best, cooled off after a sudden surge a few years ago (when GM was making its decision). However, the brand’s first Australian-bound model, the Lyriq SUV, undercuts its key rivals from BMW, Mercedes-Benz and Audi on price, so it stands some chance on conquesting luxury buyers.
There’s also a chance that Australian buyers will surge towards this all-new but very well-known brand in the market. We’ve seen an Australian soft spot for similar American vehicles in the past, such as the Corvette and Ford Mustang, and while the Cadillac Lyriq is a very different proposition it’s not outside the realms of possibility that Australians will be attracted to it.
There are some fairly large ‘ifs’, ‘buts’ and ‘maybes’ surrounding General Motors’ Australian chances in 2025 so it could go either way. On the plus side it could establish its roots for even further growth, but on the flip side there is potential for a rough year that could cause GM’s Detroit management to re-think its Australian outlook. Only time will tell which way that will go, but we will watch General Motors’ sales performance with great interest next year…
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