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Can Supercars survive the death of Holden?

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22nd January, 2020

Looking at the challenges posed by the departure of Holden and the search for marketplace relevance.

Season 2019 wasn’t a great year for the Supercars management team. Lots of challenges and issues arose on and off the track that generated all sorts of controversy and occupied a huge amount of the administrators’, competitors’ and fans’ time and effort.

One of those issues seemed to get papered over with a “business as usual, nothing to see here” response from Supercars that many seem to have accepted at face value. To be fair to Supercars, it had no impact on the 2019 competition, and in all likelihood, will have minimal impact in 2020 and possibly 2021.

But there’s no doubt that the wheels are turning and a seismic shift is coming. There’s no if with this one, merely a when and a huge what – what does it mean to the competition?

When Holden announced the discontinuation of the Commodore and Astra in December 2019, it probably didn’t surprise many. The planned pivot to focus exclusively on selling SUVs and utes is in line with how the Australian domestic market has evolved over the last decade and how Holden’s share has evolved within that market, particularly since the end of local Commodore production and the introduction of a poorly-received European-manufactured replacement.

The response from Supercars and the teams was as expected – expressing sorrow for the passing of an Australian automotive icon, acknowledging the huge role that the Commodore has played throughout the history of the Supercars competition and a reaffirmation from Holden and Supercars of the existing commitment to support Supercars and Triple 8 as the official Holden factory team through to the end of 2021 (coincidentally, when the current technical regulations are due to be updated).

There were also statements to the effect of Holden is working with Supercars via the Manufacturers Council on the evolution of the Gen3 regulations (to be effective 2022), with the implication that Holden will continue to be a part of the competition in 2022 and beyond – even though they don’t have a car (current or planned) in their model line-up that could be used as the basis of an entry.

Jamie Whincup drives at Bathurst

Jamie Whincup drives the #888 Red Bull Holden Racing Team Holden during practice for the Bathurst 1000 in 2019. (Photo by Robert Cianflone/Getty Images)

The real question is will Holden still be around in 2022? There was a time – not so long ago – that to question Holden’s very existence would be the musings of a madman. But times change in the automotive world – quickly.


As Roland Dane told Speed Cafe on December 10 in his response to the announcement of the cancellation of the Commodore, “the world is changing, the automotive world is changing, almost faster than any other part of our daily lives at the moment”.

When you strip away the emotion and look at the harsh reality of the situation, the death of Holden isn’t as far-fetched as it may seem.

Holden is a business. It’s the Australian arm of a much bigger business, General Motors. And, ultimately, when it’s all said and done, business isn’t about emotions – it’s about numbers.

The bottom line is that the numbers don’t look that good. They haven’t looked good for a while and GM has a record of not letting emotion get in the way of actions that address poor numbers. On that basis it’s worthwhile looking at where Holden sits in the GM world.

Holden represents about one half of one per cent of GM’s overall volume and there are serious questions about the viability of that volume given market share, market relevance to GM (specifically that Australia is a RHD market), currency impact and administrative overheads.

It’s generally acknowledged that SUVs and commercials have better margins than passenger cars. But given that the best-selling Holden model is the Colorado, which came 15th in the 2019 sales race and that three of its direct competitors came first, second and fifth, it is fair to assume that Holden is very much the market taker rather than the market maker when it comes to pricing – and that margins are being impacted.

The repatriation back to the GM parent of whatever profit is being generated (if any) is also being impacted by the decline in the AUD to USD exchange rate over the last two years. The good old Aussie dollar doesn’t go as far it once did.

In recent years GM has been on an extended program of market relevance review, and the outcomes all point in one direction. The reality is that GM has moved from being a truly global company to a regional company, with specific focus on the Americas and Asia, specifically China.


The first impact of this strategy for Australia was hidden in the introduction of the new Opal-manufactured Commodore. At the same time that the new model was being touted to Australians as being somehow relevant due to the fact that the original Commodore came from Opel stock, the entire GM Europe operations (Opel and Vauxhall) were in the process of being sold to PSA (the parent company of the Citroen, Peugeot and DS brands).

The divestment of the European operations to PSA was part of an ongoing program that resulted in the withdrawal of all GM brands from the South African market (facilities sold to Isuzu) and culminated in the announcement this week of the sale of GM’s final production facility in India to Great Wall, allied with the withdrawal of the Chevrolet brand from India.

Incidentally, South Africa and India are both RHD markets, leaving Australia as a very small RHD island in a sea of GM LHD product development and manufacture – another factor that goes directly to the question of the relevance of the Australian market for GM.

Quite simply, participating in South African and Indian markets – that are a lot bigger and offer a lot more potential for growth than Australia – has been deemed to be an inappropriate investment of capital. Hard decisions have been taken.

It can’t be long before GM’s Australian operations have the corporate magnifying glass applied. In fact, the process is probably already underway, and it’s hard to see how the numbers can stack up in Holden’s favour in the long term. The inevitable might be delayed a few years beyond 2022.

But, it remains inevitable.

Craig Lowndes

Will we see Holden disappear from the track? (Photo by Robert Cianflone/Getty Images)

Where does that leave Supercars? The Supercars competition as we know it today commenced in 1993 with direct support from Holden and Ford as a promotional vehicle that reflected the Australian automotive market at the time. Holden and Ford dominated, large sedans and their wagon and ute derivatives dominated the market and the cars on the track had quite a bit of commonality with their road-going brethren.


That business model hasn’t changed a lot in the ensuing 27 years, but the automotive market and the demographics of the audience has changed – a lot. At best, vestiges of the rampant brand tribalism that dominated in the early ’90s remain. Neither of the models that underpinned the Supercars competition for the first 25 years remain in production. The market segment that those models represented has gone from dominating the marketplace to being a footnote.

It’s time for a new business model. One of Supercars’ misses in 2019 was the deadline for the publication of the new technical regulations (Gen3) defining the vehicles that are eligible for Supercars competition.

In retrospect that miss could well be a blessing in disguise as it allows some much-needed breathing space for the regulations to be framed in a way that reflects the likely future automotive market and motorsport landscape. It’s conceivable that the planned 2022 introduction could be extended out to 2023.

Another challenge being faced this year is the requirement to renew the media rights contract, which ends its six-year run in 2020. Any future multi-year contract will have to be flexible enough to deal with some potentially huge changes in the Supercars product.

There are many questions to be answered in developing a new Supercars business model.
• Do we seek to have official manufacturer (i.e. distributor) participation?
• Is manufacturer participation optional? Do we need it?
• At what level would a manufacturer participate, i.e. provide sponsorship dollars in return for branding? Provide direct material support (e.g. parts)? Provide direct engineering support (similar to Ford Performance’s involvement with the development of the Mustang)?
• Can we operate successfully without any official factory support?
• What automotive segment do we wish the models in our competition to represent? Where are we casting our net for competitors – and an audience?
• Are we primarily an entertainment platform (i.e. we just need to provide good racing) or are we an automotive marketing platform that needs to present in competition product that has direct relevance to the equivalent road-going version?
• Do we want a set of rules that are very specific to Supercars (the current model) or do we want a set of rules that have a wider appeal and relevance to competitors in other categories? Locally? Internationally?
• Do we combine our resources with other markets? Supercars ANZ? Supercars Australasia or Oceania?
• How, when and where do we compete? Do we collaborate with other branches of motorsport (e.g. Winfield Triple Challenge) or other sports to package our product?
• Other than the retro rounds, it all looks same-same, so do we mix it up with something like the NASCAR All-Star Race? How do we get the teams more involved?
• Are we prepared to sacrifice live audiences for TV audiences?
• How do we get greater cut-through with mainstream media?
• How do we leverage society’s obsession with the cult of celebrity?

So many questions, so many more to come.

Garry Jacobson’s RABBLEclub Racing Nissan Altima

Night races might help Supercars achieve more cut through. (Photo by Stephen Blackberry/Action Plus via Getty Images)

The bottom line is that the current business model is broken. The two models currently competing are a re-imaging of a popular but low-volume niche model coupe (Mustang) and a recently-discontinued hatchback from a manufacturer that no longer has a car (as opposed to an SUV or ute) of any sort in their range, has no plans for one and whose long-term viability is dubious at best. Those manufacturers that were convinced to come on board by the current set of regulations in the interim have since departed, with little indication that they lost any sleep over their decision.


There are numerous other options available to use as the basis for the development of a market-relevant set of technical regulations that can fit into a revised, market-relevant commercial model. The two most closely related to the existing Supercars regulations being NASCAR and BTCC. Notice I didn’t mention TCR… yet.

The NASCAR model takes the “we provide good racing and a branding platform for the manufacturers” approach. The cars are simple and robust, paying homage to the road-going model that they represent and with a lot of superfluous (and expensive) components removed (e.g. headlights, indicators, doors), making them easy to construct and repair, with a lot of common or spec components. The other common factor is the relatively limited number of models participating – at present only GM, Ford and Toyota are represented with Camaro, Mustang and Camry models powered by competition-specific V8s that are based on road-going engine designs of the past.

The BTCC model is not a million miles away from the Supercars model, run to the NGTC (TCN-1 in FIA-speak) regulations with many spec components and the option of an unbranded BTCC spec engine or the use of a manufacturer-based engine with strict controls. The relationship to the road-going equivalent is much closer than the Supercars model and the potential reach is much wider that NASCAR or Supercars, with models from 13 manufacturers eligible for competition.

And we haven’t mentioned TCR, which commenced in Australia in 2019. A platform not dissimilar to the BTCC NGTC regulations, with models from 14 manufacturers eligible for competition and a vast range of events being held across the world for cars conforming to the TCR rules.

What’s immediately apparent is that the BTCC NGTC and TCR rules have cast a much wider net to attract potential participants than the Supercars regs seem to have achieved – and casting a wider net has been a stated ambition of Supercars for a long time now.

It is hard not to come to the conclusion that Supercars are caught between a rock and a hard place.

The vast tribes of fiercely brand-loyal fans that were the raison d’etre for the creation of the category in the early ’90s have dissipated, seduced by the many other brands and vehicle types that are now available in the marketplace (along with the competitive motorsport categories that reflect them).

They have been distracted by the numerous other forms of entertainment (sporting or otherwise) that have achieved mainstream availability for participants and spectators alike.


They have been diluted by the change in demographics that have driven Australia’s population growth (the majority of whom have come from nations that don’t have a strong motor sporting heritage, if they have one at all) and all while still having only 24 hours in their day to cram all these options into.

A raucous exhaust note will always be an entertaining proposition and good close racing will always attract, but for Supercars, having experienced the arrival and departure of three brands and faced with the departure of one of the original two pillars, the question has to be asked: is that enough?

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Many potential options are embedded in those business model questions listed above.

Whatever the future looks like, it’s clear that we need to see a set of technical regulations that make it easier for new players to enter, and that probably means less bespoke, less prescriptive, more generic.

As for the entertainment piece that engages and interests audiences beyond the racing, it would seem that there is a lot of opportunity that isn’t being taken.

The rise of the sports star as celebrity in mainstream media seems to have occurred without the participation of the leading lights of Australian motorsport. Yes, there are well-known players within the sport, and some of them have a profile outside the motorsports arena, but surely more can be done in this area?

There are some great characters in the sport (and not just the drivers), some great stories to be told and some great controversies to be aired. It all adds to the show, and we have all heard of a saying attributed to one of the greatest showmen that has ever lived Phineas T Barnum: there’s no such thing as bad publicity.

The trend to shorter, bite-sized chunks of entertainment is all around – the rise of Twenty20 cricket and the talk of Test matches being played over four days, the increase in the number of nine-hole rounds in recreational golf – and it’s easy to see why. The choices we have available have grown exponentially, just as our attention spans have got shorter and distraction factors have increased, and many sports have evolved to reflect this.

For Supercars this presents some opportunity. How about some short, sharp, night races? During the week? How about incorporating a rapid-fire drag-racing challenge as a part of an event? Or a stand-alone event? A drift challenge? A motorkhana event? Involve some celebrities driving with the normal driver navigating? A tarmac rally stage? A Summernats-style driving challenge like spear a spud?

Perhaps look at the opportunity of co-branding teams or the sport as a whole? The AFL/SSN alliance between the Magpies, Swans and Giants in AFL and the Magpies, Swifts and Giants in netball is the start of what could be a good model.

Whatever the answer is, it isn’t the status quo.

As a Supercars fan I hope that they approach the inevitable, eventual departure of Holden with a positive attitude and use it as a catalyst to build a new business and sporting model that takes them forward for the next 30 years.