Holden is urgently airfreighting wheels from the US to Australia to meet a spike in demand for the new Commodore — even though there is a former wheel supplier just 25km from its factory gate.
About 12,000 wheels are being flown 13,000km across the Pacific at an estimated cost of $2.5 million, based on quotes from the airfreight industry, because demand for the most expensive version of the new Commodore is better than expected.
It is a temporary measure to try to shorten the three-month waiting list for Holden’s flagship sedan, the $50,000 V8-powered SS-V Redline. The airfreight charges equate to about $833 per car but there will be no extra cost to buyers because Holden will absorb the fee in the selling price.
Holden’s factory in the Adelaide suburb of Elizabeth stopped sourcing wheels from ROH in the nearby suburb of Woodville North in 2005, after General Motors switched to global suppliers in China and Taiwan.
Ford has been importing wheels from China, Taiwan and India since 2004.
Only Toyota’s factory in the Melbourne suburb of Altona, which makes the Camry and Aurion sedans, continues to source all its wheels from Australia’s ROH.
“Surely Australian taxpayers’ money should be spent in Australia,” said ROH general manager Bill Davidson.
When asked if there should be a minimum local content requirement for Australian-made cars, Mr Davidson said: “It would help the economy if there were more local content in Australian-made cars. Toyota should be applauded for standing by its Australian suppliers and working with them to remain sustainable.”
Holden is about to start negotiating with the new Federal Government about further funding to secure future models.
The Holden Commodore and Cruze have the least local content among the three Australian car makers. Holden had received a pledge for $275 million from State and Federal Governments in March 2012 but says market conditions have “changed significantly since then”.
The first new Commodore in seven years has had a 15 per cent boost in sales in its first two months. It’s a far cry from Holden’s halcyon days in the late 1990s when the market was less competitive and it sold three times as many Commodores.
But the former favourite is now well inside the top five sellers list having struggled to stay inside the top 10 earlier this year. “We’re happy with demand for the new Commodore; sales are strong and in line with our internal targets,” said Holden’s executive director of sales and marketing, Philip Brook.
“Particularly pleasing is the demand for our high-end models (which) currently account for around 42 per cent of our dealer order bank and we’ve had to airfreight parts in to try and keep up with demand.”
At its peak in the late 1990s and early 2000s when ROH supplied Holden, Ford, Toyota and Mitsubishi car factories, the wheel maker employed 470 workers.
Today ROH employs 154 workers at its Woodville North facility.
This reporter is on Twitter: @JoshuaDowling