By Julian Bajkowski

Government fleet buyers across Australia in all sectors will be forced to reassess their procurement plans after iconic carmaker General Motors Holden confirmed that it will cease local production in 2017, leaving Toyota as the last onshore manufacturer.

The confirmation has big implications for the federal fleet sector as well as Victorian and South Australian government fleets which have been used to prop-up local industry and jobs through a range of preferential buying arrangements.

A statement from Holden said that “as a result of the company’s actions, approximately 2,900 positions will be impacted over the next four years”.

“This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden’s Victorian workforce.”

The car maker’s decision to stop building cars in Australia has major commercial implications for rival Toyota which is now highly likely to reassess the future its own local manufacturing.

The most probable consequence for government fleet buyers is that there will now be substantial competitive repositioning among vehicle manufacturers as a result of the so-called ‘patriotic’ requirement option falling away and enabling foreign brands to bid for previously unavailable public sector business.

The federal government’s car fleets are one of the largest potential sales channels given that at 30th June 2013, passenger vehicles made in Australia acquired by the federal government stood at 4517, or 64.11 per cent.

In the year from June 2012 to June 2013, the number of Australian made cars delivered to the federal government was 880, or 86.27 per cent.

Overall state government figures for purchases of locally made cars are understood to be substantially lower, however key public safety agencies including police have continued to be strong buyers of domestically manufactured six and eight cylinder cars.

The planned cessation of Australian manufacturing by Holden follows a week of unprecedented political pressure from the Abbott government that culminated in a terse letter from Acting Prime Minister Warren Truss demanding that the company spell out its future intentions.

In the lead-up to the election, the Coalition remained conspicuously uncommitted to continuing to provide substantial subsidies to overseas-owned car companies as an incentive to keep their factories in Australia, a position the Labor took issue with on the basis of the need to protect local jobs and domestic manufacturing capability.