The company, which recently announced it was withdrawing the Chevrolet from Western Europe so it could concentrate on the more established Vauxhall and Opel brands, is to close its factory in Elizabeth, South Australia and downsize its engineering departments based in Victoria, said to affect a combined 2,900 staff.

Domestic brand Holden, which has been a GM subsidiary since 1931, will continue to operate a national sales company for imported re-badged vehicles as well as operating a national parts distribution centre and global design studio. The existing dealer network will continue to sell and service Holden vehicles, and warranty and spare parts availability will be unchanged.

GM Holden chairman and managing director, Mike Devereux, said :“This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia. We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people.

General Motors is the second American manufacturer this year to announce it will cease its factories in Australia. In May, Ford also announced it was to close its facility in Geelong, Victoria, after 88 years.

GM Chairman and CEO Dan Akerson commented: ‘The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.’