It's official: Holden will no longer be manufacturing its own cars. GM announced late last night that Holden would discontinue vehicle and engine manufacturing, as well as reduce its engineering operations by 2017.

Holden will now transition from a full-fledged automaker to a national sales company, similar to how Vauxhall functions in the United Kingdom. GM will continue to sell Holden-badged versions of GM products, like the Holden Cruze, or Holden Volt. Australian-developed models like the Holden Caprice, Holden Commodore, and Holden Ute, though, will be no more.

The decision to close Holden was based on economics, says GM chief Dan Akerson, who will step down in January, "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.”

According to GM, making things in Australia is 65 percent more expensive than compared to just a decade ago -- since 2001, the Australian dollar has risen from $0.50 to as high as $1.10 U.S. dollars. As of this morning, the Australian dollar is equal to about $0.91 USD.

Though it's closing its Australian production facilities, GM says it'll still maintain a major presence in the market. Aside from the Holden sales company, GM will continue to maintain its parts distribution center, and global design studio. Holden's 2900 manufacturing positions will be affected by the closure.

GM is the latest automaker to end Australian production -- Ford announced it will end Australian production in 2016. Toyota remains the last automaker producing vehicles in Australia. Mitsubishi was the first to pull out, exiting in 2008.

It's too early to tell what this means for the Holden-sourced Chevrolet Caprice and Chevrolet SS in the U.S., but we doubt GM will give up the police market, and it isn't inconceivable for the SS to move to another rear-drive platform. According to Chevy, production of both the SS and Caprice will continue as planned in Australia. GM will likely announce their fate at a (much) later date.

Source: GM