Guido Dumarey's bid to acquire Holden's car assembly plant in Adelaide has collapsed. General Motors Company (NYSE:GM) and Punch international (Iep Invest, NV (ENXTBR:IEP)) have announced that a detailed analysis of the business model has determined it is not viable. The companies stated: “Both parties concluded that a viable business model was not possible.

Therefore the proposal will not be taken forward. General Motors and Punch Corporation have undertaken and completed a detailed global evaluation of a proposal from Punch Corporation to continue manufacturing vehicles at Holden's Elizabeth plant in South Australia. The challenges to domestic automotive manufacturing in Australia -- lack of scale, high production costs, supply base contraction and increasing market fragmentation -- persist and cannot be overcome for this business case.

In particular, the wind down of the supply base following the manufacturing exit of the three existing car makers, and the critical production mass they represent, is insurmountable.” General Motors said there would be no further discussion over the failed deal because the terms have been governed by a non-disclosure agreement.