By Mike Cherney

SYDNEY--A majority of Holden dealers in Australia accepted a compensation offer from General Motors Co. tied to the Detroit auto maker's decision to retire the iconic brand, groups representing the dealers said Wednesday.

GM's decision to close the brand, announced in February, came as a surprise to many dealers and faced resistance from politicians and regulators. Lawmakers in Australia's parliament are pressing ahead with an inquiry into the matter and industry groups are calling for stronger franchising regulations to better protect dealers in the future.

The Australian Holden Dealer Council, which represents roughly 180 dealers, said more than 120 accepted GM's offer. The Australian Automotive Dealer Association, a broader industry group, said dealers didn't have the resources to fight GM in court.

In general, dealers had until June 30 to accept the offer, which included compensation of 1,500 Australian dollars (US$1,035) per new car sold over a set period to cover lost profits. GM said its offer was fair, noting it was based on 2019 sales and wasn't adjusted for a recent downturn in vehicle sales due to the coronavirus pandemic.

The dealers wanted more, at one point asking for A$6,110 a car, with part of the dispute stemming from how to account for aftermarket sales such as service and repairs. GM's offer included allowing dealers to continue to serve as authorized repair shops until 2025, but dealers were concerned customers will be more likely to have their cars serviced at independent repair shops if the brand doesn't exist.

GM's dealer agreement was supposed to run through 2022.

GM has exited other foreign markets, including India and Europe, in part to free up capital for bets on electric and autonomous vehicles. Holden's market share in Australia had declined in recent years.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

July 01, 2020 00:51 ET (04:51 GMT)

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