GM has announced on Monday the iconic Australian brand would be axed by next year in both Australia and New Zealand, to the industry's shock.

The company said it would spell out the transition plan to dealerships over coming days, including what kind of support and compensation would be available.

Australian Automotive Dealer Association chief operating officer Brian Savage says the end of term arrangements must include expenses such as parts, inventory, vehicle stock and appropriate notice periods so employees can find new work.

With the company's history dating back 160 years, Mr Savage said Holden dealerships played a central role to the economy of regional towns.

"The ball's really in Holden's court as to how they're going to consider the goodwill that's been established by those long-standing dealerships," Mr Savage told AAP.

"With profitability what it is at the moment, no dealer can afford to have the brand pulled from them without some form of compensation. There's just nothing in it at the moment.

"There needs to be a plan and that should be a requirement. It shouldn't be left to the will of the manufacturer to do the right thing, and hopefully Holden will."

Mr Savage said vehicle sales have been declining for the past 22 months in Australia.

"They knew they were doing it tough but their understanding was, from the interim (Holden) CEO, that they would be working towards a bigger plan in the hope of turning it around.

"But obviously that is not to be. It's come as a huge blow to our dealers."

Mr Savage said fewer dealers now sell just one brand in a bid to become more sustainable.

The federal government says it's "very disappointed" in Holden's decision given the billions of dollars the company has received in subsidies over the years.

About 600 workers are expected to lose their jobs.

Australian Associated Press