The American car maker reportedly gave the Australian Government 15 minutes' notice before making the announcement on Monday.

It came over six years after Holden announced it would cease production in Australia in 2017. The brand continued, but will now be retired from engineering, design and sales by 2021.

Senator Abetz said GM was responsible for "allowing this great product to atrophy within the Australian marketplace".

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"I think General Motors could have done a lot more to keep the Holden brand going. Regrettably, they didn't and we now live with the consequences of that," he said.

"General Motors has not covered themselves in glory in relation to the way they've handled it and how they've allowed the market to atrophy."

Senator Abetz said the way in which the announcement was made was "clearly disrespectful to the Australian people".

In December 2013, former treasurer Joe Hockey dared GM to leave Australia, prompting an angry response from GM management. The company announced it would cease Australian production shortly after.

Senator Abetz said the Australian Government had subsidised GM to the tune of $2.2 billion and this was an unsustainable model.

"It's not the government when we talk about these things, it's the Australian taxpayer and after $2.2 billion - if I recall correctly - having been putting into the manufacturing side and still not being able to make a go of it, there had to come a time when other manufacturers as well withdrew from Australia," he said.

"The disappointing thing is that the brand of Holden, which could have been maintained within Australia, has not been maintained as General Motors took their eye off the ball, off the market, and as a result their market has atrophied and is no longer viable for them."

He said Australia was at a competitive disadvantage to other car making economies - such as Japan and Germany - due to the country's small population and large geographic size.

Labor has painted the demise of GM and Holden in Australia as a legacy of the Abbott-Hockey government.

Tasmanian Labor senator Helen Polley said Australians had fond memories of Holden and it was a disappointing announcement.

"There are going to be job losses and this announcement will hurt regional communities like ours," she said.

"Successive Liberal governments and the Morrison Government didn't do enough to incentivise Holden to remain competitive in Australia. I hope this government will ensure workers are skilled up for future job opportunities not just in the automotive industry."