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Holden remains adamant that manufacturing cars in Australia is economically unsustainable, six months before it closes local assembly plants for good. But the brand says there is "no sugar coating" significant challenges on the road ahead.
The manufacturer released its 2016 financial data on Thursday, recording an after-tax profit of $27.3 million for its national sales company operations, the division's second consecutive year in the black. Combined with its manufacturing results, the brand recorded a $125.5m profit.
But that doesn't tell the whole story.
Holden's General Motors parent company chipped in $128.1m to help the brand wind down its manufacturing operations, a cause helped by a further $51.4m from the Federal Government's automotive transformation scheme.
A statement released by the company says Holden's car-making arm "continued to operate at a significant loss" - had the company kept building cars throughout 2017 and into 2018, it would have been $180m in the red.
Australian Holden employees built 38,677 vehicles in 2016, exporting 4191 to New Zealand, the Middle East and North America.
The company sold a total of 94,308 cars in Australia in 2016, a difficult year that saw the brand sell fewer cars than 2015 despite record overall new car sales. Hyundai also leapfrogged Holden to become the third-largest vehicle brand in Australia.
Holden's story has not improved dramatically in 2017, as it continues to lose market share following an 11.3 per cent reduction in sales.
Next year could be even worse, as Holden is still bolstered by reasonably strong Commodore demand - without it, the lion would drop from fourth to ninth on the sales charts, just ahead of Kia.
Then again, Holden showrooms will soon be bolstered by new Acadia and Equinox SUVs as well as a European-built Commodore replacement and expansions to the Astra range.
Holden managing director Mark Bernhard says 2016 results reinforce the brand's decision to stop building cars in Australia and become a leaner, more prosperous organisation.
"This result highlights the strong profitability of our long-term business plans," he says.
"We're facing challenges as a business and undergoing fundamental changes, there is no sugar coating that.
"But our consistent financial results highlight the underlying health of the business."
7 Comments
I can't see how they will do anything but continue to lose market share with the woeful offerings they will have after the Commodore is gone. The brand means nothing, they are just a GM importer now. The Holden badge is irrelevant. At least Fords are still Fords, and Ford Australia was smart enough to start adopting the global look whilst they were still manufacturing Falcons and Territorys, so the vehicles they import still carry the same aesthetic. I can't even pick a Holden on the road these days, they have no identifiable brand features.
Holden, brand name for GM Products only. When Renault start changing Opals to their own cars, can't see GM importing another car makers cars as their own.
It is difficult to imagine the 2018 Commodore selling any more than the recent Insignia and Malibu. They will be a small time player with a small dealer network and little brand value. The models and their respective source will chop and change over the years for example the take over of Opel where the 2018 Commodore comes from.
GM is finished with Australia, they may try and import some of their US rubbish into Australia, but they will fail miserably unless it's the Camaro, Corvette or Cadillac and they aren't coming down under anytime soon if ever. They will just retreat behind fortress America building.
The Commodore was the medium sized replacement for the Kingswood (fuel considerations). It ended as a Statesman class vehicle. Instead of building the VE they should have build a Torana size vehicle with V8, V6 and 4 cylinder options (not Starfire). Late adoption of six speed autos did nothing for their cause. Ultimately this may not have stopped the rot as the Australian arm was not given free rein to export. As a Holden family I mourn the loss of local manaufacturing but the economics were plain.
Mr Majestyk, Corvette is out of production in the US.
.. a very misleading headline NOT ONE car manufacturer anywhere in the world actually makes money manufacturing cars. China Japan Thailand UK Germany Sweden France others... even the Yanks, their auto industries get subsidies, tax breaks, tariff protection and import duties put in place by the governments to allow/support car manufacturing. Here..??? all due to the economic zealots in Treasury and political neanderthals in politics in Canberra (Kim Carr excepted) + low or no import duties and tariffs, the small subsidies (less than $200 million) have stopped... and so has auto manufacturing in this country. Impact? a reduction in direct GDP of about $8 BILLION with a multipler effect of a reduction up to $20 BILLION. All coz Abbott and Hockey thought car manufacturing was not worth $200 million (and that when the miners, banks and agriculture get handouts in the billions) Just hope like hell the Pacific Peso (aka AUD) does not go down to USD 50c .... new car prices will (have to) go up by 50% . Holden will disappear...