Holden is still adamant manufacturing its cars in Australia is economically unsustainable.
That’s six months before it closes assembly plants there for good. But the brand says there is “no sugar coating” significant challenges ahead, drive.com.au reports.
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.
The company says Holden’s car-making arm “continued to operate at a significant loss”. And had it 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 this year, as it continues to lose market share following an 11.3% reduction in sales.
Next year could be even worse, as Holden is still bolstered by reasonably strong Commodore demand. Without it, Holden would drop from fourth to ninth on the sales charts, just ahead of Kia.
Then again, Holden showrooms will soon get new Acadia and Equinox sport utility vehicles (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.”
