Holden Profit

[bobthebilda]

Interesting story on Holdens profit

http://m.smh.com.au/drive/motor-news...507-1y89d.html

[Brazen]

Finally some decent news for the industry. $90 million profit is good, also good to see the profit driven by the locally made Cruze.


http://www.caradvice.com.au/171624/h...rofit-in-2011/

By Tim Beissmann | May 07th, 2012 Print page 1

GM Holden recorded a net profit of $89.7 million in 2011, representing the Australian car maker’s second consecutive positive financial result in a difficult manufacturing market.

The profit was achieved despite a slight decrease in consolidated revenue – down from $4.4 billion in 2010 to $4.3 billion – and an increase in research and development spending – up from $179 million to $231 million.

Holden chief financial officer George Kapitelli said the brand’s positive financial result in 2011 was driven by the success of the locally made Holden Cruze small car and the company’s revised cost structure.

“After the financial crisis we reshaped our business to improve structural cost, reduce our reliance on exports and bring the Cruze into local production so we could continue to make cars in Australia,” Kapitelli said.

“Now around 60 per cent of our Australian sales are Australian-made cars, this is a great result.”



He said Holden was running its business responsibly and sustainably with a long-term view.

“We’re making a strategic contribution to Australia, we’re committed to advanced manufacturing in this country and we’re committed to creating new opportunities for suppliers.”

The announcement comes six weeks after Holden confirmed a $275 million co-investment deal with the federal and state governments that will see it continue to develop and manufacture vehicles in Australia for the next 10 years. General Motors will commit around $1 billion to the program, helping Holden produce two new vehicles on global platforms at its Elizabeth assembly plant in South Australia from the second half of this decade.

Last year’s positive financial result takes GM Holden’s cumulative profit since 2010 to $201.7 million – a stark contrast to the previous five years, in which its losses totalled $579 million.



Vehicle production at Elizabeth increased 36.8 per cent last year, up from 66,061 in 2010 to 90,424. Exports increased more than 50 per cent to 12,068 as Holden delivered cars to North America, New Zealand, Brazil, South Africa and the Middle East.

Engine production at its Port Melbourne plant increased 2.9 per cent, up from 98,146 to 101,019, and exports to China, Germany, Thailand and South Korea increased 14 per cent to 57,792 units.

The increased vehicle production in 2011 was not enough to prevent Holden cutting around 140 casual and fixed-term contract employees from Elizabeth in February 2012, however. Holden blamed the decision to axe the workers on the “tough economic conditions” and the company’s pursuit of sustainable growth and continued domestic profitability.

Holden’s Australian sales fell 5.1 per cent last year, approximately double the decline of the Australian market as a whole.

Of the brand’s 11 models, the Barina Spark, Caprice, Captiva 5 and the Cruze were the only ones to achieve sales growth over 2010, while the Barina, Captiva 7, Commodore and Commodore-based Ute all slid backwards.

After the first four months of this year, Holden is a further 5.4 per cent off 2011’s sales pace, with 36,534 vehicles sold across the country. Last month it was outsold by Mazda for the first time in the brand’s history, crawling to 7589 sales versus the Japanese importer’s 7681-vehicle result.

[Polyal]

Certainly hard to bag out anything with a local keeping their head above water.

[HUNTER8]

Love the headline though on the SMH link.
'Taxpayers fund Holden Profit".

[jpd80]

Firstly, well done Holden in tough and changing times, it's great to see two profitable years back to back
and I hope that Ford can also squeak by with either a small profit or loss, that would be a good result for them..


Regarding Ford and Holden profits or losses:
What we all must understand is that regardless of the profit attained, Holden still had revenue of $4.3 Billion,
which means every internal division, service supplier, debt provider, government taxes and employee were all paid.

Any one critical of Holden or Ford making small profits or small losses in comparison to the revenue is living in denial
of those two companies, impressive array of accountants who are able to legally shift money around at will.....

The real value of Holden and Ford Australia is what they provide to their respective Asia/Pacific/Africa busines units
in terms of sourcing vehicles and parts through internal supplier networks, a lot of money goes off shore and into those
business unit coffers, legally and without a skeric of tax added....

[poppa smurf]

good on them.....hopefully the "Holden/Ford" rivalry in australia will continue for a very long time!

[HUNTER8]

Just in case .......
Wasn't actually knocking Holden just the article heading. Puts a very negative spin on it straight away.

[Dr Smith]

Wonder if this good result kills any speculation of US-bound exports as it seems that while the $Aust dollar is high when Holden exports stopped their bottom line improved.

[trippytaka]

Hahaha! I saw that today. Amazing how it's exactly the figure of the gov injection.

[svo supporter]

Originally Posted by Dr Smith

Wonder if this good result kills any speculation of US-bound exports as it seems that while the $Aust dollar is high when Holden exports stopped their bottom line improved.

Not sure about US exports, but something was mentioned on S.A radio, exports are what helped the bottom line

[jpd80]

Originally Posted by svo supporter

Not sure about US exports, but something was mentioned on S.A radio, exports are what helped the bottom line

That could be exports within the Asia pacific region as well as the last few Commodores to the Middle East

[svo supporter]

Originally Posted by jpd80

That could be exports within the Asia pacific region as well as the last few Commodores to the Middle East

Good possibility. It's great that the high Aussie dollar hasn't hurt GM as much as predicted with exports.

[StrikeTwiceXR6]

Originally Posted by HUNTER8

Just in case .......
Wasn't actually knocking Holden just the article heading. Puts a very negative spin on it straight away.

Originally Posted by HUNTER8

Love the headline though on the SMH link.
'Taxpayers fund Holden Profit".

It's true though isn't it

[jpd80]

Originally Posted by svo supporter

Good possibility. It's great that the high Aussie dollar hasn't hurt GM as much as predicted with exports.

Unfortunately in November, Holden announced no more Commodores to Middle East
but Caprice continues there at about 200/mth or around 2400 a year..

I bet GMNA will be putting new Impala into middle East instead of Commodore (Lumina)

[HUNTER8]

Originally Posted by StrikeTwiceXR6

It's true though isn't it

Holden's Chief Financial Officer says it's just coincedence that the last 2 years profit figure was the almost exactly the same amount as the government grants.
I believe him.....don't you??

[StrikeTwiceXR6]

Originally Posted by HUNTER8

Holden's Chief Financial Officer says it's just coincedence that the last 2 years profit figure was the almost exactly the same amount as the government grants.
I believe him.....don't you??

My response on first hearing this was:
and my response five minutes after hearing this still is:

[graham7773]

So how much tax did GMH pay on their $4.3 billion revenue? Just quietly, how do some of the richest people in this country pay around 5% tax while workers pay around 30% or more? Even pensioners who have paid tax all their working life are still paying tax (GST) and excise on anything they buy.
???????????????????

[HUNTER8]

Originally Posted by graham7773

So how much tax did GMH pay on their $4.3 billion revenue? Just quietly, how do some of the richest people in this country pay around 5% tax while workers pay around 30% or more? Even pensioners who have paid tax all their working life are still paying tax (GST) and excise on anything they buy.
???????????????????

Business only pays tax on profit not turnover.

[BLUEYBA]

you know what amazes me is that Holden boast about how many Commodores/Cruzes they sell yet they only make a small profit. they obviously aren't making alot of money on each car.

[csv8]

THE small car from the Holden stable has kept the carmaker in the black, as support for the Commodore slid in 2011.

Strong sales of the new compact Cruze helped offset the downturn in demand for the Commodore and led to a modest profit of $89.7 million for GM Holden, down from $112 million a year earlier which followed six years of losses.

The bottom line almost exactly matches the cash from Canberra that came to Holden under the Automotive Transformation Scheme to put the Cruze into production in Adelaide.

Holden will invest the profit in ongoing spending for research and development work and capital projects, including the updated VF Commodore, scheduled for 2013.

In line with post GFC policy, it will not return a dividend to GM in Detroit.

The profit is well down from earlier results for Holden - which was highly profitable through the 1990s - but still enough to maintain its local operation. "The plan is to totally re-invest that profit. We're confident that's enough to be sustainable going forward," Holden's chief financial officer George Kapitelli said yesterday.




"Local production is viable and sustainable with two car lines. We need this investment to level the playing field with our global competitors."

The details of Holden's performance are a sharp contrast with overall production of both cars and V6 engines rising but overall revenue falling slightly - primarily because of an 11.6 per cent drop in Commodore sales that has accelerated to a 22.8 per cent fall through the first four months of this year.

Mr Kapitelli credited restructuring and leaning of the whole company for the 2011 result, as well as the impact of the Cruze.

The Cruze contribution allowed Holden to build 90,424 cars last year, an increase of 36.8 per cent, and it also lifted V6 engine production by 2.9 per cent to 101,019.

It also increased its vehicle exports by 54.2 per cent, thanks to shipments of 12,068 cars to the Middle East, New Zealand, North America, Brazil and South Africa.

Print

[bobthebilda]

Originally Posted by BLUEYBA

you know what amazes me is that Holden boast about how many Commodores/Cruzes they sell yet they only make a small profit. they obviously aren't making alot of money on each car.

They are making 90 million on approx 125,000 sales, which comes to about $720 a car. But then again, Holden do say in one breath that the cruze is making them money, and that import only brands have better pricing abilities than they do. So I suspect that the picture looks alot worse for the money making abilities of the cruze and commodore. One would suspect that imports are better options for them than local made, so lets assume the 47,000 non local cars they sold last year made $1500 profit each car for them, that would make $70 million. Then lets allocate $100 for each engine, that would be $10 million, and the most profitable section for all manufacturers (spare parts), we could add another $30 to 40 million. Its all guess work, but theres no reason that cruze and commodore production could still be losing Holden over $100 million a year (without the government handouts). And lets no forget that it was Deveraux who said that Holden is not viable unless they are making 105,000 cars a year (only made 90,000 last year). Holdens stories change with the winds, but one thing is for sure, oddly taxpayers would think it better to give money to a business that is making money, than one that is continually losing money.

[TMC]

In the long term impressive sales without profit is pointless in any business.

[svo supporter]

A small profit is better than a small loss, regardless of the business.

So it's a step in the right direction.

[jpd80]

Originally Posted by graham7773

So how much tax did GMH pay on their $4.3 billion revenue?

They only pay federal tax on the profit, $89 million... not sure about state and local government taxes and levees.

I wouldn't be surprised if tax credits on previous losses are offset against a few years of profits..

[prydey]

is it just me or do many members on this forum absorb every bit of dribble that comes from GM as though its is 100% fact.

ford and toyota both say that it isn't viable to build small cars here and yet holden is crediting the cruze for their profits. they can't all be telling the truth and i know which one has a poor track record regarding honesty.

[jpd80]

Originally Posted by prydey

is it just me or do many members on this forum absorb every bit of dribble that comes from GM as though its is 100% fact.

ford and toyota both say that it isn't viable to build small cars here and yet holden is crediting the cruze for their profits. they can't all be telling the truth and i know which one has a poor track record regarding honesty.

Before Alan Mulally came to Ford, building Focus in the USA was a loss maker,
it was his insistance on Ford's managers to find a way to make it happen that changed
the scales and metrics of the car, assuming that nothing has changed is extremely dangerous.

[prydey]

Originally Posted by jpd80

Before Alan Mulally came to Ford, building Focus in the USA was a loss maker,
it was his insistance on Ford's managers to find a way to make it happen that changed
the scales and metrics of the car, assuming that nothing has changed is extremely dangerous.

i respect your views on things and agree, but i find this statement slightly hypocritical in light of many comments recently made in various vfacts threads. apparently building falcons and territories in low volumes is sinking the ship but building smaller cars here (with probably less profit) is not?

surely the same mentality can be applied to local production? ie don't assume things remain the same re costs.

[burnz]

Originally Posted by prydey

is it just me or do many members on this forum absorb every bit of dribble that comes from GM as though its is 100% fact.

ford and toyota both say that it isn't viable to build small cars here and yet holden is crediting the cruze for their profits. they can't all be telling the truth and i know which one has a poor track record regarding honesty.

what small car does ford make in australia?

and yet toyota continue to make camry!
maybe they should reskin it and call it corolla.

[prydey]

camry isn't a small car. its also a global car. economies of scale.

[burnz]

Originally Posted by prydey

camry isn't a small car. its also a global car. economies of scale.

ford went of the sales of mondeo, not enough for a case for making local...
holden did the same with cruze, and the sales justified it.

local economies of scale.