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.