Holden Posts $146 Million Loss
June 18, 2007 by Alborz Fallah
GM Holden announced its financial results late Friday afternoon, in a bid to possibly curb any bad media coverage, and it worked, most of the press (including CarAdvice) missed it for the weekend. Nonetheless, nothing like Monday morning financial news.
Holden might be behind Australia’s current number one selling car, the Holden VE Commodore, however in 2006, GM Holden went $146.56 million in the red. This continued from 2005 when Holden lost $144.6 million.
Much like Ford which lost $40.3 million dollars last year due to the development cost of the new Falcon (which CarAdvice continues to spy on), Holden said the 2006 and 2005 financial results were mainly due to the developement of the VE Commodore and the WM Statesman and Caprice.
There are other factors as well, Holden blames the strong Australia dollar which has crippled its exports and given importers the upper hand, as well as the massive discounts offered on the outgoing model range. Then there was the $20 million Holden spent firing workers at its Elizabeth plant, and the $307 million which was invested in Research & Development.
All is not bad however, the profit/loss life cycle is a common occurrence when a new Falcon or Commodore is introduced.
- 2006 – $146 million loss
- 2005 – $144 million loss
- 2004 – $300.8 million profit
- 2003 – $285.6 million profit
- 2002 – 256.5 million profit
2007 will undoubtedly be a better year for Holden as the company enjoys the benefits of the VE Commodore and the WM Statesman and Caprice.
Source: GoAuto
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but VE was supposed to save them???
as much as i despise commodores, i hope holden can get their figures back up. would be awful to see any loss of jobs!
It will save them
the VE’s profits are not counted in this as the car came out sort of.. mid last year..
Its stated in the article… and is common sense… like any investment it involves intial outlays (ie development etc costs) before you get a return. Their profits will come as the trends from previous models show.
As Aldorz said as well… the VE has only had a negative effect on their financial statements without having the ability yet to have a positive one. What would be a better indicator of how they are going is what they budgeted for against whats actually happened. You will never get your hands on that, but at this stage it would be the only way to tell how they are truly fairing until the VE’s sales start to have an impact.
I would love to see some figures on the Korean range from Holden.
It would be great to know if the Korean range is more profitable for Holden than its Australian operation!
Lol I think it would be…. no Research and development costs for Holden which is the biggest killer usually, relatively cheap to make and they sell them at prity standard prices, no major discounts over the competition
“would be awful to see any loss of jobs!”
Yes it would, but unfortunately I believe there will be more job loses.
Holden have overcooked the VE. Its selling at least 30% less than in the 2002-03 period. The market hasn’t bounced back quite as expected. So unless their Korean cars are being sold at massive margins. I’ll be tipping more trouble in the future.
Here’s an idea Holden! Give me 150 million of the Australian currency unit and don’t do business in 2008! Whoar!