GM Holden is back in the black, with a $112 million profit in 2010 breaking a five-year run of losses for the local manufacturer.
Holden chief financial officer, Mark Bernhard, announced the positive economic result today after filing the company’s official statements with the Australian Securities and Investments Commission.
The result marks a $323 million turnaround from 2009, when GM Holden suffered a $211 million loss.
Between 2005 and 2009, GM Holden lost a total of $579 million. Before today’s announcement for the 2010 calendar year, Holden’s last full-year profit came in 2004.
Mr Bernhard said the losses over the past few years forced the company to become a more efficient operation.
“The economic climate experienced during 2008 and 2009 required us to improve our structural cost base and business model to ensure the long-term profitability of our domestic business,” Mr Bernhard said.
“The measures we took to re-structure our organisation and reduce costs during this period saw us emerge as a leaner, more flexible automotive manufacturer.”
GM Holden’s revenue increased from $3.8 billion to $4.4 billion last year. During that time it invested heavily to prepare for production of the Cruze small car alongside the Commodore at Holden’s Vehicle Operations plant in South Australia, and also increased its research and development spending from $146 million to $179 million.
Compared with 2009, domestic sales of Holden vehicles were up 11 percent in 2010. Vehicle exports rose 13 percent, while engine exports were up a considerable 25 percent.
In total, 59,362 locally manufactured Holden vehicles were sold in Australia in 2010, up from 58,535 in 2009. In Holden’s last year of profitability, 2004, more than 110,000 locally manufactured Holdens were sold in Australia.
Sales of the Commodore increased 3.5 percent in 2010 to slightly fewer than 46,000 units. The Commodore-based Holden Utility lost 5.8 percent (around 700 units), while the Statesman/Caprice luxury pair was largely on par with the previous year.
Looking ahead to 2011, the Commodore has lost ground in terms of sales (down 6.3 percent in Q1), but it will be the Cruze that makes the biggest difference to the company’s bottom line this year from a sales point of view.
Holden is on track to sell 30,000 Cruzes this year, with production of the sedan commencing late last month and the all-new hatch to roll off the line at Elizabeth later this year.
Mr Bernhard said the Cruze had an important role to play moving forward, and admitted the most important factor for Holden in the long-term was to remain relevant to Australian consumers.
“We are pleased to announce a return to profitability, and to achieve our goal of putting Holden ‘back in the black’ in 2010, but sustained business performance, and our ability to meet the needs of the Australian market, is critical for Holden’s long-term viability.”