Holden announces second-biggest loss in history

Holden has announced a net loss of $152.8 million for the 2012/2013 financial year – the second largest in its history – a result it blames predominantly on reduced demand for its Australian-made vehicles.
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The local manufacturer confirmed its consolidated revenue fell from $4.3 billion in 2011 to $4.0 billion last year, reflecting lower sales of the South Australian-assembled Commodore and Cruze models, and compounded by supply limitations of the Colorado ute.

The result represents an approximate quarter of a billion dollar turnaround from the previous year when Holden announced an $89.7 million profit – one that raised eyebrows for aligning identically with the government’s investment in the company in that fiscal year.

The $152.8 million loss is the second-worst financial result in Holden’s history, eclipsed only by the company’s 2009 result, which saw it plunge $211 million into the red.


Holden chief financial officer George Kapitelli said the 2012 numbers were a reflection of the challenging and competitive car market in Australia spurred on by unprecedented price competition and discounting from rivals.

“Australia is one of the most open and trade-exposed automotive markets anywhere in the world with more than 180 passenger cars to choose from,” Kapitelli said.

“With the Australian dollar at levels not seen since the early 1980s, this puts particular pressure on our Australian manufacturing operations.

“While we benefit from the strength of the currency with our imported models, we are the most trade-exposed of the local manufacturers, with 60 per cent of our sales from the locally produced Commodore and Cruze.”


Kapitelli said despite the loss, Holden was well positioned for future profitability thanks to its strong and healthy balance sheet and zero debt.

“Holden remains committed to a long-term future in Australia.

“In 2012 we increased our capital spend in plant and equipment by $65 million to over $100 million in preparation for the launch of VF Commodore.

“Holden also spent $197 million on research and development activities, taking our R&D investment to over $1 billion in the last five years.”

Holden sales are down 10.3 per cent after the first four months of 2013 to 32,771 units in a market that is up 5.6 per cent overall.

Commodore sales are down almost 40 per cent (from 10,596 to 6510) as stock dries up ahead of the VF's June launch, while the Cruze has dived 24 per cent from 10,520 sales in 2012 to 7992.

The Commodore-based Ute and long-wheelbase Caprice have also lost ground, along with the Barina and Barina Spark, leaving the positive results to the brand’s Captiva 5 and 7 SUVs and Colorado ute.


Holden chairman and managing director Mike Devereux said the impending introductions of the all-new VF Commodore, updated Cruze, and brand-new Trax compact SUV and Malibu medium sedan would improve the manufacturer’s market position in the second half of 2013.

“We have restructured our manufacturing operations to improve productivity, reduce structural costs and match production to demand, and at the same time we’re focusing on new products and marketing initiatives to ensure our future competitiveness,” Devereux said.

“In addition to our new product investments, over the past few years, Holden dealers have invested more than $100 million in new and substantially upgraded facilities, vehicle service equipment and customer management systems, the largest dealer investment in decades.”

Ford Australia is expected to announce the results of its 2012/2013 financial year in the coming days.