GM Holden Sees Net Profits for Second Consecutive Year

GM Holden reports a net profit of A$89.7 million ($91.4 million) for 2011, which the General Motors Australian subsidiary says establishes a solid foundation for the future.

Coincidentally, its net profit was the same amount it received in taxpayer funding last year, the auto maker says.

Consolidated revenue was down slightly, from A$4.4 billion ($4.48 billion) in 2010 to A$4.3 billion ($4.38 billion) in 2011, due to a softening of the large-car market and shortages of some imported vehicles in the important light-commercial and medium-SUV segments.

GM Holden says it continues to make a strategic contribution to advanced manufacturing, design and engineering in Australia, spending A$231 million ($235.4 million) on research and design in 2011, up from A$179 million ($182.4 million) in 2010.

This takes its total R&D investment to more than A$1.3 billion ($1.32 billion) over the last five years.

GM Holden Chief Financial Officer George Kapitelli says a second-consecutive year of profit was driven by the success of the Australian-built Cruze small car and a leaner cost structure.

“Local car makers face tough economic conditions with the high Australian dollar, higher prices and disruption in the local supply base and increasing competition and segmentation in the market,” he says in a statement.

After the 2008-2009 global financial crisis, GM Holden reshaped its business to improve structural cost, reduce its reliance on exports and brought the Cruze into local production so the company could continue to make cars in Australia.

“Now around 60% of our Australian sales are Australian-made cars; this is a great result,” Kapitelli says.

“We’re running our business responsibly and sustainably for the long term. 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.”

GM Holden vehicle production climbed 36.8% last year to 90,424 units from 66,061 in 2010. Engine production rose 2.9% to 101,019 from a prior-year 98,146.

Vehicle exports jumped 54.3% in 2011 to 12,068 units and were shipped to the Middle East, New Zealand, North America, Brazil and South Africa. Engine exports increased 14% to 57,792, with V-6 variants sent to South Korea, China, Thailand and Germany.

GM Holden’s domestic sales fell 5.1% in 2011 to 126,095 units for No.2 position with a 12.5% market share. The Commodore and Cruze marques were among top-5 selling cars in Australia.