Hot on the heels of Fords recent $40.3 million loss announcement comes a similar announcement from GM Holden but this loss is a little bigger?to the tune of $146.56 million for the 2006 calendar year.
Holden reported a similar loss of $144.6 million in 2005 which at the time was put down to VE Commodore development costs which seems reasonable given the $1 billion plus cost of the VE project.
This time around Holden are attributing the loss to a number of factors including the launch costs for the VE Commodore and WM Statesman ranges, reduced market share, high fuel prices and unfavourable exchange rates which favoured imports and hampered Holden?s exports.
In addition to this Holden also laid off a shift at its Elizabeth manufacturing facility in Adelaide which cost the company $20 million in redundancy packages. There was also and R&D investment of $307 million for the period.
Overall total revenue for GM Holden in 2006 was down 7.8 per cent to $6.149 billion with domestic sales down a further 16.2 per cent on those of 2005. There is no doubt that the outgoing VZ Commodore had its part to play here, proving difficult to move from showroom floors in the lead-up to VE day.
The VE Commodore has taken a while to pick up sales momentum but it appears to have ?arrived? in recent months and is maintaining its place as Australia?s top selling car. Engine exports proved to be the strong performer with sales rising 6.8 per cent to 212,266 units which helped total export revenue hit $1.852 billion.
We expect Holden will have a more successful 2007 but they will need to make hay while the sun shines. Ford Australia?s 2008 line-up with their new Falcon ?Orion? and Mondeo mid-sized car will be the next challenge for Holden and it is our prediction that Ford are going to gain some market share at Holden?s expense.
Source : GoAuto