Holden posts $152.8M profit ahead of plant closure

HOLDEN has recorded a healthy profit as it prepares to exit Australian manufacturing operations in October.

The good old days: Seats and interior trim are fitted to the Commodore at Holden's Elizabeth car plant in the 1990s.

HOLDEN has announced an after-tax profit of $152.8 million for 2016, its best result since 2004.

But the company, which will close down its local manufacturing operations in October, says it is still losing money making cars in Australia.

The company made $125 million on its manufacturing operations, but that included $128.2 million funding from GM head office in Detroit and $50 million from the Federal Government.

On top of that, it would have faced another $125 million bill for depreciation on its manufacturing equipment if it wasn’t closing its Elizabeth Plant in South Australia in October.

Holden says its manufacturing operations remain unprofitable. Picture: Supplied.

The company made $27.3 million from its import business and says it will be profitable once it switches to an import-only business later this year.

Revenue was down slightly on 2015 to 3.56 billion and market share slipped as sales dipped by 8 per cent.

Holden Chairman and Managing Director, Mark Bernhard, said the result “highlights the strong profitability of our long-term business plans.”

Holden managing director Mark Bernhard. Picture: Aaron Francis

“We’re facing challenges as a business and undergoing fundamental changes, there is no sugar coating that. But our consistent financial results highlight the underlying health of the business,” he said.

Those challenges include falling revenues, poor customer loyalty and a big reliance on the home-grown Commodore and its offshoots, which still make up roughly a third of its sales.

The Commodore still accounts for a large chunk of Holden sales. Picture: Supplied

The next generation Commodore will be sourced from Europe and won’t include a V8, which has angered diehard fans of the brand.

The new model is expected to sell a fraction of the numbers regularly achieved by the home-grown Commodore, which was the country’s top-selling car for 15 straight years before buyers began their drift towards small cars and SUVs.

Last month the Commodore slipped out of the top ten sellers and was overtaken by the company’s Colorado work ute as Holden’s most popular vehicle.

Holden sponsored this year’s Mardi Gras. Picture: Supplied.

In preparation for the end of local manufacturing, the brand is trying to reposition itself as a more youthful and inclusive brand that will appeal more to women.

But its sponsorship of events such as Sydney’s Gay and Lesbian Mardi Gras hasn’t gone down well with some traditional Commodore buyers.