Holden production, exports grow from lean manufacturing

Advanced manufacturing techniques helped Holden Australia make a profit for the second consecutive year in 2011, despite reports that the local car industry is on the skids.

[Image, right: The interior of the locally-made Holden Cruze small car.]

Vehicle production reportedly rose 36.8% in 2011, with 90,424 cars made in Elizabeth, South Australia, up from 66,061 in 2010.

Engine production was up 2.9%, with 101,019 engines produced in Port Melbourne, Victoria in 2011, up from 98,146 in 2010, the company said.

Holden vehicle exports were up 54.3% in 2011, with the car manufacturer shipping 12,068 cars to the Middle East, New Zealand, North America, Brazil and South Africa.

Engine exports rose 14% to 57,792 units, with V6 variants exported to South Korea, China, Thailand and Germany.
Holden reportedly spent $231 million on R&D in 2011, up from $179 million the previous year, bringing the total investment in R&D over the past five years to $1.3 billion.

According to Holden chief financial officer George Kapitelli, the R&D investment has paid-off.

During the period, the company developed the Cruze small car – which has continued to be a popular choice for car-buyers – and the Elizabeth and Port Melbourne plants began operating with a leaner cost structure.

Holden recorded a net profit of $89.7 million in 2011, continuing the positive financial results from 2010.

Though Holden’s consolidated revenue was down from $4.4 billion in 2010 to $4.3 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, the company says it is establishing a solid foundation for future growth.

“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,” said Kapitelli.

“After the financial crisis we reshaped our business to improve structural cost, reduce our reliance on exports and bring the Cruze into local production so we could continue to make cars in Australia. Now around 60 per cent of our Australian sales are Australian-made cars, this is a great result.

“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.”

Holden Australia will build two new ‘world-class’, ‘fuel-saving’ cars at its Elizabeth, South Australia plant in the second half of this decade, after receiving $275 million from the government.

The investment package comes from the Australian, South Australian and Victorian governments, who claim they have ‘secured’ car manufacturing in Australia – at least until 2020.

Holden announced in April that it had appointed a new executive director of manufacturing to oversee the company's lean operations.

Richard Phillips, a former Holden apprentice, reportedly played an integral role in the successful launch of the locally-made Holden Series II Cruze sedan and hatch in 2011.