Holden expects black ink, increasing exports

GM HOLDEN is gearing up to make a profit next year, aided by – rather than because of – a surge in exports after the resumption of VE Commodore sales in Brazil from November.

Chairman and managing director Mike Devereux revealed that the company was no longer reliant on overseas sales to make a profit in Australia.

He expects Holden will be in the black in 2011. In 2009, it recorded a $210.6 million loss, mainly as a result of export earnings, particularly in the US.

With the 70,000 annual PPV Police Patrol Vehicle market in the United States open to Holden from October, and a return to more volume in the Middle East with the Caprice, the company says it is ready to start taking more orders.

This is on top of the initial order from Chevrolet do Brazil for Holden to supply 600 E85-compatible Commodore 3.6-litre DISI V6 petrol engines for the Omega ‘C’ Fittipaldi sedan.

Holden says that it hopes that figure will rise to about 1800 every year, to top the levels it was achieving during the 2000s with the VT-VZ Chevrolet Omega ‘B’ from 1998 to 2007. The company temporarily halted VE Series 1 Commodore exports to Brazil during 2008 in the midst of the global financial crisis.

Left: Holden's Chevrolet Police Patrol Vehicle.

Speaking to the media at the VE Series II Commodore reveal in Melbourne this week, Mr Devereux said Holden was now prepared to export “that is set for profits.”“Holden is set up to be a profitable export company in Australia,” he said.

“Exports will help. But exports depend on the economic conditions of other places, and so if you set up your business to depend on it, it is not the smart thing to do.

“So we’re set up to make money in Australia building and selling cars here, and then importing a few.

“The export programs we got going right now – like the one that we are talking about today – I am very interested in seeing how that goes, talking to (Chevrolet do Brasil) about volumes.

“And the (PPV) Caprice program is imminent. In October we begin to take orders from police chiefs, from Michigan State to the LAPD. They actually have the vehicles and have had a good look at them.

“And we’re prepared for the volumes that they might need – the market for police cars in the States is about 70,000 cars per year, and Ford and Dodge have dominated that market of late, and we haven’t had a true rear-wheel drive alternative, which police prefer from a performance standpoint. And there are changes right now. Ford is coming to market with a vehicle … that is all-wheel drive and Dodge have had their Charger in the market for a long time, so we feel we have the best product for the police fleet.”“(And) we will be selling the vehicle in the thousands, absolutely … thousands, not hundreds,” Mr Devereux added.

The Holden boss – whose last post was as GM’s managing director for the Middle East region – hopes that improving economic conditions around the world will bring in more orders.

“As other niches present themselves we will take them.

“In the Middle East, I wish we were selling more Caprices.

“I don’t like being the guy who was over there when the GFC happened, and Caprice sales (collapsed).

“But we’re still on track to sell four to five thousand Caprices at least there this year … but we used to sell tens of thousands – 20,000 not too long ago. The combination of the rise of the Australian dollar … has made a difference.

“So would I like to sell more cars outside of Australia? Sure. But we’re set up to be able to win here. And that’s really what the story is … all of GM’s businesses are set up to do that.”