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Imported Holdens won’t be cheaper

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    Even the proposed Free Trade Agreement with South Korea will not necessarily affect prices. Photo Gallery

Future cars brought in by Holden won't be low-cost even though they come from low-cost countries.

galleryHolden cars will not suddenly become thousands of dollars cheaper when the company begins to import its full model line-up from low-cost Asian countries from 2017.

Although other General Motors factories in South Korea and Thailand can build cars for $3750 less than Holden does in Australia, the savings likely won’t be passed on because the company made a loss on its locally-made models.

After Holden posted its second-biggest financial loss on record last year, the company’s chief financial officer George Kapitelli said: “We are losing [money] on our locally produced cars and that’s obviously a position we need to reverse.”

“Holden’s imported portfolio is profitable. The losses … are a direct result of Holden building cars in Australia,” Mr Kapitelli said in May.

A statement from Holden yesterday said: “Holden will not speculate on future pricing strategy for vehicles that are four years away. We have and always will have a continuous focus on offering Australian drivers the best value for money. That will not change.”

Even the proposed Free Trade Agreement with South Korea -- which would remove the 5 per cent import tariff on vehicles imported from there -- will not necessarily affect prices.

The biggest seller of Korean cars in Australia, Hyundai, says currency changes have more impact on new-car prices than do import tariffs.

"There are a multitude of variables that affect the pricing and profitability of imported cars," said Hyundai Australia chief operating officer, John Elsworth.  "If you reacted to just one, you'd be changing your pricing all the time," said Mr Elsworth. "You have to work longer-term in this business."

Holden was $152.8 million in the red in the 2012 calendar year despite $73.5 million in government funding. Its biggest result in the red was $210.6 million in 2009. The 2012 figure means Holden has lost $730 million over six of the past eight years, and a $202 million profit over the same period.

The last time Holden finished in the black, in 2011, the profit of $89.7 million was identical to the taxpayer funding it received in that calendar year.

This reporter is on Twitter: @JoshuaDowling

 

Comments on this story

Displaying 3 of 28 comments

  • Already gone to BMW, the extra cost with 5 years of free servicing or 80,000 klms and three years unlimited klms warranty plus three years BMW roadside assist, three year tyre and rim warranty with run flat tyres and a coupe made in Germany at 4.5/klms klms far exceed the extra outlay for a Chinese junk or a recalled Toyota whose service costs exceed BMW'S.

    David of Qld Posted on 09 January 2014 12:36am
  • I suppose GMH has too keep prices up as it wants to pay back all the money gifted to them by the Aussie taxpayer..........yeah right.

    PC of Australia Posted on 06 January 2014 10:14am
  • Don't forget to boycott Ford as well. Looks like Toyota is for me! smile

    Amazed of Warnrt Posted on 06 January 2014 6:53am
  • Like Bondswear, Holden's dividend to shareholders will not include any of my hard-earned. The out-sourcing corporations deserve nothing in the way of handouts from Oz taxpayers. Any government (or opposition) member who even suggests pulling them out of the hole they're digging themselves will be giving their opposite number a gift for the next election. It will be tough for the distributors, but while they are helping foreign companies profit at the expense of Oz workers, it hinders investment in Australian manufacturing industries.

    Ian Carter of Canberra. Posted on 05 January 2014 8:21pm
  • as if anyone is going to buy holden once off shore, how unaustralian

    Frank of Brisbane Posted on 03 January 2014 3:37pm
  • Simple solution, don't buy them, see how long it takes to drop price then. Never been a Holden fan, but the same goes for FORD and Toyota when they go off-shore!!!!!

    Graham Dodd of Rossmore NSW Posted on 02 January 2014 1:09pm
  • Holden has still made cars here while we were stupid enough to keep giving them cash that went straight back to US HQ. Now like all the other treacherous corporate dogs they refuse to invest in Australias future and our kids but want to import their crap at greater profit all sanctioned by our great leaders. A great country betrayed by politicians one after another. Boycot all Holden products and all others that sell out our future for increased shareholder dividends.

    Stephen Chan of Petrie Posted on 01 January 2014 12:33pm
  • If you look at the $ per vehicle that the Australian Taxpayer has put into Holden, Ford and Toyota, they will see that the figure has been much higher for Ford and Toyota.

    Tony Posted on 24 December 2013 12:10pm
  • Australian made cars have always been substandard anyway. enough money wasted.rip.

    synedis of nundah Posted on 23 December 2013 8:05am
  • Yes Steve you are 100% correct, Seriously Folks, Australia is going down the drain and we WILL be invaded soon and taken over, how will we fight back?, with sticks and stones...We are the Weak White trash of the Pacific. Thats what the Asians call us. We are their dirt hole. We exported all our knowledge to the Asians over the past 20 years...all well documented. THen we exported our jobs, as its too dear in Aust. You watch, the price of cars will now skyrocket..because the $ is too low!! yes, thats right!! Look up the UN "Agenda 21" and "The Lima Declaration" (convention), both set to destroy the perceived rich White countries. This is just the continued journey to the end folks, Europe or the US looks like a nice place to live, better start packing....wink.

    Spike1 of Adelaide Posted on 22 December 2013 4:21pm
  • Not many Holden's are sold overseas.In fact outside of New Zealand They don't even exist.About time Elizabeth closed down like the other factories did and move them off shore.Everytime I see a Commodore I think of the eighties song Walk the Dinosaur.

    franz chong Posted on 21 December 2013 10:00am
  • @ Anyone who says we should stop buying Holdens because they are closing the plant'. That logic does not work, not enough of us are buying them and seem to prefer imports. Now Holden are talking about being a full time importer, and now people are saying they want to abandon them even more? Holden will still employ many people here and need support. Holden have done there best to compete and keep Australian dollars in the country.

    Dave S Posted on 20 December 2013 2:53pm
  • Well GM can take there so called imported Holden s and place them where the sun don't shine .. how about you mongrels pay pack the millions of tax payer dollars that you gladly accepted.

    Colin Van Der Heide of Crestmead - Logan City Posted on 19 December 2013 4:05pm
  • Delighted to hear that the prices won't drop because Holden want to recoup the losses they made on each car made and sold here . This is so that they can repay the hundreds of millions of TAXPAYER dollars they were given isn't it.

    Gary T Posted on 19 December 2013 9:27am
  • I agree 100% with Sam of Australia. If the Australian Commodore is sold for a loss in Australia, why is it shipped half way around the world and sold for 10 grand less? As an accountant I would like to point out that there are so many ways to cook the books when you're selling yourself parts from overseas that a huge loss on local product using imported parts (drive trains etc) is just a mouse click away. It all depends on what you want to tell the Oz govt and unassuming public. I'm a Ford man, but enjoyed the rivalry and the excuses are all the same in the end.

    Paul of Australia Posted on 18 December 2013 6:35pm
  • surprise, surprise...the aussie tax still applies! im so sick of being rorted just because i live in Australia...theres a very good reason people now prefer to buy goods online from overseas, & that is the aussie tax isnt applied, ever! and all the local retail sector can come up with is, is to impose gst on imported purchases instead of bringing prices into line relative to overseas markets...greedy sods!! holden included!!

    mars of bne Posted on 18 December 2013 3:49pm
  • Can we please clarify the comments in the article stating that the imported variant would not be cheaper with the following answers. 1. Why in the united states is the current Chevrolet SS (our ssv) $11,300 less expensive when it is built here and shipped across? 2. Why was the Pontiac G8 (our ve commodore SS) selling for $33,970 in the USA and $44,800 here at time of release? They were priced so cheap Thriftey were hiring them for $79.00 a day 2 months after their release in L.A. 3. The engine and drive train has been provided by Chevrolet for many years on all v8 engines relased from the time of the GEn 3 what was that VT series 2 or VX????/. Exactly what was being produced here that kept the cost so high???. the panel work or the paint like when i got my new e3 GTS and the inside of the front guards in the door jams was not sprayed. I have owned 3 HSV in 6 Years purchased NEW, 1 ssv ve ute purchased new, 2 Captivas for my business, enlighten me an ex-Holden supporter. And please do not ramble on about economies of scale we are comparing production costs apples to apples.....

    Sam of Australia Posted on 18 December 2013 11:32am
  • I guess the government will now drop the tariff added to new overseas made cars to help the local industry, seeing we don't have a car industry anymore? Faint chance of that, hey, we have to protect Toyota. What happened to capitalist free enterprise? Seems it only works when you take money from the government (taxpayers). Communism by any other name...

    Stirling Moss of Qld Posted on 18 December 2013 10:42am
  • If you are seriously considering buying a imported GM car (especially Asian built) then the purchase price is the least of your worries.

    ThayGuy of Brisbayne Posted on 18 December 2013 9:49am
  • Of course they won't be cheaper, cars are sold in Australia on the basis of what they think they can get for them. We are conditioned into thinking that we should pay so much for BMW, and so much for a Hyundai etc.

    Shaikh Dick of Brisbane Posted on 18 December 2013 9:35am
  • But the real question here is what will the quality be like? Will they be safe and reliable or will there be recalls like with other Chinese made cars?

    Joan Bennett Posted on 18 December 2013 8:14am
  • GM has gone the same way as company's like Bonds clothing, all being pressured by world prices, our labor costs are far in excess of other country's who do not give their workers the benefits which we do for ours. If they were allowed to change the prices of their products by the hour as OIL company's do, problem fixed.!!! pn car company's overseas are not forced by their governments to have such a high grade of accessory's as standard.

    Bill Jamieson of Australia Posted on 17 December 2013 2:42pm
  • Does this mean we are going to get over charged for a product they are building for cheaper in China? These company’s complain Australia is too expensive to manufacture goods here. These companies are the ones over charging us for everything Power, Software, clothes. Example Holden sell the SSV commodore in USA for cheaper than we can buy it here and they get better engine and specification. They wonder why no one is buying there old out dated and overpriced piles of....... I did buy a new commodore once but it fell apart and they would not fix their product and treat us like shit. I went on to become part of a vehicle purchasing team with 120m a year budget and not a Holden to be seen

    HT of Silverwater Posted on 17 December 2013 8:48am
  • Sunshine Coaster (comment above) you are wrong about the fuel economy. An average Commodore or Falcon gets better fuel mileage than most of the lame SUV's that people seem to want to drive today. Commodores and Falcons are a bargain in new cars. To buy a euro sedan that matches a $35K Commodore or Falcon you would have to pay $100K plus. It seems that Australians are destined to wallow around in a fleet of lame Asian SUV's.

    Gary of Brisbane Posted on 17 December 2013 8:16am
  • Holden lost 'touch' with reality. Price of fuel has shot up since 2005 and instead of say working a front wheel drive with a diesel they 'insisted' of keeping the 6 Cylinder 3.6 Lt engine. This is what cost them the ' Mum and Dad and 2.5 kids market' Holden has never been high on 'specs' either. like someone said here the Koreans have left them for dead when it comes to 'bang for your buck' in a car. Holden Commodore made in China?? Who would have thought that 10 yrs ago? Times are changing. Australia is simply to expensive a place for manufacturing. Toyota will go next.

    Sunshine Coaster of Peregian Beach Posted on 16 December 2013 6:21pm
  • Holden's quality has dropped in the past decade & is overpriced so I imagine that by shutting down the Australian plant will also cost them in sales for the imported version. I for one will never buy another Holden after the last one disintergrated once it hit the 100K 5 yr warranty expiry. Hyundai poops all over the Holden with it's safety features & all the extras come as standard which you pay extra for in Holden. We should all boycott Holden imports for shutting down here & putting 1000's out of work.

    Linda Posted on 14 December 2013 6:19pm
  • Most local Holden owners buy Holden because it's Australian and MADE IN AUSTRALIA. How many Holden are sold overseas? How many Holdens have you seen overseas. Smart move to move the manufacturing overseas, the presence of Holden cars in time to come will be as common as the Tasmanian Tiger.

    Thinking Twice Now Posted on 14 December 2013 12:43pm
  • The Fisherman's Bend factory made planes engines and vessel components during WW2. I was proud to work there in manufacturing I the 1970s. So we no longer make our own cars and aircraft and our ships have to be designed and built overseas. Globalization and free trade philosophies are diminishing our manufacturing,farming & mining industries. Primary secondary & tertiary industries and hence our economy are not under the control of Australia's plethora of politicians or our myopic business managers. If we don't manufacture highly technical commodities as well as importing basic foods & even need foreign masters to suck our minerals from our ravaged earth then of what do 23,500,0000 Australians have to be proud about? We must take control of manufacturing, mining & primary production here and be our own masters. Uncontrolled "free trade" in subsidized overseas products will in the end make all Australians economic slaves to what we now describe as "emerging economies". I think back to my youth in the 50s to the 70s when we made things here, yes even Vanguards & Leylands as well as the big 3 automotive icons. They were the days and we shall all be sorry to see them lost!

    Steve Mahoney of Eumundi QLD Posted on 14 December 2013 8:11am
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