US loss to cost Holden $1bn a year

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US loss to cost Holden $1bn a year
Article from: The Sunday Mail (Qld)



Carly Crawford

April 26, 2009 12:00am

EMBATTLED carmaker Holden stands to lose up to $1 billion a year when its ailing United States parent dumps major brand Pontiac.

General Motors is this week expected to announce plans to ditch or sell the brand as it desperately works to stave off bankruptcy.

That means the maker of Australia's most popular car could be in for more pain.

Holden had been banking on exporting 30,000 VE Commodores each year to the US, where the model is sold as the high-performance Pontiac G8.

VE Commodore exports began last year in a deal worth about $1 billion a year.

Holden builds the left-hand drive VE Commodore – with help from a $6.7 million Federal Government loan – at its plant in Elizabeth, South Australia.

The company spent $77 million preparing the plant for the vehicle's production, hailing the project as the future of the Elizabeth plant.

The deal was expected to lift Holden exports to 70,000 a year – half its total production.

Although the car was well-received by US auto critics, the world economic crisis meant the G8, which retails for $A53,000 in North America, has failed to achieve strong sales.

Only about half the 25,000 G8s delivered to the US have been sold.

Holden, which has not made a profit since 2004, had hoped VE Commodore exports would reach up to 50,000 a year.

It is Holden's second blow this year over Pontiac's demise.

In January, Pontiac shelved plans to import a G8 ute from Australia as its performance sports truck.

Not looking good for Holden, bright side, more FORDS will be sold downunder !!!