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SA premier repeats call for car support

Lifeline: SA premier Jay Weatherill has repeated his call for opposition leader Tony Abbott to throw more support behind the Australian car industry.

Holden’s $153m loss prompts Jay Weatherill to re-sound call for coalition support

Holden logo9 May 2013

SOUTH Australia’s premier has reignited doubts over the future of Holden in Australia, calling on the federal coalition to shore up funding for the car-making industry.

The South Australian government has committed to help Holden keep building cars at its Adelaide-based assembly line, and has expressed alarm at the coalition’s plans to cut $500 million of assistance to the industry if it is elected.

Compounding SA’s problems was the announcement yesterday that Holden had posted a $153 million loss last year – its second biggest on record – as it struggled with a rising Australian dollar and declining sales of its locally made and exported cars.

Mr Weatherill today repeated his call for the coalition to throw its support behind Holden, and fellow Australian car-makers Ford and Toyota.

“The South Australian Government is committed to the current investment. What we need is a willing Commonwealth partner,” Mr Weatherill told the ABC.

“The current federal government is committed,” he said. “What we need to know is whether Tony Abbott's Liberals will be committed to a future for Holden should they form a government after September.” Holden’s poor return for the 2012 calendar year relates directly to an almost $200 million writedown of its Australian car-making business, which is making fewer cars than ever before.

Holden chief financial officer George Kapitelli posted on the car-maker’s blog yesterday that it had been a difficult year for the brand.

“Holden has talked very openly about the head winds we face as a manufacturer – and in our financial results released today you can see in black and white how tough it is to compete in Australia,” he said.

Mr Kapitelli said much of Holden’s problems related to the strength of the Australian dollar, and Holden’s ability to compete with cheaper imports.

“When the Aussie dollar goes up, overseas vehicles become cheaper and car importers have more margin to play with to compete with, to reduce their prices, to add more content, or spend more on advertising,” he said.

“When you make cars in Australia you don’t have this luxury – your manufacturing costs are largely fixed, you have to find ways to be more efficient, to reduce your margin simply to compete with imports.” Last year, Ford Australia posted a $290 million loss for the 2011 calendar year, its biggest on record. It is expected to release last year’s financial figures later this month.

In contrast, Toyota Australia posted a $32.6 million loss for its 2011-12 financial year, which ends on March 31.

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