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THE small car from the Holden stable has kept the carmaker in the black, as support for the Commodore slid in 2011.

Strong sales of the new compact Cruze helped offset the downturn in demand for the Commodore and led to a modest profit of $89.7 million for GM Holden, down from $112 million a year earlier which followed six years of losses.

The bottom line almost exactly matches the cash from Canberra that came to Holden under the Automotive Transformation Scheme to put the Cruze into production in Adelaide.

Holden will invest the profit in ongoing spending for research and development work and capital projects, including the updated VF Commodore, scheduled for 2013.

In line with post GFC policy, it will not return a dividend to GM in Detroit.

The profit is well down from earlier results for Holden - which was highly profitable through the 1990s - but still enough to maintain its local operation. "The plan is to totally re-invest that profit. We're confident that's enough to be sustainable going forward," Holden's chief financial officer George Kapitelli said yesterday.




"Local production is viable and sustainable with two car lines. We need this investment to level the playing field with our global competitors."

The details of Holden's performance are a sharp contrast with overall production of both cars and V6 engines rising but overall revenue falling slightly - primarily because of an 11.6 per cent drop in Commodore sales that has accelerated to a 22.8 per cent fall through the first four months of this year.

Mr Kapitelli credited restructuring and leaning of the whole company for the 2011 result, as well as the impact of the Cruze.

The Cruze contribution allowed Holden to build 90,424 cars last year, an increase of 36.8 per cent, and it also lifted V6 engine production by 2.9 per cent to 101,019.

It also increased its vehicle exports by 54.2 per cent, thanks to shipments of 12,068 cars to the Middle East, New Zealand, North America, Brazil and South Africa.

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