Holden's Police Caprice program "challenging"

Holden has sold 600 units of its locally-built Caprice into the fleets of US law enforcement agencies, where the large car appears to have been very well received.

But we're never likely to see a Caprice-led recovery for Holden. Not when one Australian dollar is buying 1.0375 US dollars. That's even higher than December of last year, when Holden MD Mike Devereux admitted that the export program was not likely to be lucrative while the Aussie was so strong. At least, as Devereux said at the time, the components being purchased from North America for production of the car were cheaper in the current context, so there were cost savings to offset the lower-level revenue from sale of the car.

Executive Director of Sales & Marketing at Holden, John Elsworth, today announced that the company has received orders from the US for 600 of the specially built cars for police work. One of those orders was a 300-strong purchase from Forsyth County in Alabama, as reported by the Nine Network two weekends ago.

"The car is doing pretty well over there," said Elsworth. "We're not going to talk about how many we've built, but we've sold about 600 odd. It is a very challenging time to be exporting cars — especially when you're talking about police cars, because it's all business done at tender. To be quite honest with you, you're selling to government departments who are after pretty sharp pricing. So it is a very challenged part of our business at the minute — exporting cars to America. Also when you consider that we are competing against American-made cars in the Taurus and the Charger...

"So, is it above or below [forecast]? It would be in line with our expectations; I'll leave it at that.

Asked point blank whether the car was profitable for Holden in the present climate, Elsworth wouldn't be specifically drawn.

"At dollar parity, exporting cars to America is a very challenging thing to do and make money; I'll leave it at that."

In the short term, Holden's Caprice export program appears to be a critical success rather than a commercial one, but it keeps the Holden brand at the forefront of public perception  (in the hallowed halls of GM in North America not least of all).

But Holden is not drowing in a sea of red ink as a consequence, the company reports. Production at Elizabeth is ramping up to handle the extra demand for the Cruze hatch. The line rate has increased from 430 cars a day to 480, with the small car accounting for 185 units. There's presumably some substitution following the introduction of the hatch, now absorbing some demand previously reserved for the sedan. 300 new jobs have been created at Elizabeth and a further 200 in the local supply industry.

The hope, according to Elsworth, is to see Holden products occupy the first and second position in sales — Commodore and Cruze — instead of first and fifth, as at the moment. And the company's financial position, notwithstanding the Caprice PPV as its own cost centre, is reportedly much improved from the dark days of the GFC in 2008.

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