Holden and Ford post big losses in Australia

GM Holden will cease production in Australia in 2017 and close down its South Australia factory. Photo / Supplied

Continued losses mean GM Holden will cease production in Australia in 2017.

Carmaker hopes closure will return company to profitability It's been a tough week for the two big Aussie car companies, with both reporting huge losses for 2013.

Holden Australia has recorded its biggest financial loss in the wake of its announcement that it would cease local manufacturing.

As a direct result of the announcement that Holden would cease manufacturing in Australia by the end of 2017, the company recorded a A$500 million ($540 million) one-off impairment charge on property, plant and equipment. In addition, the company recorded a A$122 million charge for employee separation costs in 2013.

The company's consolidated revenue increased slightly from A$4.02 billion in 2012 to A$4.05 billion in 2013, because of an increase in vehicle sales in the second half of 2013 following the launch of 10 new or updated vehicle models during the year.

The increase in consolidated revenue was not sufficient to offset the costs associated with ceasing manufacturing, and the company recorded a net loss after tax of A$553.8 million in 2013.

Holden chief financial officer Jeff Rolfs said the decision to cease domestic manufacturing was the right decision to return Holden to sustainable profitability.

"Clearly there are significant costs associated with our decision to cease domestic manufacturing of vehicles in Australia by the end of 2017. These costs drove the financial loss for Holden in 2013," said Rolfs.

"We are mindful of the impact on our employees and our financial results, but it was the right decision. Manufacturing vehicles in Australia is, unfortunately, unsustainable."

Ford Australia's decision to shutter its Victorian factories in 2016 have caused the company to lose A$267 million after taxes in 2013. The result follows losses of A$141 million in 2012 and A$290 million in 2011.

Ford Australia was hit with a A$242 million loss from the write-down of its two Victoria plants in Campbellfield and Geelong.