The Truth about Manufacturing cars in Australia

[Joe5619]

Originally Posted by jpd80

In the end, all I have said is that :
1) Holden is looking to increase production by lowering its RRPs (you cocnur with that)2) Lowering RRP on a brand new model reduced potential profit per car (you also concur)

Isn't Holden in the process of retrenching 400 odd people & slowing the line rate? Or do I have that wrong?

[Joe5619]

Originally Posted by jpd80

I will admit this, the changes in pricing probably won't affect Evoke or SV6 profitability that much, where the drama comes in
is the reduction in pricing applied to premium products that would normally command much higher prices and deliver
far more profit per vehicle - that's where I see the reduced profitability.

Can I ask would models you are talking about so I can take a took at the pricing?? I still personally think Holden is lossing NIL from these on paper price changes

[BLUEYBA]

Just heard on the radio that Ford are going to announce this morning that they are stopping production in Australia. Not sure if its true just hear it on 2UE

[music189]

Originally Posted by BLUEYBA

Just heard on the radio that Ford are going to announce this morning that they are stopping production in Australia. Not sure if its true just hear it on 2UE

Originally Posted by chookaradley

I feel sick, like a familly member has died

On 3aw in Melb too, what a stuff up

[stevz]

Originally Posted by jpd80

While that may be true, there's enough being said in the public to get an idea of what's going on.
I simply state that Holden is choosing production over maintaining potential profit on fewer vehicles built
and that is putting more pressure and risk on its business.



Good, you finally challenge me with the real meaningful grounds for debate.
So if you make more units, expend more resources and costs but cut selling price,
how many more units do you have to sell to make the same profit you would with the higher RRPs?


Sure and building 10,000 Commodores a month for little or no profit would be even worse with labor and costs expended to do it.

So somewhere in between lies the sweet spot. "Right Sizing" is all about matching true demand to production,
And what Mulally showed Ford was that not as many costs are as fixed as people believe.
If your production volume becomes less, the change can be asymetrical and still give a good ROI.

In the end, all I have said is that :
1) Holden is looking to increase production by lowering its RRPs (you cocnur with that)
2) Lowering RRP on a brand new model reduced potential profit per car (you also concur)

Here's where we differ:
3) By doing that Holden is potentially increasing exposure to greater risk by having to make more products
at increased total cost in order to get similar profit instead of keeping RRPs higher and selling less.

The nexus of the problem is that people want to believe that by lowering RRP, sales will increase
and that those increased sales will nett more profit and more business activity, something that's not guaranteed.

I hope VF is a success and increases sales per month but my concern is how it achieves that by reducing RRPs across the board.
Holden is making a gamble that lowering prices will increase net production and profitability - that is where I see the real risk.

The reason I question your comments jpd is that from where I sit, it seems that you constantly and deliberately exaggerate and manipulate information to portray Holden in the worst possible light. Yes I know this is a Ford forum as such, but I prefer to take an impartial view on things as I don't want to see either manufacturer fail.
If you cast your mind back to around 2010 you were repeatedly telling anyone that would listen that Holden was in the business of giving away cars to fleets, while Ford on the other hand was only building high series cars and selling more to private buyers. What happened when the detailed figures were released? It blew your theory out of the water and proved that it was the total opposite. It was also revealed that Ford had a sea of base unoptioned XR6's sitting on the grass at Broadmeadows which took forever to shift. This is a prime example of why I am so skeptical of you theories, and who can blame me?
Don't get me wrong, I have nothing personal against you and I do find some of your posts informative and good to read but it would be better if you kept it factual rather than biased and misinformed rubbish to impress a few of your one eyed followers.

[Bossxr8]

Originally Posted by BroadyFord

The Aussie dollar has hit a new year low, dropping below 0.97

Great news for local manufacturing! Holden should ramp up exports.

Holden base their prices on 80c to the US Dollar, so they are still way off where they need to be.

[jpd80]

After today's announcement, nothing matter anymore to me.

I wish VF and Holden every success.

[stevz]

Originally Posted by jpd80

After today's announcement, nothing matter anymore to me.

I wish VF and Holden every success.

Yep, I think in light of the circumstances there is no point continuing this discussion.