Holden to build small car?
21 May, 2008
33 Comments 
GM Holden will possibly follow Ford down the path of diversifying local production by adding a small car to its local build program in the future.
- David Twomey
A decision will be made in the next two to three years on the product mix of vehicles that GM Holden will build in Australia and a car other than the Commodore is likely to be added to the production mix.
In Melbourne for a series of high level meetings with senior Asia Pacific GM executives, GM Group vice president and president GM Asia Pacific, Mr Nick Reilly, told a media briefing that GM Holden could build a smaller cars alongside the Commodore at the company’s production plant at Elizabeth, near Adelaide, in South Australia.
Mr Reilly said GM Holden had come through a particularly tough couple of years as the Australian car market had made an irreversible change away from a predominantly large car market.
“That change has happened and I don’t see it being reversed,” he said, acknowledging, perhaps for the first time publicly, that GM Holden faces a very different future.
“One likes to think that you are manufacturing to suit the domestic market, and that has clearly changed, and in my view it is not going to reverse and may even go further than it has already, “ Mr Reilly said.
“Longer term we do need to consider what we manufacture here.”
However, he said a decision on a change on manufacturing product would not be made in the immediate future.
Mr Reilly said, “I would like to make that decision in the next two to three years, not really before that because we also have to know what the long term outlook is for our current products, especially those in export markets, are those markets going to stay with those products or not.”
Questioned about how Australian production of a smaller car would fit in with the company’s current policy of building its smaller cars for the region at GM-DAT in South Korea he said there would not be duplication.
“If we decide that it would be better to build a product in Australia and it’s currently being built in Korea then we won’t be building it in both places.”
Ford Australia is already well underway with plans to begin building about 40,000 Focus models a year in Australia from 2010, about half of which will be exported.
Obvious candidates for local production by GM Holden would be the Barina or Viva models, both current vehicles are Australianised versions of Daewoo cars and neither has been warmly embraced down under.
Barina sales have been in decline to some time as the current vehicle has scored poor safety ratings and does not come up to the standard of the previous European sourced Barina.
Opel, which developed the previous highly-rated versions of the Barina is understood to be developing a two-version car to replace it’s current vehicle, sold in Europe as the Corsa, and one of those versions will be built in the Asia Pacific region.
Mr Reilly certainly seemed to be giving credence to the idea that in the future Australia could produce models, currently built by Daewoo, for both domestic and export markets.
“I think the first thing we would do is look to see what would be good volume down here, what possibly we might be able to export from here as well and we would make a choice on what we were going to do here based in what the market want,” Mr Reilly said.
He said that if that product was already produced in Korea or elsewhere then production would be transferred to Australia, but added, “ it could be something that is not already produced elsewhere.”
Mr Reilly also said that for Australia to maintain a viable car building industry and to export it also needed a supply network that could support the manufacturers.
He said the supply base in Australia had shown weakness in the past (several supply companies have failed or had to be propped up by the manufacturers over the past couple of years) and would need support in the future.
He said suppliers also needed to be able to export if they were to remain strong and he added that GM Holden was prepared to help suppliers develop export markets, or contribute to export programs, if it meant keeping the supply base in Australia strong.
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May 21st, 2008 at 7:18 pm
Now Holden want to keep the “local supply base strong”. Pity they screwed over so many with offshoring components with the VE.
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May 21st, 2008 at 8:27 pm
I can’t really see the point of building small cars here, since (if you believe the manufacturer’s rhetoric) there’s no money in small cars.
If you must run a plant under AU labour conditions, build a high value car, not a low value one. I’m sure the labour input into a $50,000 car is not 5 times a $12,000 car - they both have the same number of doors, steering wheel, wheels, suspension mounting, etc.
At least Holden is thinking not to build here what is already built in Korea.
Ford wants to build 40,000 Focus for export, but they (with Mazda) are also building a Focus plant in Thailand so they can supply Asian markets from Thailand. They want to supply the same car (Focus) to Asian markets from Australia - ????? Just add Aussie labour costs, add freight, and arrive at the Asia distribution centre at $4000 per car dearer. Can’t for the life of me see how that will help profits.
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May 21st, 2008 at 9:15 pm
Couldnt agree more Reckless 1. Why build a small (cheap) car hear with our labour costs, kind of defeats the purpose. the high price of our AU dollar will destory export aswell.
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May 21st, 2008 at 9:16 pm
Do not agree with you realcars - down to pure economics. Stack them high sell em cheap or reduce supply make them well and sell the high. Which one? My vote goes to selling good quality product at a reasonble rate i.e. small/medium sized cars based on the liked euro products but assembled and tweaked to your own style requirements.
How about the next Euro Astra built locally along with the current Euro Corsa (4WD version on the horizon a la Barina).
There is room for Australian production, sharing production of vehicles accross Europe is common and works.
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May 21st, 2008 at 9:20 pm
Good point no name but i dont think people are willing to pay premium for a small car whearing a holden badge. they dont care if its opel derived.
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May 21st, 2008 at 10:00 pm
Wow, Holden may be building crappy Daewoo’s with two star safety ratings right here in Australia. ’m so proud I could puke.
Or what would be better, is if they lose the Viva and the Barina (Kalos) and import the Vauxhall Corsa to take their place. They could price it as per the Viva AND…….. they could win some credibility back because the Corsa is actually a good car.
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May 21st, 2008 at 10:10 pm
Or also the new Vauxhall Agila, which is actually a Suzuki. But it would still be 1 million times better than the Barina, because Suzuki make great little cars. And Holden could price it really well.
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May 21st, 2008 at 10:11 pm
So what your saying JP - you prefer the cheap Deawoo which are killing Holdens name off because people don’t like them. Holden are also struggling to sell there best product the Commie due to the trend in the market for folks buying smaller cars. Come on Toyota nearly sold more corollas last month than Holden did Commies in a 3 month period. Smaller cars are they things that are moving off the shelves.
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May 21st, 2008 at 11:43 pm
In Australia Holden has been dithering in the Four cylinder car market for years so they have failed to establish a reputation in this class as they chop and change from one badge engineered offering to another. Started with Vaxhauls,Opels through to Toyotas and Nissans, Suzukis and now Daewoos.
I think most people just go direct to the preferred supplier than going to Holden for a four cylinder car now. No model continuity and resulting loyalty and the people running the show have to take the rap for their shortsightedness.
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May 22nd, 2008 at 12:19 am
I must agree with Realcars. The continued source swapping is a travesty. Barina and Viva are utter jokes. Captiva less so, especially the MAxx. Oops, I forgot Epica. One does that naturally.
let’s hope they don’t lose Astra. The current model may not have fired as well as the previous model, but I hope they stick with it and its replacement for continuity’s and credibility’s sake.
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May 22nd, 2008 at 1:59 am
The current Holden range looks like a mish mash of everything with no common styling language really. The Korean cars all look cheap and alike - Barina, Viva, Epica, and Captiva; While the Astra and Commodore range look much better, and more like a quality product.
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May 22nd, 2008 at 7:51 am
Really?? so Holden now wants to look at what ford is doing?
Wasn’t Ford questioned by almost everybody about building a small car down under?
Ford’s current focus, made in South Africa will switch to here come 2011 while the South African plant will switch to brand new T5 light truck production.
I like how everybody claims we can’t produce small cars at a profit, why not?
Exports are part of the plan for local focus production and the auto industry in Australia is very different to what is was even 5 years ago.
Things don’t stay the same people.
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May 22nd, 2008 at 8:35 am
There’s a reason why years ago, Toyota switched from local Corolla production to Camry and never turned back. Small cars just were hard to make profitable in Australia.
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May 22nd, 2008 at 8:46 am
JP sorry but your wrong, current holden sales prove people will pay more for a better small car. holden have always rebadged their small cars, but sourcing daewoos!!! cmon any idiot can see how low quality these cars are and thats why they arent selling. after having the really quite good opel sourced barinas to switch to daewoos was a bad idea. in australia holden was seen as a marque that stood for quality and style, but that has gone out the window in the search for profit. when everyone else is brining in small cars that are increasing in quality why would you been a leader in the field bring in sub standard cars??? people arent silly, they will see through the pretty advertising.
im sure holden/GM saw the trend for smaller cars coming. they just got the next step wrong (in australia at least). they assumed that meant people wanted a cheap car (daewoo). id say they are lookign for somethign more practical (price, running costs, size, environment). even americans are downsizing, and look at europe!! with 90%+ people in australia in the major cities you can see why its happening.
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May 22nd, 2008 at 9:26 am
What about a small car designed here for here. Thats what the Commodore is about but Australian tastes have moved to smaller better quality vehicles. With the GM parts bin behind them, I’m sure if Holden had a vehicle based along the lines of the BMW 1 series (a rear drive - drivers car)and priced just below the commodore they they would sell a squillion and possibly open up a new export market. Many thousands of people are snapping up golfs and 3’s etc for commodore money anyway, so why not a Holden? A real Holden and not some mis-badged half-RHD converted pile of sh*te.
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May 22nd, 2008 at 9:45 am
Has switching to Daewoo actually increase Holden’s sales volume? Does any one know if the old Opel Barina was comparable on sales volume to the Daewoo Barina or not?
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May 22nd, 2008 at 10:18 am
Holden has lost more market share (percentage wise) than any other make of the last 2 years.
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May 22nd, 2008 at 10:22 am
JW…
Hello! ford will be exporting focus production, Toyota didn’t export local corolla production, see the difference?
Years ago, the large car market was stronger, see the difference?
It also depends on each individual car makers plans on where they produce and seemble vehicles around the world.
Shall i keep repeating until some understand?
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May 22nd, 2008 at 11:02 am
Reckless1, the Focus will be exported to the markets currently serviced by South African production. It’s a shift in production to better balance manufacturing capacities around the globe. Which measn that Aus manufacturing facillities can operate at a greater volume and therefore, efficiency. Thats why toyota does camry in Aus, because they have maximised production volume & efficiencies, based on model mix.
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May 22nd, 2008 at 11:02 am
Bret…
yay, someone understands!
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May 22nd, 2008 at 1:09 pm
By the end of 2009, when the decision about the current schedule of tariff reduction from 10% to 5% in 2010 is either confirmed or varied, Holden will have to decide whether they will stay in Australia or pack up and leave. I think sales of large cars will plunge as petrol has hit $1.629 a litre and people start thinking about petrol at $2 a litre.
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May 22nd, 2008 at 1:10 pm
I had an Opel Barina and it was great, had almost 200000kms on it and it never went wrong. Quality was pretty good too. Would be nice to see them bring quality back to their low-end range.
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May 22nd, 2008 at 1:20 pm
Tony…
As has been mentioned many times, fuel prices aren’t the bullet in the hearts of falcon and commodore. These 2 are actually on par with many vehicles for fuel consumption.
Buyer tatses have changed more specifically.
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May 22nd, 2008 at 1:39 pm
Adam, you are right about “buyer tastes”; but more people will consider fuel consumption of Commodore at 10.9 litres per 100km (higher for city cycle) against 8.8 for Mazda 6 and 7.4 for Corolla now that fuel is more expensive.
I could be wrong, but the 4 speed auto in Commodore makes for higher fuel consumption.
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May 22nd, 2008 at 1:46 pm
Tony…
The 10.9l/100klm figure is combined city/highway for the 4 speed auto, Fg falcon is 10.5l/100klm and 10.1l/100klm for 6 speed auto.
Remember the Mazda 6 takes premium unleaded fuel, not standard.
I agree in general about fuel consumption but remember to look at the top 10 sellers and the market has fragmented.
A rav-4, CRV, X-trail 4cyl models aren’t much better for fuel use, while a V6 aurion, camry and V6 rav-4 are the same.
Those 2 vehicles are simply no the two top seling vehicles any longer, perceptions play a big part in the fuel consumption story.
Fuel consumption isn’t the most expensive aspect of vehicle ownership also.
The reality is people are still buying gas guzzlers, just a different breed is all.
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May 22nd, 2008 at 1:52 pm
Adam, what is your take on the fact that further up the Commodore range, with the higher spec engine and 5 speed auto the consumption goes UP to 11.3 ???
Falcon G6E: 10.1 L/100km
Calais: 11.3 L/100km
Thats almost $2 extra for every 100km for the Calais. (or nearly $500 a year, every year)
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May 22nd, 2008 at 2:59 pm
Bret…
I find it odd also that the 5speed auto Ve’s take more fuel than the 4speed versions.
The 5 speed autos have the more powerful HF V6, maybe that has something to do with it??
All i know is FG is considerably more fuel efficient than VE’s particuarly the 6 speed auto falcons.
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May 22nd, 2008 at 4:30 pm
The 5speed autos in the SV6 and Calais V6 have the higher output engine (190 kw). The Omega and Berlina have the 4speed auto have the (175 kw).So naturally the SV6 and calais will use more fuel. Also the Sv6 and Calais are meant to use PULP.
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May 22nd, 2008 at 4:39 pm
Well not naturally. FG’s 6 cylinger drivetrains carry a heavier body, are bigger and more powerful yet use less fuel then the VE’s 6 cylinger drivetrains!
Holden’s 5 speed high outout V6s shouldn’t use more fuel than the 4 speed auto versions based on higher power alone.
I do believe the calais and SV6s are heavier than the base omega, then again higher spec FG’s are heavier than base model XT also.
Holden needs a base 5 speed and higher end 6 speed in it’s V6s NOW.
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May 22nd, 2008 at 7:31 pm
crazychook Says:
May 22nd, 2008 at 4:30 pm
The 5speed autos in the SV6 and Calais V6 have the higher output engine (190 kw). The Omega and Berlina have the 4speed auto have the (175 kw).So naturally the SV6 and calais will use more fuel. Also the Sv6 and Calais are meant to use PULP.
Crazychook, the SV6 and V6 Calais has a 195kW engine as standard not 190kW! And the base-line Omega has 180kW not 175kW Crazychook!
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May 22nd, 2008 at 11:38 pm
Sorry Duck. Your right about the output. I quote the omega 175 kw, but thats on LPG. The SV6 and Calais I was quoted as 190 kw is the VZ outputs.
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May 22nd, 2008 at 11:50 pm
Adam
The Fords drive train is heavier than the previous model and so are the engines. However the overall weight is comparable to the VE range. The SV6 and Calais are heavier:
Omega 1690kg
SV6 1735kg
Calais 1750kg
Calais v 1780kg
so perhaps this is why they use more fuel as well as having move power than the Omega alone.
The Ford base model XT use a 4 speed and is similar weight (1704 kg) as the omega, but has a better fuel economy.
Is it because of the Ford 4 speed has different ratio setup?
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May 23rd, 2008 at 1:09 pm
Chooky,
The XT Falcon cames standard with a 5 speed auto.
The fact that clearly the falcon engine/driveline is more efficient than Commodore is not the issue.
The higher spec holden engine, producing more power, is obviously not tuned for economy but more power. What would be the result if holden put their 5 speed auto into the omega, with the lower tune engine?
And BTW I think that FG engines are actually lighter than BF engines - Ford mention lightweight materials for ancillaries.
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