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GM Holden confirms small car production

GM-Holden has confirmed the most rumoured decision in the Australian automotive industry, that it will follow the lead of rival Ford and build a small car in Australia.
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GM Holden Chairman and Managing Director, Mark Reuss, made the announcement at a press conference today and said the new vehicle would begin production in the third quarter of 2010, with both Federal and South Australian Government financial assistance.

The vehicle, which will be built on the GM global platform know as Delta will be built in the Elizabeth, South Australia, manufacturing plant, alongside the current Commodore.

The plant currently builds the Commodore, including export versions which are sold as Chevrolets in the Middle East predominantly, and in the United States where they are marked as Pontiacs. It previously also built an earlier version of the Vectra.

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It would appear that the project will not add jobs to the South Australian workforce as Mr Reuss said the program would require 500 to 600 existing employees at Elizabeth and is estimated to provide 500 to 600 local supplier positions.

The vehicle, based on General Motors’ global Delta small car platform and feature new technologies to increase fuel efficiency and reduce greenhouse emissions.

The new front-wheel-drive vehicle will be built as a sedan and hatch and design and engineering work will take place at the company’s headquarters in Port Melbourne, Victoria.

Mr Reuss said start-stop hybrid technology and capacity to run on alternative fuels such as E85, diesel, LPG and Compressed Natural Gas (CNG) are all being considered for the vehicle’s development.

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It will be GM Holden’s first locally produced car beyond its current range of larger vehicles since the Asian economic crisis ended Vectra production in 1998.

The vehicle will be built in the south bodyshop of the Elizabeth facility, which was previously used for the Vectra assembly in the late 1990s.

Mr Reuss said the announcement provided an opportunity to take a leading role in developing alternative fuel and fuel saving technologies in Australia for Australians.

Mr Reuss said the program would be a major contributor to the economy, generating an estimated $70 million to $80 million in wages and $30 million in research and development.

“Together with Government, we are extending the scope and consumer appeal of our local manufacturing efforts,” Mr Reuss said.

“We have been building Holden cars to suit the needs of Australian motorists for 60 years and these plans build on that tradition.

“We recognise the needs and desires of motorists are evolving with growing concern around environmental factors and shifting consumer sentiment.

“Such evolution calls for an innovative approach to complement our current offering.

“Just as our leading Commodore range will continue to undergo technological development, this new vehicle will cater for growing demand for smaller cars focused on economy.

“We are planning for the future to produce a wider range of cars in Australia to cater for a variety of driving needs.”

He added that flexible manufacturing infrastructure would be introduced to the Elizabeth plant to make it capable of producing a series of GM global vehicles in years to come.

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It also provides opportunity to develop an export program for the vehicle, particularly to other right hand drive markets around the world.

Mr Reuss paid tribute to the Federal and South Australian Governments for their ongoing commitment to the Australian automotive industry.

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"The Rudd Government’s Green Car Innovation Fund has provided opportunity to turn our plans into reality,” Mr Reuss said.

“This announcement complements the vision we share with the Government of reducing Australia’s dependence on foreign oil and making motoring better for the environment.

“It demonstrates commitment to an Australian automotive industry which extends beyond manufacturing at GM Holden to thousands of suppliers and dealers across the country.

“That demonstration was clearly seen by our parent company in its decision to support this program.

“The support of the Federal and South Australian Governments in securing this program recognises the fundamental role which automotive manufacturing makes to national and state economies."

GM Group Vice President and Asia Pacific President, Nick Reilly, today added his support to the program as proof of GM’s capacity to innovate across the region.

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“This announcement recognises the ability of GM, GM Holden and the Australian automotive industry to see the future and move in the right direction,” Mr Reilly said.

Holden isn’t giving a lot away about the exact detail of the new vehicle, unlike Ford, which is well advanced with planning to build the next generation Ford Focus in Melbourne from 2011.

The new small, front-wheel-drive, four-cylinder vehicle to be built by GM Holden at Elizabeth will be based on General Motors’ global Delta small car architecture.

Other examples of the architecture will include the next generation Chevrolet Cruze and Opel, Vauxhall and Saturn Astra.

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The architecture was primarily developed by GM Europe in Russelsheim, Germany for GM markets around the world.

Local design and engineering work on the Australian vehicle will take place at GM Holden’s Port Melbourne headquarters in Victoria.

Direct injected petrol and diesel variants of the vehicle will be produced with GM Holden considering a range of alternative fuel or fuel saving technologies including E85, LPG, CNG and start-stop hybrid capability.

Further details about the vehicle including its nameplate, design specifications and pricing will be determined closer to the time of production.