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No Holden back for US exports
Chevrolet Caprice police car to form basis of Holden’s single biggest export deal
6 Oct 2009
THE simultaneous unveiling of GM Holden’s Chevrolet-badged Caprice Police Patrol Vehicle (PPV) in the US and Australia marks the first official step in what looks set to become Holden’s largest single export deal.
Due to go into production in Adelaide in the final quarter of next year, soon after Holden starts building the small Cruze sedan and hatchback, the Caprice PPV will hit US streets in early 2011 and could lead to further body derivatives and even a civilian version.
Speaking from the long-wheelbase Caprice PPV’s debut at the 116th annual conference of the International Association of Chiefs of Police (IACP) in Denver, Colorado, Holden chairman and managing director Alan Batey told GoAuto the Statesman-based Caprice PPV was a best-in-class car that was expected to be the dominant player in a US police car market that attracts annual sales of up to 80,000 vehicles.
The new Holden chief said the Australian-built model, developed specifically for US law enforcement agencies after the demise of Holden’s Commodore-based Pontiac G8 export program earlier this year, received an outstanding response from North America’s leading police vehicle fleet customers.
“The response has been absolutely fantastic – the car has been brilliantly received and we are delighted,” said Mr Batey, who this week will meet executives from North America’s three largest police forces in Los Angles, New York and Chicago.
“We revealed the car today and confirmed we’ll be bringing in the vehicle to the US at the beginning of 2011, although we start production in the fourth quarter of next year – just after the localised Cruze,” he said.
Left: The Chevrolet Caprice Police Patrol Vehicle. Below: GM Holden chairman and managing director Alan Batey.
Shown as a concept in Denver, the production Caprice PPV will be available to order by individual US police departments, via a dedicated General Motors police vehicle division based in Detroit, for delivery in early 2011.
Mr Batey said that although some of the smaller US police departments combined forces to procure their vehicles, larger agencies like the LAPD offered their own separate vehicle contracts, for which GM will tender directly.
“The way it works is that we’ve got a dedicated team out of Detroit that will be the interface and do all the customer-facing stuff. We’ll be in the backroom, making sure we provide the vehicle and all the support they need,” he said.
Holden’s PPV will compete for US police vehicle business with Chrysler’s existing Charger sedan-based patrol vehicle, as well as a new entrant in Ford’s redesigned front and all-wheel drive Taurus.
The latter will effectively replace the Blue Oval’s long-running Crown Victoria, which is larger than the Caprice PPV and due to cease production at the end of next year – just as Holden starts PPV production.
Holden shipped about 36,500 Pontiac G8 vehicles to US in 2008, which represents about half the potential annualised US police vehicle fleet.
Holden exported a record 60,518 vehicles in 2005 and its largest single export market is the Middle East, which received a best figure of 23,542 Holden-built Chevrolet Lumina and Caprice sedans in 2007. But Middle East exports have since shrunk to about 10,000 annual sales.
The Caprice PPV concept is based on the left-hand-drive long-wheelbase police vehicle of the same name sold in Abu Dhabi, the capital of the United Arab Emirates. GoAuto understands the production car will gain a slightly longer front bumper designed to accommodate a nudge bar.
Mr Batey would not reveal specific export sales targets for the police Caprice, which will also be marketed as an emergency response vehicle, but indicated it was expected to attract the lion’s share of an annual market of about 70,000 vehicles.
“The segment where we’ll play is probably worth 70,000 units a year annualised,” he said. “I wouldn’t like to put a number on it but … we’ve got a team out of Detroit that will actually be going to market – we’re just the suppliers of the vehicle within the GM family.
“They are extremely optimistic and bullish that this vehicle can really do a great job and the other players are relatively small, so we haven’t sold one yet or got an order for one yet but as I say the segment’s worth about 70,000, so that’s sizeable.
“Clearly we’re going to be here with the power of Chevrolet and the contacts and relationships they have with the police forces. I saw people coming on to the stand today saying to the GM guys ‘what you’ve delivered is exactly what we’ve been asking for’, so a lot of people are very excited.
“There are two or three players in it and although it’s too early to speculate I think it’s fair to say that it’s a sizeable segment we’ll be able to have a go at with a vehicle that frankly from everything I’ve seen will set a new standard.
“We’ve effectively three competitors and with a segment as big as that it looks pretty good to me. Getting the okay and the confirmation that it’s an absolutely definite program was important because we didn’t want to show what might happen – we announced today that the vehicle is going to come,” he said.
Holden marketing director John Elsworth said at the Australian launch of the Caprice PPV that Holden’s viability as a local car-maker did not depend on the Caprice PPV export deal, and that the reinstatement of the second shift at its Elizabeth assembly plant would depend on sales of both the Cruze and PPV.
“Any volume is fantastic,” he said. “We are not reliant on this volume to be a viable manufacturer.
“If it is thousands we can continue with one shift. If it is tens of thousands we might have to look at the shift structure.”
Mr Batey said the Caprice PPV would be the most attractive vehicle available to US law enforcement agencies next year, thanks to a development program that began 12 months ago.
Changes include specific front seats, a full width and height rear occupant barrier with curtain airbags that don’t extend to the rear passenger cell, and a specialised in-dash touch-screen developed by Port Melbourne company National Safety Agency.
Mr Batey said: “The long-wheelbase that we’ve got is slightly shorter than the Crown Victoria, which has been the vehicle that has dominated the segment but is going out of production in the same time frame as we’ll be launching.
“But although the external dimensions are slightly smaller, from an internal perspective we offer more space – particularly in the rear, which has been a criticism of the police forces.
“We’ve been working on this for quite a time, making sure that we really understand the customer needs, and I think when we showed them the first concept today and they saw some of the innovations like the seating and the rear barrier, you could clearly see them thinking ‘you guys have actually thought this through and you have a very good vehicle here’.
“The police forces are really excited that this is going to be a police-only application because it really gives them a point of difference, particularly when we showed them some of things we’re going to be able to provide them with.
“I really think that we tick all of the boxes. It’s a little bit like large cars in Australia – there are three or four players, unlike small cars where you’ve got 15 or so players, so clearly the opportunity is there, based on how good the car is and how well it meets their requirements.” Mr Batey said that although the US police vehicle export program currently includes only the long-wheelbase Caprice PPV, he said the possibility exists to add further models if required – including the Commodore-based short-wheelbase sedan, ute and even wagon.
The Caprice PPV, which will compliment existing Chevrolet police vehicles such as the Tahoe and Impala sedan, will be exported initially only as a V8, with direct-injection SIDI petrol V6 versions to follow within 12 months.
“We made a decision to initially only to do the long (wheelbase) because it meets from all the feedback we’ve had all the police requirements,” he said.
“At the moment nothing is in the plan apart from the long-wheelbase, but I wouldn’t say anything is out of bounds if we had a real demand for it.
“Interestingly enough, I brought over a few pictures of the (Commodore Ute-based) divisional van (employed by the Victorian police) which received some enthusiastic responses.
“It’s upon ourselves really – get this vehicle launched through Chevrolet, do it really well, then look at all the capability we’ve got and if it meets the police needs then obviously we’ll look at it and see if there’s a business case. But at the moment we’re focussed on the LWB.”
Asked at the Port Melbourne reveal of the Chevrolet PPV if there was also potential for a civilian version of the vehicle, Mr Elsworth said: “We will wait to hear from the GM people in America on that.
“I’m not going to lie to you. It is a fantastic opportunity. It is very much an entree into the market and if there is upside and it allows us to create a model they want to sell as a Chevrolet (for sale to the US public) then they will determine that.
“They determine that based on their needs as the custodian of the Chevrolet brand. No one would shut the door like that, that’s silly. They just haven’t determined whether there is an opportunity or not.
“The Caprice is a unique product. As a big rear-wheel-drive car with plenty of boot space and plenty of rear legroom and a high-performance engine, there is not really a car anywhere in the world that has all that.”
Mr Batey said that although much of the Caprice PPV’s specialised technology was developed by NSA, Holden would compete for US police business separately to NSA, via GM, with specific vehicle fit-out of non-NSA equipment to take place in the US.
NSA also used the Denver trade show to display its wares in the same short-wheelbase Commodore-based Pontiac G8 police vehicle that was launched by LAPD deputy chief Charles Beck at the 2009 APCO Australasia Conference & Exhibition, held at the Australian Technology Park in Sydney over March 2-4.
“All of NSA’s equipment and most importantly their touch-screen that fits into the centre console, will fit into the LWB vehicle, so all of the NSA equipment is interchangeable.
“But an important point is that although we’re obviously working very closely with NSA, we can sell our vehicle with NSA’s equipment or without it, depending on what the police requirements are.
“And I’ve got to say the feedback I’ve got today is that they all do have slightly different requirements. It’s not one size fits all – every jurisdiction does slightly their own thing, so we’re going to have to be pretty flexible there.
“The Chevrolet team have got a whole raft of aftermarket set-up guys that specialise in that sort of business – from light-bars to computer equipment. They can customise the vehicle to any force’s requirement basically.
“I think it will be a mixture (of both specialised equipment from GM and NSA), but NSA are the only people here I’ve seen that have that type of technology. There was one other but they were really expensive – about $60,000 just for the equipment. There is a lot of technology here but nothing that really matches theirs from a full integration point of view.
“The NSA have been working very closely with the LAPD, and have a fantastic relationship with them, so they are on the real leading edge of technology. Everything they’ve done has been backed by a lot of research, some with help from Monash. They’ve done a fantastic job, so I think the NSA will do very well here.
“But I’m also realistic enough to know that it won’t be for everybody. A lot of the equipment the police forces use is different from one vehicle to the next.”
Mr Batey said the Caprice PPV was created entirely by Holden with GM’s official sanction – without assistance from the Australian government. In fact, he said Holden’s and Australia’s involvement in the program was a sensitive issue, given the potential public and union resistance to a fully imported police vehicle.
“There is some sensitivity around the car being Australian and we’re mindful of that,” he said.
“They (GM) have really taken that to heart here and so they’ve made sure that everyone understands that this is not about Holden, this is about the fact that Chevrolet has selected the best vehicle available to them from their portfolio and executed a police car that will be best in class.
“We are a wholly owned subsidiary of an American company and as you know we import engines and we export and import a lot of material that comes from there as well,” he said.
Co-incidentally, on the same day that GM and Holden revealed the Caprice PPV, federal industry minister issued a statement from Detroit, during a whirlwind tour of an Australian trade delegation to Europe and the US, where he visited the parent companies of Holden and Ford Australia.
“The law enforcement market in the United States is huge, with annual sales of around 80,000 vehicles a year,” said Senator Carr. “Even a small proportion of the total could translate to a significant boost to Holden’s export sales.
“But we understand the competition will be very tough, as will be the procurement regime. We wish GMH the best in pursuing this deal.
“Due to no fault of its own, the G8 program had to be suspended when General Motors in the US went into bankruptcy. Now the Caprice has the opportunity to build on the excellent reputation the G8 had developed in the US,” he said.
Mr Batey said that although Holden would not reap the rewards of the Chevrolet police export program or local production of the Cruze until 2011, the company had already emerged from the depths of the global financial crisis.
“We’re starting to see things recover,” he said. “We were short of cars last month, but despite that still achieved a 12.5 per cent market share.
“Dealer inventories were down to a level at the end of the month that we haven’t seen in a decade, so we’ve got a lot of demand out there and we’ll have a very strong back-end to the year as we start to build our inventory with MY10 (Commodore) now up and running.
“We are coming off the back of a global financial crisis so we shouldn’t get ahead of ourselves. This is a once in a lifetime circumstance and it will take some time to recover, but this announcement is a real step in the right direction.
“The year after next is when things will really start to move, with a full year of localised Cruze and this export program ramping up throughout the year,” he said.
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