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GM exec hints at smaller car to replace Commodore

Large question: GM International Operations president Tim Lee has hinted that Holden's Elizabeth plant is likely to produce another smaller car instead of the Commodore post-2020.

Downsizing trend top of mind at GM as it mulls future of Holden production

22 Feb 2012

THE General Motors vice president responsible for GM Holden has hinted that the American giant is looking to produce a smaller car than the current Commodore at its Australian plant at Elizabeth once the next-generation 2014 VF Commodore comes to the end of its life later this decade.

GM International Operations president Tim Lee – effectively boss of Holden chairman and managing director Mike Devereux – has told The Australian Financial Review that Holden had to move with the “vehicle requirements and buying patterns of the 21st century”.

“It’s (Commodore) still an outstanding motor vehicle and one that we intend to produce for a long time,” he reportedly said. “But if you look at the motorway here in Melbourne, you see a lot of small cars. You see a lot of more fuel-efficient vehicles on the roads than Commodore.

“The fundamental key in the car-building business is basically how you configure your body shop, and if we want to have the opportunity for both domestic and consumption, as well as export potential, we need to build cars in Adelaide that are off the global platforms of General Motors.

“In the body shop the best way to do that is to have flexibility and to build two architectures and platforms. Maybe a mini car and a small car or maybe a small car and a compact car, or maybe a compact car and mid-sized car.”

 center imageLeft: GM International Operations president Tim Lee. Below: Cruze, sedan and hatch and Malibu.

Mr Lee, who is based in China, was speaking in Australia while on a flying visit to meet with Holden staff Melbourne, see the still-secret new VF Commodore and then talk with prime minister Julia Gillard and Labor government ministers in Canberra.

GM and the federal government are locked in discussions about GM’s request for Australian government co-investment in future products to be made in Australia, which GM says is essential for the future of Australian automotive manufacturing in a low-tariff market environment.

Mr Lee’s comments come a day after Holden’s Mike Devereux told GoAuto that a decision on a potential deal on co-investment should be known within weeks.

Mr Devereux also told GoAuto that when the announcement came, it would not include details of any future cars to be made in Australia, nor the size of GM’s own financial commitment, which would remain secret.

GM’s general direction towards smaller and more efficient cars was underscored by Mr Devereux’s comment to GoAuto on Wednesday that it was inconceivable that GM could consume the entire output of four V6 engine plants around the world – including the Holden Engine Operations factory in Port Melbourne – in future.

He indicated that Holden would have to address the future of the plant and whether it moved away from large V6 engines to something else.

Currently, the engine plant is running steadily at about 40 per cent of its 240,000-unit capacity, thanks to exports to affiliates in China and South Korea.

The Elizabeth plant currently produces the Commodore large car and derivatives, such as the Caprice and American-targeted Chevrolet Police Patrol Vehicle (PPV), and the Cruze small car, in its sedan and five-door hatchback forms for local consumption.

The writing has been on the wall for Commodore for some time, steadily losing volume and market share in its 15-year reign as Australia’s top-selling vehicle, and finally losing that crown to the Mazda3 small car last year.

In January, the Cruze outsold its bigger sibling for the first time.

Mr Devereux candidly said at this week’s Commodore LPG powertrain launch that Commodore might never regain the crown in the changing market environment, and that no Australian car was likely to achieve the 90,000-unit levels of the Commdore at its peak.

The most probable outcome for Elizabeth plant is that a new-generation Cruze small car will go into production there in about 2016 alongside the new VF Commodore that is expected to hit the market as a 2014 model.

Then, all being well with the current negotiations with the federal government and prevailing economic conditions in the next few years, the Commodore will be replaced by a new vehicle built on a GM global platform.

As Mr Lee hinted, that car could be bigger than Cruze – such as the Camry-sized Malibu that is due in Australian next year from South Korea – or smaller, such as the Barina or Barina Spark light cars that also are currently imported from GM Korea.

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