Local Cruze to join new Holden hatch
BY BYRON MATHIOUDAKIS | 19th May 2009
Holden is now concentrating on building the Cruze brand, foregoing crucial hatch sales volume in Australia’s biggest market segment with the lack of a C-segment (small) hatchback in its range until Australian production commences.
Imports of the South Korean-sourced JF Viva have ceased, while shipments of the AH Astra out of Europe have been suspended and are under review at Holden. Astra imports are unlikely to recommence in the face of a weak Australian dollar against the Euro, among other reasons.
“There will be a hatchback version of our small car,” GM Holden chairman and managing director Mark Reuss revealed this week in Melbourne, confirming GoAuto’s investigative report published last month.
He also confirmed that the Australian-designed small car would have different sheetmetal to the Cruze sedan, even though they will share GM’s Delta II architecture.
Furthermore, GoAuto can reveal that Holden will cease importing the Cruze sedan from Korea towards the end of next year and instead build it alongside the hatch at its assembly plant in Elizabeth, South Australia. A Holden source confirmed the dual-model production plan this week.
In late March, federal industry minister Kim Carr revealed to GoAuto that Holden planned to build a family of small vehicles off GM’s first truly global compact-car platform, which was essential to the Australian manufacturer’s survival.
“The new Delta opens up into about five different streams in its later phases,” senator Carr said. “To get it up in a period like this, when General Motors internationally is facing such acute questions, is remarkable … It made the difference between General Motors (Holden) being viable and non-viable.”As well as building the hatch and sedan, GoAuto sources indicate that Holden could build the all-new Astra revealed in Europe last week, the Chevrolet Orlando seven-seat people-mover and, eventually, the Phase II version of GM’s groundbreaking Volt plug-in hybrid.
A wagon version of the Cruze is also expected, while potential exists for a two-door coupe/convertible and a compact SUV.
Mr Reuss said this week that Holden was striving to achieve between 25 and 30 per cent local content in the upcoming hatch, making it the most Australian GM small car since the Family II-engined LD Astra (twin to the N13 Pulsar built by Nissan Australia in Victoria) ceased production in 1989.
However, while Mr Reuss admitted that the next-generation Astra will feature a different (and probably more costly and complex) rear suspension system compared to the relatively simple and inexpensive torsion beam set-up developed for the Cruze, he refused to divulge if the Australian hatchback will follow its European Astra cousin.
Both the Cruze and the next-generation Astra use General Motors’ Delta II architecture, but there are key differences to reflect their different price positioning.
Keeping a lid on costs may be one of the key drivers in Holden gaining export markets for its Australian-built baby.
“I think there could be (export potential for the small car) … yes, absolutely,” Mr Reuss said.
Asked if this could include supplying British affiliate Vauxhall with a Cruze derivative – as widely anticipated in light of GM’s move to consider selling its European and British operations – the Holden chief said: “I haven’t thought out that far … but anything we do … there are right-hand markets (we could look at) … like South Africa, or Thailand.
“Those are the sort of natural places that we could look at to have some sort of export business with our right-hand drive small car.”Holden is keeping the Australian-built small car’s name close to its corporate chest, but the Lion brand is expected to extend the Cruze badge to the hatch as it seeks to streamline and simplify costs and minimise consumer confusion.
The new Cruze sedan effectively ends almost 13 consecutive years of Astra nomenclature in Australia – or 25 years if you add the Nissan N12 and N13-based model built and sold in Australia for Holden over a five-year period from 1984.
GM Holden executive director of sales, marketing and aftersales Alan Batey told GoAuto this week that the company was putting all available resources behind the Cruze after suspending imports of the AH Astra for the time being.
“We said, ‘Let’s put all our efforts in the Cruze because that is where the market is’,” he said, adding that it does not make good business sense to have too many names in the same market segment.
“The more proliferation of nameplates you have, the more difficult it is … Consistency counts for a lot.”Asked if the Astra should be considered dead in Australia if the Australian dollar did not improve against the euro, Mr Batey was blunt: “If the (economic) environment remains the same, then yes,” he said.
“That car (the AH Astra) was going to come in absolutely north of $25,000. And it is a buyer’s market – very price sensitive, and there are a lot of bargains out there. It is economics.”Mr Reuss put it more succinctly: “It’s pretty tough to make money on (the Astra) at the moment.”However, there is still plenty of 2008-built AH Astra stock, with supplies expected to last into the second half of this year.
“At the moment, our dealers are not ordering any cars. We have availability across the board – you can still get wagons, you can still get TwinTops, you can still get Coupes, you can still get hatchbacks,” Mr Batey said.
“That inventory will probably start to whittle away towards the end of next month, and by that time we will have launched Cruze, and we will keep an eye out on what is happening.”
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