Holden confirms Cruze delay

HOLDEN has confirmed it will not introduce its all-important locally produced Cruze small car this year as planned, pushing back the launch by six months.

The company had originally planned to introduce the sedan in the third quarter of 2010, but said it always planned to introduce the hatch next March.

Now Holden has admitted that both vehicles will not hit showrooms until next March.

GM Holden chairman and managing director Alan Batey told GoAuto that it was just too hard to launch the local sedan before the hatch.

“We would have to run out the imported car and introduce the new one, then we would have Christmas, so we train people up and then we go on holiday then they come back and we have these things going on,” Mr Batey said.

“We thought, this just doesn’t make sense let’s train the people up, let’s get Christmas out of the way, get them back and close the gap between the four (door) and the five (door).”

When asked why the decision to release both cars at the same time wasn’t made earlier, Mr Batey indicated other factors influenced the decision.

“The car went off better than we expected, so we are outselling our forecast. And secondly we have other programs, such as the (export) police car program coming, so for engineering resources we have other things we are trying to do.”

Left: A sketch of Holden's Cruze small car. Below: Holden chairman and managing director Alan Batey.

It is unclear if the Australian Cruze models will feature the basic torsion beam rear suspension of the South Korean sedan currently on sale or be upgraded with the more complex Watts Z-link rear suspension that is standard on the US production version of the car.

Asked if the Australian car would get the premium rear suspension, Mr Batey said: “It is a possibility, but we haven’t actually announced what we are going to do with that.”

Mr Batey did not reveal whether a decision had been made and said Holden could decide quite late which way it would head, because the Cruze was a “plug-and-play” design which made for easy component switch-over. Both suspension units would be imported.

The deciding factor is likely to be cost and whether customers of such a vehicle are willing to pay more for better ride and handling. Mr Batey seems unconvinced this is the case.

“It (the Watts Z-link) is more expensive, but it isn’t just about cost but about customer value. What does the customer get from it? Does he understand what he is getting from it?” he said.

“I wouldn’t jump to a conclusion that we will definitely do it.” Mr Batey confirmed a 1.4 turbocharged four-cylinder petrol engine would be added to Cruze range soon after the March launch.

He added that the premium engine, which produces 103kW 200Nm in US form, would be sold alongside the naturally aspirated 1.8-litre petrol four-cylinder currently available in the imported Cruze (104kW/176Nm).

Mr Batey confirmed that the Australian-produced Cruze would contain 70 per cent imported components.

The remaining 30 per cent of locally made components such as the body panels, bumpers and fuel tank.

The local content would hopefully increase in time, said Mr Batey, but only if it made financial sense.

“We would like to localise as much of the car as possible because you get quicker response times and much more flexibility, but it all has to stack up,” he said.

Strong global demand for the Cruze could open up the opportunity for Holden to export some of its production. Mr Batey met with newly installed General Motors international operations president Tim Lee in Detroit to discuss the opportunity and will now put together a business case.

He told GoAuto that it was too early to discuss the detail of the plan when asked about which markets the Australian Cruze could be sent to.

“If we were to do it quickly we would need right-hand drive, so the UK is natural market, South Africa is another one, Thailand is a potential market with a free-trade agreement, but that discussion (with Mr Lee) only happened this morning. It is too early to say whether we will do an export program on Cruze,” Mr Batey said.

Then there is the prospect of left-hand drive exports.

“We haven’t even looked at the possibility right now,” Mr Batey said.

“If the demand continues the way it is, we will do a desktop study of what it would cost to install capacity (for left-hand-drive) and whether it would make sense.”