Magnus could become Holden Vectra

HOLDEN is considering yet another GM Daewoo-sourced car for the Australian market – this time to replace the Vectra.

Holden chairman and managing director Denny Mooney, told GoAuto in Korea last week he thought the Daewoo Magnus, a four-cylinder and six-cylinder car which sits above the Daewoo Lacetti (Holden Viva), would drive more sales for Holden in the medium-car market than the Belgium-built Vectra.

"We only do 3500 Vectras a year," he said.

An all-new Magnus is due to be launched in Korea in November. This is the car under consideration for Australia.

The current Magnus is front-wheel drive and available in Korea with a 2.0-litre or 2.5-litre straight-six Daewoo engine, or a Holden-built Family II 2.0-litre four-cylinder engine.

The new model is expected to be powered by the 2.5-litre straight-six, a version of the Family II four-cylinder and a new 2.0-litre diesel engine based on an MV Motori design being built in a new GM Daewoo engine plant recently commissioned in South Korea.

But work is also under way to marry a 2.8-litre V6 version of Holden’s Melbourne-built Alloytec engine with the Magnus.

Alloytec V6 engines with front-drive transaxles were undergoing tests in the GM Daewoo engine laboratories in Seoul last week, but this development work will not be completed in time for the November launch of the new model.

The plan is to introduce the V6 into a later version.

Holden is said to be considering importing Magnus with both a six-cylinder and four-cylinder petrol engine.

The company believes the Toyota strategy of having both four- and six-cylinder versions of the Camry is working and that it will give the Magnus a foot in both camps within the medium-car market.

Holden says that some large fleets prefer to run a mix of six-cylinder and four-cylinder cars, and that having both engines in the Magnus for Australia would boost its sales prospects.

Mr Mooney, who sits on the board of GM Daewoo (which is 43 per cent owned by Holden), sees the Korean company as a source of competitively priced Holdens right across the range below Commodore.

He is also keen to see that Holden pulls its weight in selling Daewoo product in Australia after pulling the pin on the separate Daewoo network Down Under.

GoAuto understands that there were strong feelings within the GM Daewoo board about closing the Australian operation of Daewoo and that Mr Mooney had to convince president and CEO Nick Reilly and the board members representing Korean investors that it was the right course of action.

But Mr Mooney is confi dent the Magnus – a nameplate not destined for Australia – will be a strong entrant with its two engines and that it will be more than a match in size for the likes of the Subaru Liberty.

Vectra sales have fallen in Australia because the latest model has become a premium-priced car in its class. In Europe, car-makers are chasing sales in small- and medium-sized cars by making the cars more luxurious.

Indeed, GM’s European arm Opel demonstrated this last week with the release of its updated Vectra, which among its changes are higher quality materials and soft-touch dashboard plastics in the cabin.

From Holden’s perspective, the additional equipment and cost built into the Vectra inflates the source cost, making it hard for the Australian company to make the car appealing in any sort of numbers against Korean- and Japanese-sourced vehicles.