Holden eco-project waits in green grant queue

A PROJECT to reduce the environmental impact of Australia’s top-selling car, the Holden Commodore, is in limbo, awaiting approval for a slice of remnant funds from the recently killed Green Car Innovation Fund (GCIF).

The application for a grant was submitted to Canberra before the Gillard government lowered the boom on the fund late last month to divert more than $400 million to flood disaster reconstruction – a move that angered the local motor industry.

A proposal to put a fuel-saving automotive component into production at Nissan Motor Company’s casting plant at Dandenong, in Victoria, is also in the queue for grant consideration.

Innovation and industry minister Kim Carr revealed to GoAuto last Friday that his department still had $130 million to allocate in grants towards a number of projects in the fund pipeline.

Holden’s application for funds under the GFIC program was revealed to GoAuto by GM Holden chairman and managing director Mike Devereux who, as president of the Federal Chamber of Automotive Industries, wrote to prime minister Julia Gillard recently expressing the industry’s disappointment at the axing of the GCIF.

Although Mr Devereux declined to reveal the nature of the Holden application, he said the project was “a reasonable size, but not Cruze size”, referring to the $149 million grant approved by the government for development of the local Cruze small car that is set to go into full production at Holden’s Elizabeth plant in South Australia within days.

Top: Nissan casting plant in Dandenong, Victoria. Bottom: Innovation and industry minister Kim Carr addresses a crowd at the EV Engineering launch in Melbourne last week.

That grant was the biggest approved under the scheme. Other Tier 1 grants include $42 million to Ford (for the EcoBoost Falcon) and $35 million to Toyota (for Camry Hybrid).

Mr Devereux also declined to speculate on the chances of the application’s success, saying only: “I think it is a very good application.” GoAuto understands the new application involves Holden’s other locally produced car, the Commodore.

As GFIC grants relate directly to projects to reduce both fuel consumption and CO2 emissions, the Holden project might involve alternative fuels – such as direct-injection LPG, diesel or compressed natural gas (CNG) – or research on ways to reduce weight, which is known in car industry jargon as “light-weighting”.

Holden is known to be keen to slice the weight of the next-generation Commodore to help improve fuel efficiency and performance.

A new, dedicated LPG Commodore is set for release later this year, but, unlike the Ford Falcon liquid injection system developed with Orbital, the Holden vehicle will still use gas injection. GoAuto understands that Holden is already looking at the potential of liquid injection for introduction at a later date.

Nissan Australia head of corporate communications Jeff Fisher confirmed to GoAuto that a project involving locally made components was in line for a GCIF grant.

He said Nissan was not yet in a position to announce details of the project, but said he believed the prognosis was positive for the application to be approved.

Nissan Casting Plant Australia – a subsidiary of Nissan Australia – produces about three million aluminium castings each year for export to Nissan factories in Japan, the US, Mexico and Thailand, as well as other motor companies in Australia.

But it has to compete against similar plants around the world for business, meaning every dollar counts.

Senator Carr said all applicants who submitted projects for GCIF funds before the cut-off had been informed that their applications were being processed by his department.

“We will process their applications so they will be treated properly, fairly and that due diligence will be undertaken for each and every project,” he said.

According to Senator Carr, projects still being processed involved grants bigger than the $3.5 million announced last week to start-up electric vehicle engineering company EV Engineering Limited to build seven ‘proof-of-concept’ electric Holden Commodores on behalf of a consortium of five major automotive industry suppliers.

He said the government had spent about $500 million on GCIF grants and generated about $2 billion in investment in the Australian motor industry “at the worst of all possible times in the industry given the economic circumstances globally”.

Senator Carr said such grants, which require the applicants to invest up to three dollars for every one paid by the government, meant the companies needed to “have some skin in the game”, ensuring that only projects with real market potential made it through the process.

He said research projects such as the EV Engineering electric Commodore proof-of-concept program were needed to verify the commercial potential of advanced technologies.

“We then want to make sure those R&D breakthroughs are commercialised, put into our general production arrangements through the Automotive Transformation Scheme, so they can actually have further support from the Australian government,” he said.

“And not just for this country. We want to provide access to the Chinese market, for instance, or other international markets as well (such as) the Middle East.

“The Middle East is very much the backyard for us, in terms of the automotive industry. The majority of our production at the moment is actually sold in the Middle East, and that is something that I would obviously want to see extended.” Senator Carr acknowledged the disappointment of the motor industry at the axing of the GCIF, which was part of the broader $6.2 billion 'New Car Plan for a Greener Future' program.

“But the fact remains that, given the extent of the disasters that have occurred along the eastern seaboard states, we have been obliged to ensure the sacrifice is being spread broadly, and industry is playing its part in sharing that pain,” he said.

Ford public affairs director Sinead McAlary said Ford had no submission in the GCIF pipeline.