Pontiac, by Holden!

GM HOLDEN will sell more cars overseas than it does in Australia if a plan to export its billion-dollar VE Commodore to the US as the next-generation Pontiac Grand Prix sedan comes to fruition.

In an exclusive interview with GoAuto to discuss the concept of the VE as a world car rather than just an Australian car, company chairman and managing director Denny Mooney said that he was anticipating approval for the US program.

"You will see an announcement in the next three to four months. Assuming it happens, (shipments) would start a little beyond that. I am not making an official announcement (in this discussion)," he told GoAuto, "but it looks very favourable." "I can tell you unequivocally that we designed the VE with the US in mind." Mr Mooney confirmed that VE Commodore SS-V four-door sedans were under assessment in Detroit and indicated that speculation in the US motoring media that these Holden sports sedans would be sold as the Pontiac Grand Prix was not far off the mark.

In the strongest indication yet that GM is about to announce renewed Holden exports to Pontiac in the US, Mr Mooney revealed Holden plans to export more cars from the company’s Elizabeth plant in Adelaide than it sells here.

"I think from a manufacturing strategy here in Australia, Holden will ultimately have at least as many exports, if not more exports, than we have domestic (sales of local cars)," he said.

The plans are part of a strategy to drought-proof Holden from the changes taking place in Australia in which large-car sales are drying up following a shift in the nature of the market.

"The one thing everyone needs to remember in this market, as in every market around the world, is that the market is fragmenting," Mr Mooney said. "You are not going to see any market in the future with one car or a couple of car lines dominating the market like we did 10 or 20 years ago.

"Everybody (when assessing large-car performance) wants to compare back to the market 10 years ago, but the market is much more fragmented. There are many more brands out there and many more models out there than there were back then (therefore) you have to find more markets for the car that you have.

"I don’t know if we would go as far as Toyota’s model where they have many more (Camry) exports than they do domestic sales, but I can see in the future to survive we must have a fairly significant amount of export business." Mr Mooney said that in addition to the Middle East, where sales are expected to remain around 30,000 units a year, the US was "the other big market that we are looking at".

He said that an export program of a four-door sedan to the US market could potentially achieve far more volume than the Pontiac GTO (Monaro), which failed to achieve the 18,000 units expected of it.

"If you look at this kind of vehicle in the US today, the sedan market is 20 times bigger than the coupe market." Asked if the potential of the Pontiac program was inhibited by using the Monaro coupe body, Mr Mooney said: "There is no question. Coupes are very niche products in the US. Very niche. There is significantly more volume in a sedan.

As sedans got better looking and got more sporty performance in the US market, coupes over time just disappeared." Mr Mooney said that Pontiac was "the natural partnership" for a Holden-sourced VE sedan program in the US. He has already told Australian media earlier this year that the SS-V would make a great Pontiac and that Holden could play a role in moving Pontiac to rear-wheel drive.

Left: Current Pontiac Grand Prix GXP.

Meanwhile, Mr Mooney said that the first shipments of the VE have gone to the Middle East and the VE launch was held there two weeks ago. "We will do more than 30,000 vehicles there next year and we will do about 30,000 this year.

That includes the Chevrolet Lumina (Commodore) and the Chevrolet Caprice (Statesman). It could increase, but that is our current forecast for next year. I am optimistic. There is a lot of enthusiasm for the product." This compares with a forecast for 62,000 VZ/VE sales this year in Australia. This means that if Holden was to export more cars than it sold domestically, sales of Pontiacs would have to be well over double those achieved by the GTO.

Mr Mooney said that one of Holden’s strengths was that it already had installed capacity, equipment and infrastructure for the VE architecture. He said that under the GM "flex strategy", a model could now be moved quickly from one plant to another.

"It potentially gives you more options in more markets." Far from seeing it as a threat that VE production could potentially go elsewhere, Mr Mooney saw the “flex strategy” as an advantage for Holden.

"GM looks very hard at its existing installed capacity before it decides to spend money on new installed capacity. So we have the advantage of having spent half a billion dollars (on VE capacity) over the last three years," he said.

He said that having VE architecture being built elsewhere in the world, like for the Camaro, would benefit Australian parts makers supplying the program and would mean that GM could afford more sophisticated systems for cars sold in small markets. This was because the investment recovery in sophisticated systems was being spread across total VE architecture volumes.

"Some of the engineering that we are doing on that vehicle (the Camaro) that is advancing the architecture will help our vehicles (Commodore) over time because it will apply directly to our vehicles," he said.

"It can help us put more advanced electronic features in our cars here and can help leverage lower cost components that would be common." Family II demand slows
THE age of the Holden Family II four-cylinder engine, which went into production in Melbourne in 1982, is beginning to catch up with it, the chairman and managing director of GM Holden has told GoAuto. And the four-cylinder plant that makes it may only just see out the decade.

Denny Mooney said that the cut-back of 200 jobs at the Holden engine plant announced last week was attributed to the age of the engine which has led to reduced demand for it around the world.

"Daewoo is going gangbusters but not in the models that use the Family II engine," he said.

"They sell cars in 140 countries around the world under multiple brands with all different powertrains and it just so happens that in some of the regions that take the Family II engine the volumes are down or there are some older models using the Family II engine that are going out of production as some of the newer stuff is coming in.

"I think that by the end of the decade this engine plant will probably discontinue. I must say that several of my predecessors have wrongly predicted the same thing (the imminent demise of the engine).

"But it is still pretty good export business. We will be doing 500 a day next year." Mr Mooney said that four-cylinder engine production would cease when the engine ran out of customers.