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New Statesman: Holden's secret Russian agent

Curtain-call: Russia could replace China as an export destination for Holden.

It’s WM Statesman - not 007 Bond - as Holden looks at exports to Russia, with love

16 Aug 2006

GM HOLDEN could be headed behind the Iron Curtain as part of its aggressive export strategy for the new-generation WM Statesman and Caprice.

Holden’s director of engineering Tony Hyde confirmed exclusively to GoAuto that he would personally investigate the possibility of exporting the WM Statesman to Russia as a direct replacement for the Chevrolet Caprice – the US-built large sedan that was discontinued in the mid-1990s and opened the door for Holden’s successful foray into the Middle East.

Building on its success in the Middle East and South America, the Australian arm of General Motors is targeting the cashed-up top end of the Russian car market as the next opportunity to show its expertise to the world.

"We got into the Middle East on the basis that GM in the USA stopped making the Chevrolet Caprice," Mr Hyde told GoAuto last week.

"At the same time, the Caprice was also being sold in Russia, especially around the Moscow area, and was doing reasonably well. It is interesting that they always bought the Caprice when it was available and that has always stuck in my mind.

"We have never, from a corporate point of view, gone in and thought about what we could do about taking over that slice of business. I am confident the WM (Statesman) has the attributes that market demands, so I’ll go back and see if I am blowing smoke or not ... that will be a little project of mine over the next three months to stir up some attention." Mr Hyde will work together with Holden’s product planning chief Ian McCleave to build a viable business case and present it to GM through its Russian offices.

"Some of this stuff we have never done before, but we’ve been in that same boat with the Middle East and succeeded," Mr Hyde said. "I don’t see any reason why we couldn’t give this a go." The world’s largest country, Russia has a population of more than 150 million people and is currently experiencing a boom in middle- and upper-class prosperity, making it a prime market for the long-wheelbase Holden vehicles.

Beyond Russia, Mr Hyde has also not discounted the possibility of exporting a limited batch of Commodores to continental Europe in the future.

The tougher pedestrian safety regulations and the high price of regular fuels in the major European markets are the most obvious hurdles Mr Hyde said Holden faces.

13 center imageBut, in the wake of Holden Special Vehicles’ Vauxhall VX-R program, he said it may not be such a tough ask to export a small run of its premium models, such as the Commodore SS V, Calais and long-wheelbase Statesman and Caprice.

"We have looked at Europe before, and pedestrian protection regulations may restrict us to only being able to export 2500 Commodores over there," he said.

"But 2500 Commodores is almost a full week’s production for us. That’s not hard to do, and certainly not an arduous task to sell that many cars to the total population over there." The European experiment is likely to come at the expense of Holden’s export program to Russia’s southern neighbour – and the world’s most-populated country – China.

Holden had exported a batch of WL Statesman and Caprice models to China over the last few years, badged as the Buick Royaum.

Hyde admitted the WL "never reached the predictions that were made" and would not confirm if GM China had committed to continuing its Aussie-made import program – even despite former Holden executive Kevin Wall running the Chinese subsidiary.

But Mr Hyde admitted that "China will provide its own solutions".

"We’ve gone in there as a starting point with the WL and it hasn’t set the world on fire," he said. "I think in the short term, China will look after itself.

"I’ll let them make their own product announcements," he added.

Holden sees China as a serious long-term threat
THE Chinese automotive industry is likely to become a global superpower within the next decade, according to Holden engineering director Tony Hyde.

And its explosive growth has the potential to wipe out small manufacturers if they fail to be flexible enough to keep up with technology and, more importantly, keep manufacturing costs low.

"Their main objective in the short term will be to provide for themselves," Mr Hyde said.

"They will dip the toe in the water (of exporting) occasionally, but I think eventually everyone will be concerned about the Chinese industry... "It could be the scariest thing we’ve ever seen! "I am saying that on the basis that their wage rates continue to be low and all the other economic advantages they have stay in place. As countries develop, their standard of living increases and suddenly they are just another country like the rest of the world.

"I think they will get quite progressive quite quickly, and I would think that in 10 years they will be very strong." For Holden, Mr Hyde said it was therefore critical for it to survive in the global market as a respected source of technical expertise.

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