SUV set to replace Commodore

GM HOLDEN managing director Mike Devereux has dropped his strongest hint yet that the vehicle to be built alongside the next-generation Cruze in Adelaide from about 2018 may be a compact SUV, not a Commodore.

Mr Devereux confirmed that the next all-new Cruze will be built here from the latter half of 2015 and that there will only be a second line, so building a Cruze-based SUV would spell the end – as expected – of the Australian-built Commodore large car.

Mr Devereux said GM had made the decision about local manufacturing but he was not prepared to divulge it because he does not want it to distract attention from the launch of the VF Commodore next year.

“We know what that second vehicle line is right now,” he told journalists at the Australian International Motor Show in Sydney this week.

“We are not giving you any indications about that second model line because it would infer what the future is for Commodore, and that is something that is an interesting debate because we haven’t even launched our next Commodore.

“The second model just distracts people from what we should be focussed on, which is Commodore VF.

“I have been on the record to say we would be pretty stupid not to build a small car given how big that segment is, so we will be building the global Delta next-gen product line (Cruze).

“We have yet to announce what that second line-up is. I wasn’t even supposed to say what the first one was.”

From top: Holden Commodore Trax Cruze production.

Mr Devereux ruled out building the Malibu medium sedan here.

“We don’t have any plans to make the Malibu in Australia,” he said.

And, while not prepared to confirm that Holden would build a Cruze-based SUV to replace the Captiva, he did underline the importance of choosing a model line that is represented by the 10 best-selling vehicles in Australia.

Mr Devereux also admitted that his company is currently suffering from not having more SUVs, and that building a vehicle from outside the growth segments would ultimately spell the end for Holden manufacturing.

“If we can’t pick (two of the) top-10 cars, then we’re not going to make it – and that’s the bottom line,” he said.

“In order for us to make the Adelaide plant work economically, we have to pick two top-10-selling vehicles. There is no room for error, and they have to be top-selling vehicles rule number one.

“When you talk about SUV market growth, it has actually hurt Holden’s market share overall because we only have Captiva to fight it out.

“Would I rather have 10 SUVs right now? Sure. But we are trying to expand our SUV line-up, and Colorado (7) is the first of those and Trax will follow in 2013.

“So we are going to have in a very short period of time four different SUVs, while today we only have two, and it’s pretty hard to stay up with the market when you’ve only got two products to fight it out.” General Motors’ next generation of the ‘Delta’ global small-car architecture – codenamed D2XX – is expected to underpin a host of C-segment vehicles from 2014, including the 2015 Cruze in Australia and its closely related Opel Astra cousin.

A significantly modified version is said to also serve beneath the replacement for the ageing Captiva mid-size SUV.

Mr Devereux revealed that early pre-production preparation work will commence during the Christmas shutdown at the company’s Elizabeth facility, although it appears that designs for the D2XX vehicles have yet to be finalised.

Holden’s design studio in Melbourne is one of several GM centres known to be pitching styling themes, and a decision is expected within six months.

“There is over a billion dollars of (vehicle manufacturing and engineering) investment, with four billion dollars of economic activity … from 2012 all the way to 2022,” he said.

“We start to actually do work on this in two months’ time. We have to start ground works in our plant in Adelaide to get ready for body shop stuff.

“In three years from now we have to launch the first of these cars – we are talking about the back half of 2015.

“And when you look at making the cars, and needing the time (to prepare) … you’ve got to start doing stuff literally two years in advance, and planning out the changes in the body shop.” Although Holden is not leading the engineering of the next-generation Delta vehicles, Mr Devereux said there might be a chance of some Australian design input after GM design boss Ed Welburn makes his decision next year.

“Absolutely,” he said. “In the same way we have had input in the past.

“We are already right in the middle with both vehicles, with Holden people doing theming work, and potentially moving on with the vehicles depending on themes that are chosen.

“With design, you want to push that to as close to the release of the car as possible, and all the global studios are duking it out right now for the right to have the theme – next-gen Cruze, next-gen Captivas, all sorts of vehicles.

“We’re not going to be the homeroom for the Delta, but we’ve got people doing themes, and the themes look great, and there’s more to do on Delta.” Mr Devereux also revealed that Holden’s investment in the future second line of vehicles out of Adelaide is not contingent on exports.

“We haven’t talked about the business side of the strategy or exports for the next-gen, but what I can tell you is that we are going to continue to execute that plan in the current generation with continued VF exports, both to the Middle East and to the United States, as part of our new (2014 VF Commodore-based) Chevy SS program.

“I wouldn’t rule out anything in the future, but it will have a lot to do with what the economic conditions are relating to the dollar in five years from now: certainly a A$0.70 (would) change the whole equation (against parity with the US currency presently).

“I frankly can’t predict where the Australian dollar will be … and it is a very large determinant for your ability to make your business case for export.

“The smaller the vehicle, the more difficult the situation becomes with that parity dollar.

“The business plan of the future does not rely on exports. We export today, and if the dollar was a different dollar, I reckon we’d sell more police cars. I would love to be selling more police cars than I am today.”