Astra to return to Australia

The Holden Astra is set to make a comeback in Australia -- creating a rival from within General Motors for the locally-made Cruze that is in part funded by the Australian tax-payer.

But this time around the Astra will wear a different badge. At the Detroit motor show overnight General Motors finally confirmed speculation that the German brand Opel will come to Australia.

The company will start in 2012 with the Astra small car, the Corsa city car and the Insignia mid-size car. The Meriva and Zafira compact people movers will arrive in early 2013. OPC performance versions of the Corsa, Astra and Insignia may follow in late 2013.

Opel is yet to appoint a dealer network but the company says it will likely be a mix of Holden dealers and new, stand-alone dealers.

"From the customer's viewpoint, Opel will be a separate business but there will be backroom efficiencies," the boss of Opel, Nick Reilly, told Australian journalists. Opel staff will be based at Holden headquarters but they will not represent both brands.

Opel expects to be the second biggest affordable European brand behind Volkswagen and ahead of Peugeot, Citroen, Renault and Alfa Romeo within its first five years in business, growing from about 5000 sales to 12,000 sales annually.

Despite concerns about the impact the Astra may have on the locally-made -- and Australian tax-payer funded Cruze -- Opel claims Holden sales won't be dented by its competitor within.

"The cross-shopping between Chevrolet and Opel in Europe is almost non existence and the Opel shopper doesn't consider Chevrolet and vice versa," says Reilly. "We expect the same will be true with Holden." When pressed Reilly said "maybe five per cent" of Cruze small-car customers would switch to an Astra.

"We have some Astra customers right now who would prefer an Astra to a Cruze and they will be able to do that -- but they will pay a premium for the Astra," said Holden boss Mike Devereux.

Reilly said that Opel cars will take a premium price position compared to when when they were last sold in Australia -- as sharp-priced Holdens.

"We will be taking a different price position in the market compared to Holden," Reilly said. "Our main competition will be Volkswagen, as it is in Europe.

"Australia has room for this European brand. We aren't competing against the mainstream higher volume brands that Holden competes against, rather we're competing with the likes of Renault and Peugeot and Citroen and so on.

"In Australia we have previously introduced Opel-based products under the Holden brand but I'm sad to say we never made any money from it. We are determined to make money doing it. In the past we haven't."

When asked why Opel would succeed despite Renault's failed effort over the past decade, and despite other GM premium-brand failures in Australia -- Saab recorded decades of weak sales and Cadillac's introduction was axed at the 11th hour -- Reilly said: "A French brand versus German I think is a strength for us, it is the right time to launch our (new) product, and we are going to have outstanding help and expertise from the Holden organisation."

He said the expansion of Opel was crucial to the survival of the German-based brand. "First of all this is not just an Australian-play, this is an outside of Europe play," Reilly said. "We feel that Opel has the capability of selling eventually significant numbers of vehicles outside of Europe."

Opel will start with five or six countries this year, he said, in China, South America, the Middle East, with Australia set to follow in 2012.

"In the case of Australia it will probably be early 2012 because of certain regulations that we need to [meet] and changes we want to make to Australian-ise the cars"

Australian engineers will travel to Germany to develop local suspension, engine and transmission tunes for the Australia-bound Opel models.

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