New Commodore will help steer sales

The launch of the new VE Commodore, which went on sale in August, was the first "all new" Commodore launch since 1997 and was one of the most significant for Holden since it released its first car in 1948, GM Holden chairman Denny Mooney told ABC television on Sunday.

The launch also was "huge" to the entire Australia manufacturing industry, Mr Mooney said.

" ... they rely on us because we are the high volume manufacturer here and we've got to be able to prove that we can be competitive and if we can't do it then it's going to be tough for everybody," Mr Mooney said.

He admitted sales of large, six cylinder cars are in decline, but refuted suggestions the industry was approaching its death knell.

"They definitely have been in decline for a variety of reasons. The cars like the Commodore was nine years old ... the Ford Falcon has been out there for a while, the Toyota large car was out there for a while ...

"We're launching a new car, we've got to see if we can build some momentum back into the market place and time will tell.

"I'm cautiously optimistic right now."

Mr Mooney said with a strong export program, and a focus on developing large cars instead of small cars, Holden could maintain a local manufacturing presence, despite imports now accounting for around 75 per cent of local car sales and China poised to enter the export market.

It would still be another three to five years before legitimate cars were exported out of China, Mr Mooney said.

"The reality is they'll never tool a whole plant to build large cars because their market is smaller cars and so we need to find those niches."

About 66 million new large cars are sold worldwide each year and Holden's plant builds 150,000, Mr Mooney said.

"My objective is to keep our plant full," he added.

Mr Mooney acknowledged that Holden would have to respond to rising oil prices by developing cars that run, at least partly, on ethanol or diesel fuel.

"We need to rethink our strategy," he said.

"We're looking at hybrids and we're looking at alternative fuels."

Holden currently ships cars to Brazil that run on 24 per cent ethanol and sells a car in Australia that runs on diesel.

Mr Mooney denied Australia was lagging behind Japanese and European auto manufacturers, in its development of engines less reliant on oil.

"Frankly, in Europe where diesels are popular the governments have tax incentives to make diesels affordable."

On beleaguered GM, Mr Mooney said it would be "very, very difficult" for Holden to operate as a stand alone business.

"Part of what I need to do here is I need to leverage GM's products that we need in this market that we can't build here and then we need to have a manufacturing operation and an engineering operation that's competitive but it will be very difficult."

Shares in GM fell significantly in the US late last year after lower local sales - brought down by increasing Asian competition - sparked fears the world's largest car maker could file for bankruptcy.

The company, which denied anything of the sort, has since undergone aggressive restructuring.

[AAP 2006]