Holden to manufacture two new cars in South Australia

Holden Australia will build two new ‘world-class’, ‘fuel-saving’ cars at its Elizabeth, South Australia plant in the second half of this decade, after receiving $275 million from the government.

The investment package comes from the Australian, South Australian and Victorian governments, who claim they have ‘secured’ car manufacturing in Australia – at least until 2020.

The venture will reportedly drive more than $1 billion of investment for the local automotive manufacturing industry.

“The investment will help Australia retain its capability to design, engineer and build cars with two all-new vehicles going into production at Elizabeth, South Australia, in the second half of this decade,” said Holden chairman and managing director, Mike Devereux.

“The two new Australian-made cars will be world-class. They will be underpinned by global architectures from within General Motors and bring new fuel-saving, connectivity and safety technologies to Holden’s portfolio.

“The program also delivers a significant return on investment. We estimate Holden will inject around $4 billion into the Australian economy over the life of the program.”

According to Devereux, the investment plan is a positive move not only for the car industry, but for other related sectors such as supply chain, research and development and retail.

“It’s also important that people understand the economic benefits that flow from this public investment,” he said.

“Holden is delivering a very attractive return on investment. We estimate the current locally-built Cruze will generate more than a billion dollars of economic activity from Holden in Australia over the life of the program.”

The investment comes as good news for the industry following Holden’s announcement in February that it would cut the second shift at its Elizabeth assembly plant.

The company shed 150 contract workers, allowing it to assemble cars in less time.

Holden said this would help to ‘reduce costs and production time per vehicle’, as the company gears-up for lessened export demand in 2012.