General Motors’ Australian unit Holden is having to forge an alliance with the US parent’s small Pontiac to secure all the funds needed to develop the next Commodore range, according to a local newspaper report.
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According to the Age, parent company General Motors is under financial pressure and model cycle times are shortening all the time, and GMH might have had trouble securing another $A1bn or more to replace the VE Commodore in four or five years.
The paper said Holden posted a loss of $145m in 2005 and, though it is believed to have been profitable in 2006, the returns in Australia may not be enough to justify the investment needed for a new Commodore.
“I see a long term relationship with us and Pontiac,” GMH executive chairman Denny Mooney said at the recent unveiling of the G8 Commodore spin-off for Pontiac in Melbourne, according to the report.
“To overcome the inertia inside the corporation to get the investment funds you need to do new cars, you are better off having a partner,” he told The Age.
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By GlobalDataThe paper said two GM divisions committing to a new Australian-built model from the start would increase the likelihood of the investment being approved and of GMH’s Elizabeth, South Australia, assembly plant retaining its position as a production centre for large rear wheel drive cars.
“I can guarantee you, if Pontiac’s with us, it’s a lot easier to get the capital approved to do what we want to do,” Mooney said, according to the paper.
The Age added that the blossoming relationship with Pontiac might also result in American-made cars coming to Australia badged ‘Holden’.
Pontiac has already marketed the Monaro in the US and has just agreed to take more than 30,000 Commodores – badged Pontiac G8 – each year starting in the last quarter of 2007, it said.
The report said it wasn’t clear if a closer tie-up between the two divisions would mean Pontiac designers would have significant influence over the design of the new Commodore.
According to the Age, GMH is one of GM’s smallest divisions, making just more than 100,000 vehicles a year, around the same size as Saab – only GM’s specialist truck brand Hummer is smaller. Holden would not get back to clsoe to its full capacity of 145,000 units until the Pontiac contract comes on line late this year, the paper added.
“Pontiac is not a global brand like Chevrolet or Cadillac. It’s a local brand like we are,” Mooney told the paper. “They do between 250,000 and 300,000 vehicles a year.”
Mooney reportedly said Pontiac would have trouble raising the funds needed to put the Zeta platform – on which the Commodore is built – into production but, by importing a rebadged Commodore, the US division gains access to the latest GM platform without having to build a new plant or invest in a new model.
The Age said Mooney added that a close relationship with Pontiac, which has a reputation for sportier cars, would not preclude Holden selling cars to other divisions of GM.
GMH had sent a left-hand-drive Commodore utility (monocoque construction pickup truck) to Detroit a year ago and it was currently being evaluated, the paper said.
“It could be a GMC truck. It could be a Chev El Camino,” Mooney told the Age.
