Even Australian prime minister Julia Gillard turned up to help General Motors’ Australian unit Holden celebrate the start of Cruze sedan production at the factory in Elizabeth, South Australia.

Holden chairman and managing director Mike Devereux said: “This is Holden’s largest engineering and manufacturing programme since VE Commodore but it’s also a successful private and public partnership which shows what can be achieved when industry and government work together,” he said.

The Cruze was previously imported from Korea. The ‘localisation programme’ received a grant of A$149m from the federal government’s Green Car Innovation Fund and a $30m contribution from the South Australian state government.

“Automotive production is the largest manufacturing industry in Australia and we are one of only handful of countries in the world with this capability to design, build and sell cars,” Devereux said.

“Two years ago, during a make-or-break time for our people and our industry, we made the decision to build Cruze in Australia and it’s already creating new capabilities and opportunities for the industry and our critically important supplier community.”

The Cruze was initially built only by GM Korea and production also started recently at a GM plant in Ohio, US. The Australian-made Cruze range includes a new two litre turbodiesel manual model returning fuel economy of 5.6 litres/100km and a new 1.4 litre turbocharged petrol model that uses 6.4 litres/100km.

“Localising Cruze has allowed us to re-engineer the car for Australian drivers, with greater fuel efficiency and performance and, given our manufacturing operations, the flexibility to meet the needs of the Australian market well into the future,” Devereux said.

The front-drive Cruze, based on GM’s Delta small car architecture shares its production line with the large, rear drive, Zeta platform-based Commodore which, Holden claimed, makes Elizabeth “one of the most flexible automotive manufacturing facilities in the world”.

The Cruze hatchback, launched at the Geneva show this week, will also be built in Australia from later this year. At that point, the plant will be making 51 models on two architectures with six body styles and nine variants in both right-hand drive and, for export only, left-hand drive.

The Cruze sedan roof, body sides, closures, fascias and the majority of interior plastics also manufactured on site.

There are currently 2,500 on the Elizabeth payroll.

Once Cruze output ramps up, Elizabeth will build about 430 vehicles a day over two shifts, five days a week.

The plant exported 7,817 vehicles in 2010 to New Zealand, Brazil, the Middle East, South Africa, the United States and Canada.