General Motors’ Down Under affiliate Holden has placed on hold plans to introduce a third shift at its South Australian car assembly plant, writes Mike Duffy.

The market leader also has decided to freeze at present levels daily production of its top-selling large cars, Commodore and Statesman.

An in-house review concluded the national market would fall against pre-September 11 expectations by 20,000 vehicles between now and the end of this year and by 60,000 units in 2002.

While Holden is still going after a larger share against a backdrop of a falling market, it has been influenced by a decision by distributors in the Middle East to cut orders for Chevrolet Caprice-badged long wheelbase cars by 2000 units.

The move to adjust down the 2001 market estimate has been prompted by the impact of the terrorist attacks in the US and retaliatory raids on Afghanistan.
As well, lower economic growth forecasts for 2002 and a dampening effect on consumer confidence of the Federal Election campaign are contributing factors.
Says Holden’s executive director of sales and marketing, Ross McKenzie: “Only events as they unfold will determine the short and long term implications on our business in the Gulf region.”

Last year, Holden exported more than 29,000 cars and was planning to exceed that figure this year.

While Holden is taking a cautious position on domestic and overseas sales, Toyota and Mitsubishi Motors – both exporters to the Middle East – remain confident hostilities will not impact on vehicle sales.

Strategic Review-

General Motors

Toyota’s senior executive vice president John Conomos said orders for Australian-made Camry so far had not been cut by distributors in the Gulf region.

Conomos said his company’s domestic market forecast remained unchanged at around 770,000 vehicles.
Mitsubishi Motors Australia – which has recently commenced exports of Magna to the Middle East – and Ford Australia also see no reason to downsize market expectation.

The Federal Chamber of Automotive Industries is still flagging a market of 780,000 sales this year – in contrast to Holden which believes the total will come in at 760,000 and fall to 740,000 vehicles next year.

Holden was planning to introduce a third shift at Elizabeth to ramp up production as part of long-term plans to produce 180,000 vehicles in Adelaide by 2008.
The car maker considered expanding to the three-shift operation mid-year, then put off the move until the Christmas shutdown to avoid disruption in the lead-up to production of the new-generation Holden Monaro, released yesterday at the Sydney Motor Show.

The stylish two-door coupe version of the Holden Commodore – Australia best selling four door – was the star of the show eclipsing such showstoppers as the new Mercedes-Benz SL, BMW 7-Series, Lexus SC 430 and a host of other new cars.

Holden’s executive director of manufacturing operations, Albert Lidauer, said: “Our plan is to hold the daily build rate at 590 units – our forecasting tells us this is an appropriate number to meet market demand. But we have to cut our production schedules by 2000 cars this year (due to the drop in export orders).
“We have decided the move to a third shift in January is out and the additional shift looks highly unlikely during the remainder of 2002.

“If there is a sudden huge increase in the market then we would have to consider the introduction of a third shift.

“However. the war would have to finish and everything would have to return to normality before we made a commitment.”

Holden executives have met unions to seek co-operation on plans to pull back production by bringing forward programmed days off and scrapping overtime.

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