Holden up to speed on $900m V6 plant

Holden has taken Australia's automotive industry into the 21st century with the decision to establish a new V6 engine plant in Victoria. Work on the project will start soon.

With a base investment of $512 million growing to $900 million by 2005, the Holden engine plant and supporting infrastructure will position Australia as a technology leader in the Asia Pacific.

This new investment adds to the more than $500 million Holden is already committed to investing in capacity expansion, tooling and related manufacturing infrastructure in South Australia over the next five years, as the company continues to expand its ambitious product portfolio.

The new plant could create up to 1000 jobs and is expected to be operational within 18 months.

A consolation prize of increased investment in Holden's existing operations in Adelaide was expected to soften the blow of losing the engine plant for South Australia.

The all-aluminum high technology V6 engine will power future generations of Holden Commodores, including the two-door Commodore coupe expected next year. The engines will also be exported in high volume to a variety of world markets and automotive brands.

The company said export revenues would amount to $570 million a year during the life of the new plant and would allow Holden and its suppliers to grow with new export customers.

The new V6 engines will spearhead Holden's ongoing vehicle export drive to a growing number of global markets demanding the latest in high technology powertrains and automotive sophistication.

Holden chairman and managing director Peter Hanenberger said that the new engine plant secured Australia's automotive future and positioned the nation to continue to compete with the world's best.

"This engine plant was won for Australia against the strongest of global competition and places beyond any dispute our status as a world competitive nation," Hanenberger said.

"It clearly recognises that we have the skills base and infrastructure in place to justify such a significant investment in Victoria.

"The new plant will open up exciting job and career opportunities and provide an ongoing incentive to young Australians to take up high technology studies in the future.

"As we look to the future of our automotive industry, it was hard to determine how it could continue to be a world competitive industry without winning this opportunity to place a firm footprint of technological leadership, here in the Asia Pacific."

Holden has been producing engines for 60 years and has been exporting to other markets for more than 30 years. The new plant will build 900 engines a day with the first ready for export in 2004.

"Although it is inappropriate to reveal too much detail about the engine at this time it will clearly deliver against the most demanding world standards in environmental, cost, performance and fuel economy terms," Hanenberger said.

Hanenberger also said that Holden was still considering plans for a four-wheel-drive version of its Commodore.

In 1999, Australia's total automotive exports reached a record $4.1 billion, with Holden contributing $1.2 billion.