Is a small Holden coming?

With Commodore sales down 24 per cent this year, Holden is examining ways to sustain Elizabeth production and complement its local and export business.

This may mean a small car being built alongside the Commodore and Statesman.

“We're certainly looking at offering a different portfolio, which we've already started to do,” he says.

Reilly admits that, in the longer term, “one likes to think you're manufacturing to suit the domestic market, and that has clearly changed”.

“In my view, that change is not going to be reversed. In fact, it may even go further than it has already. Longer term, I think we do need to consider what we make here.”

However, he's cautious about what may eventually be built.

“I can tell you, sitting here today, we have no plan to bring in a different model or a different vehicle.”

Reilly says Ford Australia's decision to start building the Focus at Broadmeadows from 2011 makes sense “in the way the market has gone”.

A decision would be made “in two to three years” about which manufacturing direction Elizabeth would take.

“We have to also know what the long-term outlook is for the current products we produce here in our export markets.

“Are they going to stay with those products? Are they going to stay with Holden-sourced products? These are the sorts of decisions made globally in GM.

“We have to see what we're going to be called on for export business, then build into that the rest of our manufacturing plan.”

Reilly says GM-Holden's current export business is strong, and he expects it to remain strong for now, despite the effect on exports of the strong Australian dollar.

GM-Holden exports the Commodore and Statesman/Caprice to the Middle East and the US, where the Pontiac G8-badged Commodore sedan is now on sale.

Despite the high dollar, Reilly says no export program is in doubt, “but if the Aussie dollar goes up another 25 per cent, I can't tell you what we might have to do”.

Reilly says the Elizabeth plant was recognised in GM for its low-cost, low-volume expertise.

“I think one of the most significant things about manufacturing here at a profit is it has as much to do with the supply base as it has with us.

“I think we know how to make 20,000 or 30,000 or 40,000 vehicles and be quite efficient at Elizabeth.

“But you also have to locally source at least 50 or 60 per cent of the vehicle in order to make it locally viable.

“So we do need a supply network that can provide competitive quotes on components.

“We have good relations with suppliers here, but if they're going to bring in new components and new sources of supply, they have to be competitive enough so they can export as well.

“One of the things we're hoping for with the Federal Government automotive industry review is that it's not just a matter of the OEMs, it's very much a matter of the supply base staying competitive.”