Holden Cruze 2014 News

Don't hold your breath for a new-car bargain once the last of Australia’s car factories close by the end of 2017. If anything, prices may rise. Toyota, Holden and Ford have been force-feeding locally-made cars onto dealers and fleet buyers at ridiculously discounted prices for years, just to keep their factories running.Late last year Toyota was offering the new Camry for $26,990 drive-away, about $8000 off the full RRP. Early last year, the Cruze became the cheapest locally-made Holden in almost 20 years when its RRP dropped below $20,000.But deals like these will likely evaporate once the Toyota Camry and Holden Cruze -- and the vehicles that will replace the Ford Falcon sedan and Territory SUV -- are fully imported. Toyota, Holden and Ford will be able to simply order the number of cars they think they can comfortably sell without flooding the market.And, of course, it goes without saying that government departments will no longer be forced -- or encouraged, as it is called -- to buy locally-made cars. This preferential treatment has artificially inflated the true demand for Australian-made vehicles for decades. Which is why secret internal forecasts by Toyota, Holden and Ford show demand for the cars that will replace their locally-made models will be slashed.Toyota forecasts demand for the Camry could be cut by more than half. Holden and Ford are similarly pessimistic. How many Falcon buyers will take to the new Mondeo, its likely replacement? Ford sold just 10,000 Falcons last year compared to just 3000 Mondeos.Likewise, how many Holden customers will find a front-drive four-cylinder or V6 sedan appealing, whether or not it has a Commodore badge? If the recent lacklustre response to the Holden Malibu sedan is a guide, not many (1300 deliveries last year compared to the Commodore’s tally of 27,000). Without an oversupply of vehicles or the desperate need to keep a factory to keep running, there will be no need for Toyota, Holden and Ford to discount so dramatically.Instead, they will compete on a relatively even footing as vehicle importers with the other 60 or so brands in Australia. Which is why currency exchange rates, not tariffs, will play a greater role in determining car prices in the future. The Federal Chamber of Automotive Industries, the peak body that has been all but silent as the industry crumbled over the past eight months, this week called for all import tariffs on motor vehicles to be scrapped now there is no local industry left to protect.“Post-manufacturing, there is no rationale to maintain the 5 per cent tariff on imported motor vehicles,” the chief executive of the FCAI, Tony Weber, said in a media statement. But this posturing by the FCAI is unlikely to have the Federal Government quaking in its boots. Australia is heading down that path anyway. The Federal Government is keen to create the perception that car prices will drop once it pushes ahead with more Free Trade Agreements.We already have FTA deals with North America and Thailand, but Japan and South Korea are set to follow. These four countries alone accounted for almost 75 per cent of all imported vehicles sold in Australia last year. You might expect South Korean giant Hyundai, its sister company Kia, and Holden (it sources most of its passenger cars and SUVs from South Korea) to be delighted about the prospect of a zero tariff. But they’re more worried about currency fluctuations. The chief executive officer of Hyundai in Australia, John Elsworth, a former high-ranking Holden executive, says currency will continue to be a greater factor in vehicle pricing because import tariffs are already so low -- and currencies can swing by more than 5 per cent in a day, let alone across a month or a year. Indeed, there has been a more than 60 per cent fluctuation in the Australian currency over the past decade.In the year 2000 one Australian dollar bought an average of US0.63 cents; last year it bought a peak of US$1.04 and we’ve been tracking mostly above US0.90 cents since. Add to the mix the impact foreign governments can have on exchange rates. Japan, for example, has been accused of artificially devaluing the Yen over the past 12 months to boost exports. It partly explains why the prices of the imported Toyota Corolla and Nissan Pulsar and other Japanese cars are at 20-year lows.Who knows what Australia’s exchange rates will be like four years from now? The car companies -- and the government for that matter -- certainly don’t. “The biggest variable is obviously exchange rate (and) that can fluctuate daily in both directions,” said Mr Elsworth. “Reacting to that and shifting prices wouldn't make sense -- you have to work longer-term in this business.” In other words, car companies ride the currency wave. Some months they make less profit, some months they make more.Sometimes they get caught short, and start discreetly deleting standard equipment from cars hoping customers won’t notice, such as a glovebox light or a vanity mirror. Fitting thinner carpet is another example. But they always try to keep the RRPs relatively stable so they don’t adversely affect customer confidence and, ultimately, the resale value of vehicles. Did you know depreciation is the single biggest cost of car ownership after you’ve bought it?Luxury Car Tax, on the other hand, is something that needs to be dealt with, but, sadly, probably will be left alone. Even the Productivity Commission advised against it in its preliminary report into the car manufacturing industry. “Because it is levied on a narrow base, the LCT is a higher-cost and less efficient method of raising revenue than more broadly-based taxes,” the Productivity Commission report said. “The LCT is also arbitrary in its effect, in that it leads to taxpayers with the same economic means paying different amounts of tax depending on their taste.”Quoting the 2010 Henry Tax Review, the Productivity Commission helpfully added that LCT “falls on people with a preference for relatively expensive cars, but not on those with a preference for diamonds, fur coats or yachts”. For background, the LCT is 33 per cent of the price of a vehicle above $60,316, or above $75,375 on vehicles that use less than 7.0L/100km according to the Australian standard fuel rating label.The concession was introduced several years ago by the then Labor Government in an attempt to appeal to environmental interests. Instead, it favoured buyers of prestige cars. It is a further sign of how backwards this policy is when any government thinks 7.0L/100km is fuel-efficient; most popular German cars now comfortably dip below this, which is why Toyota is now the biggest contributor to LCT by virtue of all the LandCruisers it sells, among other gas-guzzlers.Understandably, Toyota and others have come out swinging against the LCT. In its submission to the Productivity Commission, Toyota said: “The luxury car tax is not a form of protection for local car makers. In fact the market share of locally built cars has dropped significantly since the LCT was introduced. Toyota supports the abolishment of the LCT as it is a punitive and inequitable tax paid by more Toyota customers than anyone else.”But the Coalition Government is unlikely to scrap a tax that brings in an estimated $450 million each year, especially when it has so many financial black holes to fill. Which means, for now, it would seem car prices aren’t likely to change one bit once the Australian car factories close -- unless the dollar reaches new, stratospheric heights.This reporter is on Twitter: @JoshuaDowling Where your car comes from: percentage split of all imported cars in 2013Japan 35 per cent (FTA planned)Thailand 22 per cent (FTA already in place)South Korea 13 per cent (FTA planned)United States 3.5 per cent (FTA already in place)Germany 7.5 per cent (no FTA planned but many cars attract LCT)United Kingdom 3.5 per cent (no FTA planned but many cars attract LCT)Other countries represent 15.5 per cent of imported vehicles, including Spain, Czech Republic, India, China, Mexico, Poland, South Africa, Mexico, Portugal, Belgium, France, Italy, Indonesia, Poland and others.Source: FCAI  

The top-two sellers will be driving the competition; an all-new Mazda3 is around the corner and Toyota will introduce an all-new Corolla sedan to sell alongside last year's champion.Good supply of the two all-new top-selling models means that everyone else in the small-car class -- representing almost a quarter of all new vehicles sold -- will have to sharpen their pencils or risk becoming old stock.To that end, the Mitsubishi Lancer will be in runout for most of the year, while Suzuki will also be pushing hard to clear the decks of its popular Alto city car, ahead of the new model which has grown in size.The locally-made Holden Cruze will also find the going particularly tough against the newer models; Holden has already admitted it loses money on each one it builds and can't limbo much lower on price.Volkswagen will likely maintain its promotional pricing on the Golf every other month as the German factory ramps up production, while Hyundai also has its revised i30 hatch and Elantra sedan twins to take to market."There's never been a better time to buy a new car," said Toyota Australia executive director Tony Cramb, intentionally repeating an old industry cliché.Low interest rates and improved consumer confidence have helped drive sales, he said.Several runout models -- particularly the Nissan Navara and Mitsubishi Triton utes, both of which were Top 10 finishers -- have prompted unprecedented discounts.The new-car market dipped by up to 3 per cent from August to November 2013 in the wake of the Rudd Government's proposed changes to Fringe Benefits Tax rules on company cars, but the industry expects a full recovery in 2014 after December's modest rise of 1.4 per cent.The industry has forecast an increase from last year's record of 1,136,227 new-car sales, to 1,145,000 in 2014.However, Mr Cramb said new-car sales in 2013 would have been higher if not for changes to Fringe Benefits Tax rules proposed by the former Labor Government."The FBT announcement made by the former government definitely slowed down business sales … there are many companies still just making their way back to normal purchases," said Mr Cramb.He said it took the market "a lot longer than we had anticipated" to recover form the botched plan that would have quadrupled the tax on company cars."Companies have extended leases, delayed purchasing decisions, and rather than coming back once … the new Government made it clear they were going to implement previous Government's policies, there was a skepticism in the market among the big fleet companies."This reporter is on Twitter: @JoshuaDowling

The much anticipated sibling to the locally-made Cruze hatch and sedan will join the popular line-up early next year delivering a highly specified, flexible and safe, stylish vehicle.Cruze Sportwagon will be available in two models, a CD with the choice of two fuel efficient engines, a 1.8 litre petrol engine or a 2.0 litre turbo diesel, or a premium CDX with a 1.8 litre petrol engine.The entire range boasts generous load space, Bluetooth connectivity with voice recognition, cruise control and iPod integration with steering wheel controls as standard. The versatile Cruze Sportwagon boasts the same safety features and robust body structure that earned the Cruze sedan and hatch a five star safety rating from the Australasian New Car Assessment Program (ANCAP).Safety features include six airbags, rear park assist and electronic stability control including anti-lock braking system and traction control. Prices and full specifications and features will be announced closer to the start of sales. 

The good news is that the cars of the future are not boring electric "golf carts" but sleek and sexy machines.Take for example the BMW Vision EfficientDynamics Concept, or even the updated Toyota Prius C. Just as smart, but also featuring powertrain technology that is much further down the line, is the Hyundai Blue2 Concept, powered by a hydrogen fuel cell, or the Mitsubishi Concept PX-MiEV with a plug-in hybrid system that extends the use of the vehicle in electric mode.Here is a sample of the green vehicles on the stands at this year’s show:BMW Vision EfficientDynamics Concept: Making its Australian debut, this is the concept for the coming BMW i8. A conventional 1.5-litre three-cylinder turbo-diesel mated to a pair of electric motors powers this four-wheel-drive 2+2 sports car. The hybrid combination pumps out 265kW of power and 800Nm of torque, and can run on electric power alone for up to 50km, diesel only for 645km or a combination of both. The lithium-ion battery packs charge in just 2.5 hours from AC mains or 44 minutes on quick charge.Ford: The new Liquefied Phase Injection LPG technology in the Ford Falcon EcoLPi has improved power and torque and decreased fuel consumption (12.5L/100km) and CO2 emissions (203g/km). Ford will also show its long-awaited diesel Territory with a 2.7-litre V6 boasting fuel economy of 8.2L/100km.Holden: The Ecoline Series II Cruze range with a new generation 2.0-litre turbo diesel (5.6L/100km) is Australia’s most fuel-efficient locally-built car. The stand will also feature the Cruze 1.4-litre intelligent turbo induction (1.4 iTi) petrol engine (6.4L/100km manual) and other Ecoline models, including the Commodore E85 flex-fuel and Spark Ignition Direct Injection V6 powered Commodores and Captivas.Honda hybrids: Honda will show the stylish Honda CR-Z coupe petrol-electric hybrid that arrives here later this year, as well as its second-generation Insight hybrid.Hyundai Blue2 Concept: This is the Korean company’s first sedan-style Fuel Cell Electric Vehicle (FCEV) powered by hydrogen. It delivers power of 90kW and fuel economy of 2.8L/100km. Being a concept car, it comes with a host of future electronic aids, such as an automatic opening door system, roof and side cameras to replace mirrors, and a motion sensor-operated infotainment system.Lexus LF-Gh Concept: This concept features the hybrid system already in the Lexus fleet, but is the first time the spindle-shaped grille that will become a feature of future designs will be seen here, and hints at a future grand touring sedan. Lexus Australia chief executive Tony Cramb says the LF-Gh reaffirms that hybrids can be sleek and stylish.Mazda Minagi: This is a crossover concept specifically engineered to be the first with frugal SKYACTIV technology diesel and petrol engines and transmission. The car is an insight into the coming CX-5.Mercedes-Benz C-Class: The range now includes the updated 7G-Tronic Plus seven-speed automatic transmission for improved economy. Diesel models come with the ECO start/stop function as standard, and the C250 diesel coupe boasts economy of 5.1L/100km. At the top end of the Benz range, the S350 diesel BlueTec luxury saloon has economy figures of 7L/100km.Mitsubishi ?i-Miev-based electric vehicle concepts: The i-MiEV is about to hit the showrooms and Mitsubishi already has an SUV variant, which will be on its stand. The Concept PX-MiEV has a plug-in hybrid system with fuel economy better than 2L/100km. It is powered by two permanent magnet synchronous motors and a 1.6-litre MIVEC engine. The PX-MiEV also features Smart Grid technology that allows the battery to power home appliances during a blackout or at peak times when electricity tariffs are high.Nissan Leaf: The all-electric Leaf hits showrooms next year. The World Car of the Year features a satnav system linked to the "Global Data Centre’’ in Japan so you just press a button to find the closest recharging stations.Toyota Prius C concept & Prius V: The latest in the Prius family are a funky coupe concept (C) and a people mover (V). The Prius C concept shows how stylish the Prius can be and the V shows how spacious it can be. The V also features a lightweight-resin panoramic moon roof, weighing about 40 per cent less than a regular glass roof of the same size. It will be the first to feature Toyota’s new Entune multimedia system with mobile internet and Microsoft’s Bing search engine. The system will offer live weather and traffic updates, along with monitoring the best fuel prices in town.Volkswagen Golf BlueMotion: The BlueMotion has the same 1.6-litre engine with the same output at 77kW and 250Nm as the 77TDI, but its fuel use is just 3.8L/100km compared with 5.12L/100km (77TDI) and CO2 of 99g/km (133g/km 77TDI). The gains are made from a lower idle speed, stop/start technology, aerodynamics and low rolling resistance tyres.Volvo V60 diesel plug-in hybrid: The world’s first diesel hybrid plug-in goes into production next year. The driver can choose from three modes: Pure, which is all-electric with a range of up to 50km, Hybrid with an average fuel consumption of 1.9L/100km and CO2 of 49g/km, and Power, which boosts total diesel and electric power to 200kW and 640Nm of torque with acceleration to 100km/h in 6.9 seconds. The turbodiesel drives the front wheels and an electric motor drives the rear axle. It can be recharged via a regular power socket in 4.5 hours on 10A charge.PLUS: There will also be displays by infrastructure companies including Better Place EV, which has announced plans to begin rolling out infrastructure in Canberra this year.

Holden boss Mike Devereux this week confirmed the small car - to be built in Adelaide from March - will get an optional 1.4-litre turbocharged petrol engine.  The powerplant is from the Opel "Family Zero" series. One derivative is used in the Chevrolet Volt hybrid. "It's a great engine in terms of economy and performance and it's the first new powertrain we'll be introducing for Cruze," Devereux says.  "We have previously confirmed that both petrol and diesel models will be built at Elizabeth - sedans start in the first quarter and that awesome-looking hatchback in the second half." Mr Devereux says Cruze production was secured for Australia by a $179 million grant from the Federal and South Australian Governments which was in addition to "hundreds of millions more from Holden" to make Australia's only locally-built small car. He says the current Cruze, launched in June last year, "has performed phenomenally well so far.  "It's our second-best seller, it cracked the top-five and outsold established nameplates like Falcon several months this year," Devereux says. "We've sold 26,253 units to November, which is up nearly 20 per cent on last year, and we're forecasting nearly 28,900 (28,848) for the full year." He says making the Cruze in Australia allowed Holden to give people an option to buy a locally-made small car that had been engineered for Australian conditions.  It ensures a more stable workload for our employees and has created new business opportunities for our local suppliers," he says. Holden says the future is rosy. It will add 165 employees to its Elizabeth plant and launch 10 new models - new and refreshed - in the next 18 months. "This year we see a total car market in Australia of 1.034 million," he says.  "Total sales for Holden this year will be around 133,800 - up 12 per cent on last year - which is a pretty solid performance. "We'll finish 2010 with about 12.9 per cent share - on par with last year. The market is good, but it's tough. We're not in the business of chasing market share. "Next year we think the market will grow around 10 per cent - so we're looking at about 1.045 million.  We think that growth will come from new models - including Holden launches like the local Cruze, Captiva and Barina - and good economic conditions."