Holden Sees Export Opportunities For Aussie Engines & Suppliers

[JoeT]

Holden Sees Export Opportunities For Aussie Engines & Suppliers

John Mellor
30 May 2006
www.goauto.com.au

GM Holden chairman and managing director Denny Mooney has scotched doomsayers in the motor industry who are predicting that Australian manufacturing will be engulfed by exports from China, arguing the fears of massive China exports were “a little overplayed”.

Mr Mooney said that far from being overwhelmed by China exports, there were
opportunities for Australian suppliers to participate in China’s massive domestic auto market growth.

He also said General Motors was predicting that the domestic market in China
would grow by 587 per cent between 2001 and 2020 to 15.8 million units a year and that Australian suppliers could participate in that growth.

In response to questions from GoAuto about Australia’s competitiveness
in China, Mr Mooney said that he believed China could become a significant market for engines built in Melbourne.
“I see China being (a market) for our (Holden) engines,” he said.

Mr Mooney said Holden could competitively export engines made in Melbourne into China – with or without a free-trade agreement.

“We export our four-cylinder engine to China right now and that engine is very competitive. GM builds four-cylinder engines in China. We know what it costs us to build engines in China and I can tell you we (Holden) can be competitive today. The same thing with the V6.”

Mr Mooney said that if there was demand for V6 engines for GM in China the demand would be filled from Australia.

“The thing about the V6 engine is that we have put that plant here and invested in the capacity here.”

He said Holden was an integral part of GM Asia- Pacific and that GM “would not put in additional capacity somewhere else”.

“The capital investment is pretty high to do that, even in China. You still have to buy the same machining equipment you put in here if you put it in China. That equipment is pretty standard.

“The expensive part of building an engine is basically the capital equipment. We have relatively affordable energy and natural resources (in Australia) and we think we have an opportunity to keep that plant full by leveraging these export opportunities in the Asia- Pacific region.

“So we feel good about the growth in China and about what that means for our operation here.”

However, he said the story could be different if Holden ran out of spare capacity.
“If I have to put in new capacity, then I would not necessarily do that here. I would put new capacity right there,” he said.

Mr Mooney said the V6 engine was already available in China in the Statesman (Buick Royaum).

“They sell the Buick LaCrosse, which is smaller than our vehicle (Statesman) but it packages a V6. There is V6 demand. Sport utilities are starting to take off up there, too.”

He said most car-makers were struggling to keep up with growth in China and that a lot of suppliers were “trying to get a footprint in China because the supplier footprint is still one of the weak spots”.

“Everyone is struggling to put enough capacity into China just to keep up with the market. We hear a lot about exporting out of China into other markets but the reality is that, with the growth there, it has been difficult to keep up. So I think the China play outside of China (massive exports) is a little overplayed.

“It is hard to predict long-term, but short-term I would say there are not wholesale plans to be exporting completed vehicles out of China. The challenge is trying to keep up (with domestic demand),” he said.

Holden built Buick Royaum (Holden Statesman)

[Aromanances]

Great news there is V6 demand in China. This is perfect, now GM can sell the Chines built 3.4 in China and stop sending it here!!!

[RedVee8]

Nah, the Chinese will want the HFV6 & keep the 3.4 as an American Special.

[plane]

Originally Posted by RedVee8

Nah, the Chinese will want the HFV6 & keep the 3.4 as an American Special.

That is not even funny.
May kangaroos and wallabies populate your island.

[RedVee8]

Yes, they may.

maybe not funny, but you can just see it happening.....

[Aromanances]

This just burns me. GM exports the good stuff to China, then ship $#!** back to the US. This is just BS. Why can't someone at GM do someting about this. They whine about not having capacity for the good stuff like the 3.6 and six speed, but can send the good stuff to CHINA!!!! OK send it from Australia to the US and Let china have the crap 3.4 </IMG>

[Butz]

Originally Posted by plane

May kangaroos and wallabies populate your island.

[cfch3399]

For GM: China- most favored nation. America- screw it, we're moving all production to Mexico, Canada, Australia anyway.

Originally Posted by Aromanances

This just burns me. GM exports the good stuff to China, then ship $#!** back to the US. This is just BS. Why can't someone at GM do someting about this. They whine about not having capacity for the good stuff like the 3.6 and six speed, but can send the good stuff to CHINA!!!! OK send it from Australia to the US and Let china have the crap 3.4 </IMG>

[Ming]

We export our four-cylinder engine to China right now and that engine is very competitive.

Um, no, its not. Not if its the same one we get here in the Forenza.

From Edmunds:

The Suzuki Forenza comes with only one engine -- a 2.0-liter inline four-cylinder making 127 horsepower and 131 pound-feet of torque. A five-speed manual transmission is standard and a four-speed automatic is optional. Fuel economy is below average, rating just 23 mpg city, 30 mpg highway with the manual and 22/31 with the automatic.

Holden should be building new Ecotec 4-cylinder designs, not the Holden Family 4-cyl engines that have passed their prime.

[01cavalier]

Good if Holden has the capacity, use it. We really do need to get the HF engines in more vehicles in the States though, even if the market here is so price sensitive. If not, really improve the OHV engines at least.

[toronado10]

Originally Posted by cfch3399

For GM: China- most favored nation. America- screw it, we're moving all production to Mexico, Canada, Australia anyway.

Basically, that's right for production. But without NA sales, GM could only sell half as many cars as usual.

[MonaroSS]

Originally Posted by Ming

Um, no, its not. Not if its the same one we get here in the Forenza.

From Edmunds:

Holden should be building new Ecotec 4-cylinder designs, not the Holden Family 4-cyl engines that have passed their prime.

Hi Ming,

I think he was meaning "price competitive". The "Family 4" engine may well be performance competitive in China as well for the moment.


.

[Slick_Holden]

I laugh at Mooney he really is a guy that is a almost.
He is on the verge of something big he is about to stamp it on the line as something real good to get into, Then he goes a touch negative and back steps takes away the stamp and holds off.

Mr Mooney said that if there was demand for V6 engines for GM in China the demand would be filled from Australia.

“The thing about the V6 engine is that we have put that plant here and invested in the capacity here.”

He said Holden was an integral part of GM Asia- Pacific and that GM “would not put in additional capacity somewhere else”.

“The capital investment is pretty high to do that, even in China. You still have to buy the same machining equipment you put in here if you put it in China. That equipment is pretty standard.

“The expensive part of building an engine is basically the capital equipment. We have relatively affordable energy and natural resources (in Australia) and we think we have an opportunity to keep that plant full by leveraging these export opportunities in the Asia- Pacific region.

“So we feel good about the growth in China and about what that means for our operation here.”

However, he said the story could be different if Holden ran out of spare capacity.
“If I have to put in new capacity, then I would not necessarily do that here. I would put new capacity right there,” he said.

When it's done I'll believe it, I'd like to see holden use what they have if they can and it doesn't get in the way of normal duties here. Gives Holden and GM some extra $$$$$ thats good.