Petrol prices are plummeting. This must be the cue for an Australian car manufacturer to announce they’re going to build a small, fuel-efficient car in Australia. Yes, Holden is going to build its first smaller cars in Australia since the Camira of the 1980s. Both Holden and Ford’s domestic assembly operations are now going to have a crack at competing in the most competitive segment of the world car market – the small car segment.
The actual vehicle doesn’t exactly fill me with confidence, either; it’s the replacement for the Daewoo Lacetti and the Chevrolet Cobalt in Asian and US markets. American-designed small cars have, historically, been sub-standard, something that most definitely applies to the current Chevy Cobalt which I had the misfortune to rent when last in the USA. By contrast, Ford’s upcoming domestically-produced small car, the Focus, is a Ford of Europe adaptation of a highly-rated Mazda design. History may not be destiny, but I know which car has the better small-car design heritage behind it…
Regardless of the merits of the specific vehicle, one still wonders just how much government money it’s taking for Australian-built small cars, churned out at a rate of maybe 40,000 a year if they’re lucky, to be competitive with factories in Asia who produce cars on a far, far larger scale. Enough to pay for a lot of homeless shelters, I’ll venture.
I had a Belgian built Ford Focus which went nicely but it was a right hand drive that was poorly adapted to left hand drive, the petrol tank sits behind the driver, the gearbox is on the left etc. At the 40000 km mark it needed its regulator on the alternator changed and engine had to be lifted out to get at the part which was flown in from Europe. I am a lot more confident with Japanese designed vehicles.
I am not crazy about propping up American car manufacturers with shortsighted business plans but the car manufacturers know that if their plants close Australia loses the ability to manufacture & assemble cars. Once the factories have closed it would take a great deal of effort to rebuild the skills base to operate them at today’s efficiency.
GM really has not respect for this market expecting us to buy poorl designed cars with no environmental credentials.
Makers of big cars ought to have seen the writing on the wall a long, long time ago.
This is stupid. So Holden thinks they will compete with the VW Polo, the Fiat Punto, the Peugout 307? I think not.
They should build a 100% electric car suitable for the vast majority of city trips, which would have 30% lower emissions than the best petrol or diesel, even taking into account coal fired power.
Within 2 years these will come in from China. We have a small window of opportunity to develop this market both locally and internationally.
If only the fossil fools could see . . .
If they get it right (and that’s largely by selecting the correct source car from their overseas operations), GM-H and Ford ought to do okay. The original Torana — from the HB through to the LJ — was a small car (Opel Kadett / Vauxhall Viva), and did quite well on the Australian market, and so did the Gemini in its time (also the Opel Kadett, but sourced from Japan).
Ford did pretty well in the 1980s with the Laser (which was basically the Mazda 323 with Ford badges and different mudguards).
And who remembers that the original Commodore was a “small” car compared to the Kingswood — part of the spin for the original Commodore was that it was the same physical size as an EJ/EH Holden. Today, the “small” Toyota Corolla is the same physical size as an EH Holden and the Commodore is — if anything — slightly larger than a HZ Kingswood.
Strangely enough, the “enormous” SUVs have shrunk somewhat over the years. I drive a 32-year-old short-wheelbase Land Cruiser (two doors, three passenger seats), and noticed yesterday at the traffic lights that it’s exactly the same size as a new Dodge Nitro SUV (which has four doors and seven passenger seats), and slightly bigger than a Hummer H3.
But my old Landie looks smaller than the others, and I reckon it looks like a “proper” fourbie, not like a little boy’s oversized Transformer toy that ought to have never left the sand-pit.
Peterc: re:
Not forgetting the Hyundai i30 turbo diesel (one of which I use for my firm.)
And GMH is going to do the economical 4 cylinder by 2011? FFS, why wait when the competition has already done it? In other words, they are years behind the times and IMHO will never catch up.
The only reason GMH and Ford have survived with their gas guzzling wicked ways is because of fleet purchases by government: state and Federalista.
Let the bastard dinosaurs die-propping them up with taxpayer money and then fleet buying the shit they produce has clearly sent the wrong message.
terangeree @ 4: “The original Torana — from the HB through to the LJ — was a small car (Opel Kadett / Vauxhall Viva), and did quite well on the Australian market, and so did the Gemini in its time (also the Opel Kadett, but sourced from Japan).”
Hmmm, the problem is that Holden and Ford thought that because they built or imported cars that were good in the early 1970s for 1970s cars that meant they could mostly keep on building 1970s cars un until the mid-1980s for GM and all the way up until roughly the late-1990s for Ford drivetrain and early-2000s for the motors.
GM and Ford are run by what must be the stupidest combination of smart business, marketing and design people in the freaking universe. They should be aiming to take down BMW not shitty contemporary cars because by the time they get on stream with quality the current day BMW will be tomorrow’s shitty car.
I am definitely in the target market for such a new small car (young, single white collar professional living in the inner city) and the only new small car I would even consider is the 1-series BMW or second hand is a grey import Nissan. Everything else is an overhyped emasculated shopping trolley or boofhead chariot. There needs to be something in between the V8s and the hatchbacks. Why GM and Ford can’t comprehend this is unbelievable!!!!!!!
Ford actually created the market segment with the Mustang in the 1960s and called it the Pony Car. What they don’t understand is that Nissan, Toyota, Mazda and Honda have been building Pony Cars for the next 3 or 4 generations of consumers and have updated the concept of the Pony Car by repeating its essential qualities (smallish, stylish, generously powered, rear wheel drive, can transport four adults) in different ways.
I would love to donate my expertise to the big three so they can get their heads out of their grandfathers’ arses.
Well it is tough to decide what should be done here. The only real way to get meaningful fuel economy is to go all electric. But the technology is not ready yet. So what do you do to be seen to be making an improvement? If you build a car to carry a similar load (2 adults, 2 kids) there is little difference in the fuel consumption between a small engine working hard and a big engine cruising for the same vehicle frontal area. What I imagine has happened here is that the government has signalled that it will reduce the number of large cars that it buys for its fleet, and if that is the case then there is the basis for a small engine to which everyone can point to and say what good lads are we.
I don’t buy the “we can’t do it cheaper so why do it at all” argument. In principle there is someone somewhere who will do everything that every Australain does more cheaply. So we should just buy everything. This is what Gough Whitlam tried. And it was not long before there were a lot of unemployed, but better dressed and heeled, people pounding the pavement looking for work. The guy who invented the ball wheel wheel barrow managed to capture two thirds of the British wheelbarrow market at twice the price of the competition. Price isn’t everything by a long stretch.
My real concern is that this feels like a step in the wrong direction from an environment altering point of view. But what are the realistic alternatives?
[Ahem]
Don’t forget the original Beetle, the KG and the Type 3, Glen. I’d buy an updated version of one of those air-cooled rear-engined two-door people’s machines in a second. Santa? I’ll have an orange 1970s squareback variant under my tree, please.
No, the car.
Liam, I agree they are certainly class defining vehicles. However, Australia has a very US-centric car culture with a dash of Britain thrown in (for the mass market), while geographically we are SE Asian. Why not design and build a car that would be popular in those markets, too?
Front wheel drive turns off an unbelievable number of consumers. Simple as that. This is not a small segment of the market, but hundreds of thousands of consumers who would be willing to update for the right car or at least aspire to own one. I know they are smart enough to have done market research to know for themselves this is true.
The more general point I am making is that the big three seem to be in a very stupid place when it comes to appreciating the the relation between existing classes of vehicle and the real desire for an alternative class. They need to take the initiative and create a vehicle for the time, not simply create a vehicle that competes in an existing class. As Robert notes in the original post, they will inevitably fail if they try to build something that competes with the market leaders in the existing classes of vehicles.
SO STUPID!!!!!!!!!!!!!!!!!!
ARGH!!!!!!!!!!!!!!!!
Type 3 para siempre Liamista! I had a green fastback in the early 90s. What a great car.
2nd only in my heart to my first true love: my 1967 Morris 1100, bought in ‘88 with a UQ student loan.
Snap!
I too owned at different times a Type 3 wagon and a VW Fastback.
The Type 3 suffered a violent demise. It caught fire in Punt Road peak traffic under the Richmond (Melb) Railway Station.
I sold the Fastback to a student after it had given me several close shaves with mortality. I wonder whether he is still alive.
People always remember their type 3s. Whereas these days, everything is a ‘Ford Tedios’ – my generic term for boring modern car shape.
Incidentally, my gf at the time had a Type 3 notchback.
Fastback Torana. Nuff Said.
I know next to nothing about cars, but The Fastbacks were a great band. Their album “Zucker” is a tiny masterpiece.
Can’t tell you anything about cars, but I *can* discuss The Cars…
BilB – that is a load of tosh.
The point about the stupidity of subsidising the auto sector in Australia is NOT that some other countries are able to manufacture cars more CHEAPLY than in Australia, but that those countries are able to manufacture cars of IDENTICAL quality for less. If car companies can produce cars in Australia for which there is a sustainable market, without requiring subsidies from government, then that would be great. But if they can’t it is not clear to me why taxpayers should be subsidising their misadventures.
Whitlams’s tariff reforms are one of the most important reforms Australia has every undertaken and significantly improved the welfare of most Australians.
Here are some of the myriad problems with tariffs/subsidies for the car sector:
They are a tax on consumers.
They do more to line the pockets of producers than anyone else (those dreaded multinationals).
The jobs they supposedly protect often disappear anyway.
The resources used up in the automotive sector, if not sustainable without protection, could be more efficiently used in other parts of the economy.
That includes, as Robert indicated, social programs that address genuine disadvtantage.
The workers, that are supposedly protected by tariffs, would be better served by genuine attempts by government to retrain them for occupations for which there is a long-term future.
Whenever I hear the argument about jobs protected by such subsidies and tariffs I think to myself – even more jobs that will now not be created in other, more dynamic parts of the economy.
Subsidies should go to sectors of the economy for which there is a genuine market failure (an externality if you like) – a reason why production would be inefficiently low if it were not for the subsidy/tariff.
It is not clear to me that the argument applies to Australia’s automotive sector.
We’re all agreed then.
The car LP readers will buy will have two doors, chronic understeer, the potential for 110km/h on the freeway with a bit of persuasion, have a fast idle sound like a machine pistol being fired into a garden bed full of wet bark in a glasshouse, the leafy smell of damp in the winter and the heady smell of fuel in the summer, have a steering wheel the size of the ladies’ trophy at Wimbledon, sport a burned light orange duco to match (if you can call it that) brown fake leather seats, and despite all of these, still be the coolest damn thing on four wheels on the road.
Holden! Ford! You may dismiss all the parts of your factory concerned with any post-1965 technology. Where we’re going we don’t need… coolant.
No, let’s just become a country that manufactures nothing but instead sucks in imports using money borrowed from overseas. I mean, we’ve still got the finance industry, haven’t we? No? OK, the mining industry. No? OK, I’ll get back to you..
Instant Expert
Perhaps you could jump on to the ABS website and actually examine all the goods and services Australia exports. You could then look at what proportion of those exports are protected behind a tariff wall and reflect on how silly it is to talk about manufacturing nothing without tariffs and subsidies.
Perhaps you could then give consideration to what would have happened to Australia, and not to mention poor countries’ welfare, if, over recent decades, world trade barriers had increased rather than fallen. I’d especially like you to think about what might happend to global agricultural subsidies and tariffs if countries like Australia raised their protection rates on manufacturing, and what impact that might have on Australia’s own agricultural exports.
Then outline exactly how Australia’s current account deficit is primarily attributable to the lack of subsidies to our manufacturing sector. And top it off with a lesson on the difference between a short-term fall from commodity prices (which are still considerably higher than before the boom commenced) and the long-term impact of Indian and Chinese development on the demand for Australian commodities.
If you build a car to carry a similar load (2 adults, 2 kids)there is little difference in the fuel consumption between a small engine working hard and a big engine cruising for the same vehicle frontal area
Unless of course BilB, we’re talking gasoline 3.8 litre donk with rear wheel drive versus 1.6 litre turbo diesel with front wheel drive. (And let’s talk the torque of the diesel!)
And the “little difference” in fuel consumption (Hyundai i30 turbo diesel to Commodore v6) : 4.7 to 10 plus litres/100 km???
Sorry forgot the quotation marks, first para above.
“In principle there is someone somewhere who will do everything that every Australain does more cheaply”
Even if that were true, it somewhat counter-intuitively doesn’t matter. If the only two countries in the world were China and Australia, and China could produce every possible type of good more cheaply than Australia, then it doesn’t mean you get maximum economic efficiency by having China produce everything – for a start, it would only be able to produce for itself (if Australia wasn’t producing anything, it couldn’t pay for anything China produced), and hence Australia would also have to produce everything it needed for itself. So Australia’s resources would be going idle. Maximum efficiency would be gained by Australia concentrating all its resources on producing the goods it can produce most efficiently – even if it’s still slightly less efficient than China – and letting China do everything else.
However we’re a long way from that point, for all sorts of reasons. Australia still has many advantages over China – or we wouldn’t be substantially richer. Whether we maintain any advantage 50 years from now is a different question, but subsidising local manufacturing is no way to do it (unless, as L.O. points out, there is a genuine market failure, or unaccounted-for externality).
(Sorry, the sentence “So Australia’s resources would be going idle” shouldn’t be there – I can’t remember exactly what I meant to say, but it’s not critical).
The only real way to get meaningful fuel economy is to go all electric. But the technology is not ready yet.
Bilb, that is nonsense. Electric cars are on the road in Australia. Check out the Blade conversion. My point is that none are made in Australia, or even planned.
As Peter Kemp said, the Australian car industry is a bastard dinosaur (American father, Australian mother) dieing, but propped up with taxpayer money – the latest being Kim Carr’s $1b Green Vehicle (sic) gift that is encouraging them to “make petrol V8s and sixes more efficient”!!!! I jest not. And giving Toyota $40m cash to build non-plug in hybrids.
Government fleet buying is definately a major part of the problem.
Here are some of the major stuff ups of the myopic mismanaged Australian car industry:
* Every reasonable feature over the 60s, 70s and 80s (e.g 4 spd gear box, air etc) was an additional priced option on Holdens, Fords etc. The Japanese made them standard.
* Missed the 4WD market pioneered by Land Rover completely – Toyota and Nissan grabbed worldwide market share – despite their higher manufacturing costs and wages.
* Stopped building 4 cyclinder cars (Toranas and Cortinas) and imported and badged them – sheer laziness.
* Never offered a diesel motor option – and still don’t, except for a few imported models.
For those that haven’t noticed, oil is running out.
The only sensible long term options are methane or electric (or a plug in hybrid that does both) – but once again, both are off the agenda for our brain damaged dinosaur car industry.
I would by an electric car tomorrow, they will arrive from China in 1 to 2 years.
Warning: the following is completely and utterly off-topic.
Robert: Stephen Conroy likes your comments on his blog. Unfortunately, he’s decided to extend his HTTP filtering to peer-to-peer.
First car: VW Beetle, a lovely thing and a joy forever. Much, much later: “Holden” Barina, low fuel consumption but felt very light (flimsy?). Fully imported but Holden badge glued onto it??
VW: there was a painting “Our First Love” depicting loving couple reflected in shiny vee-dub hubcap. Redolent.
Bought a cheep Beetle in England in 80s. Vendor informed us we must toot once upon seeing aother beetle; twice if its colour matched ours [sky blue]. Love affair reignited.
Whaddawe want? Air-cooled! When’ll we geddit? …….
Actually Holden built the Vectra in Australia in the late 90’s. It was canned during the Tech Wreck financial crisis (remember that one). I just hope that Rudd & Co as part of the agreement make sure Holden market the bloody thing well this time. Then they can’t can production, claim it wasn’t profitable and continue to build the Commodore solely, claim it is what Australia wants (because no-one buys the smaller car) and the export dollars are worth it.
Peter K – the Hyundai i30 turbo diesel is very impressive. Good power and fantastic economy – 4.5litres/100km! I am considering buying one, as an electric car is nowhere in sight.
Good point 2353. We are now in the era of corporate welfare. Capitalism has just failed. Globalism is on the skids. Now are taxes are getting handed over to global car companies (Ford, Toyota and GM) and to coal fired power stations and aluminium smelters.
The Rudd and Carr green car fund ($1b) will get pissed up against the wall of more corporate dinosaur stupidity. The solution is for the government to get a seat on the board and/or majority control of the company. Otherwise they take our money, give a few platitudes and keep producing more lemons, telling us all the while we want them.
The MIEV (Mitsubishi In-wheel motor Electric Vehicle) will be available in 2009.
The GM Volt will be built in Detroit in 2011 – but there is no date for importation to Australia.
Apparently this won’t be made in Australia – it should be rather than just another 4 cyclinder car.
We have zero political and industry leadership. Zip.
That MIEV is impressive. Reminds me of the GM AUTOnomy concept of 6 – 8 years ago.
regarding government subsidies for car production, it seems to me that every country does it – so in a race to the bottom / lowest common denominator argument, I’m accepting that if we want to produce ETMs then they appear to require government subsidies, and I’m mostly OK with that, as long as we’re getting socila outcomes as well.
It’s not really Ford and Holden’s fault regarding car design. When you’ve got factories and staff for rear wheel large cars, it can take a long time to convert them to something else. And consumers wanted them.
I happen to think, that if petrol had no external environmental costs, the Commodore and Falcon are fine cars for their price, excellent quality and features for $35 000. Not that I would ever own one.
One thing I want to know – why are wing mirrors still in existence? They seem to impose a big drag burden and there are very acceptable electronic alternatives now available cheaply.
Wing mirrors could go. They are an artifact from a previous age.
Here is another electric car option, made in China F3e made by BYD AUTO
This vehicle is not yet available in Australia. Could be soon though.
MIEV: Want. And will put fluffy dice on.
Wilful, as motorcyclists have known for a century, wing mirrors are a bonus, stuck on for legal compliance only. If you want to know what’s behind you you turn your head and look.
Here is another option that would be good for Australia if was a plug-in hybrid – but Toyota have only done it as a prototype.
[Toyota Camry CNG Hybrid]
CNG is a much better fossil fuel alternative than petrol, diesel and LNG. We have a lot of natural gas reserves.
I checked with Mitsubishi Australia – there is no commitment to bring in the MEIV to Australia in 2009 – it is “still undergoing testing in Japan”. So it looks like 2010 is more likely. I asked them to hurry up.
I can’t find anyone with committed import dates yet for Chinese plug-in hybrids either. Chery is another Chinese make that may come in soon.
Actually. Liam, I find the wing mirrors (well, they’re actually on the doors) on the ute invaluable when I’m trying to back a trailer into a tight spot.
I agree about their “utility” on a motorcycle, though – marginally less useful than an ashtray.