DETROIT –Corp.’s Asia/Pacific president considers it “a shame” the auto maker has canceled plans to sell the Australia-built G8 ST sport truck in the U.S. later this year as a ’10 model.
But Nick Reilly, whose region includes the GM Holden Ltd. subsidiary in Australia that was slated to assemble the 2-door rear-wheel-drive derivative of the G8 sedan, says he understands Pontiac’s decision to hone its portfolio.
The 15,000 Pontiac G8s GM sold in the U.S. last year also were imported from Australia. Reilly tells journalists at this week’s North American International Auto Show here that Holden will continue to export the sedans to the U.S. for at least the next four years. In its first full year of availability, which will be 2009, GM has projected G8 sales in the U.S. to reach 30,000 units.
G8 ST volumes, however, were going to be much lower, likely a few thousand units annually, so Reilly says the lost production “doesn’t make a huge difference to Holden.”
Helping pick up the slack at GM Holden’s plant in Elizabeth near Adelaide is a new front-wheel-drive small car that will occupy the same production line as the popular rear-drive Commodore, on which the G8 is based.
GM Holden announced plans in December to build the small car (similarly proportioned to the upcoming Chevrolet Cruze) alongside the Commodore, starting in 2011. “We have to invest somewhat in parts of the plant to be able to do that,” Reilly says. The two disparate vehicles will require different body shops, for instance.
For years, GM Holden has imported its front-drive offerings. “We need to start building a small car in Australia to recognize changes in the market there,” he says. Large cars, such as the Commodore, generally make up about half of Australia’s market, which is leaning toward more fuel-efficient vehicles, much like the U.S. “But it’s a market that’s 40% lower than it used to be.”
Holden led development of GM’s global rear-drive architecture, known previously as Zeta, which underpins the all-new ’10 Chevrolet Camaro coupe, slated to begin production next month in Oshawa, ON, Canada. But Reilly says there are no plans to export another Zeta-based RWD car to the U.S. in the future.
The Asia/Pacific region continues to play a pivotal role in GM’s future, as growth in developing markets such as China have offset North American losses in recent years. But weakening vehicle sales in Thailand and South Korea have placed additional stress on Reilly’s mission. Halting production temporarily in Korea last year was among the “drastic actions” GM was forced to take regionally, he says.
Still, Reilly sees reason to be optimistic about GM’s prospects in Asia/Pacific. The auto maker saw record sales of 1.4 million vehicles in the region in 2008, up 2.7%. GM plants exported 766,400 completely built-up units and 599,080 complete-knocked-down kits for assembly elsewhere.
In China, GM says its joint-venture vehicle sales climbed 6.1% to a record 1 million vehicles. The auto maker’s technical center in Shanghai currently is developing a new small car for China, slated for sale at the end of 2010, Reilly says. He declines to identify the platform for the new vehicle.
In forecasting 2009 sales in China, Reilly says he expects the first six months to reflect a slight decline from 2008, but sees “positive” growth in the second half, bolstered by an economic stimulus package enacted by the Chinese government.
“Some people are more pessimistic,” he says. “As for us, I think we can continue to outperform the market for at least the next couple years. We’re pretty bullish about China, medium term.”
The third-generation Matiz minicar, engineered by GM Daewoo Auto & Technology Co. in South Korea, will come to the U.S. in 2011 as the Chevy Spark. GM currently builds the second-generation Spark in China and India. Spark sales in India made up 48% of 65,702 GM deliveries in 2008.
The new Spark, based on three minicar concepts unveiled at the New York auto show in 2007, goes on sale in Europe, Korea and India next year, Reilly says.
GM produces about 3 million vehicles in Asia/Pacific, with half dedicated for export, primarily from Korea.