Diesel-powered HSVs? Commodore hatches? All possible, says Holden boss
Extracted interview from Detriot Motorshow 2003, www.carpoint.com.au

Holden chairman Peter Hanenberger talks about exporting to Europe, producing the Commodore hatch, diesel powered Commodores and HSVs, and why Holden will skip hybrid technology for fuel cells.

CROSS HEAD On producing the SSX Commodore hatch concept car revealed in 2002

Q. Carl Peter Foster, the head of GM-Opel Europe, isn't convinced about the need for a conventional four-door sedan for Europe. Foster said he would be very interested if Holden could do an innovative body style, which seems to fit pretty well with the SSX, (Commodore-based hatch). Would an interest like that give you more of an excuse to go ahead with that car?

A. No, I don't think it would be dependent on Carl Peter Foster or Opel. I strongly believe that we will most probably integrate this in one of our next platforms. Would we like to do this earlier? Yes, but we just can't do it because we have our limits and we are working to our limits. This body style has a big chance for the next generation.

Would it be a good style for Opel? I don't know. I am myself an Opel guy by heritage - I don't know. Germans still like limousines, sporty limousines. They still buy a lot of them, like Mercedes and BMW. Hey, we have a very good platform. North America has a lot of interest in this platform and now we have the interest even from Opel. Whatever we can do now to leverage and synergise, I am very interested in that. And the SSXE we will see a more modern one on the next platform.

Q. Is there an opportunity then for a North American approach in Germany, where they take the platform and use it with their own sheet metal over the top? Are you talking about that kind of concept?

A. I don't know yet, because I was a little bit surprised. I know that Opel is kind of interested, but they always hide things behind their walls. So how this all works ultimately I don't know. They would get a car then from America, or Opel could tool up or we could do something - it is still early days. But for me it is important that they are all interested.

Q. In the next platform, the next generation car, let's say there is considerable interest from overseas. Would you then predicate your business case on a percentage of income from that or would you continue to have a business case based solely on the Australian domestic market?

A. It's very dangerous if you take a business case and put everything in it. I would not like to do that. I made this very clear over and over. We have to make our living in Australia. We have to develop strong domestic product, which is where ultimately the profit should come from for us to stay alive.

The rest you take as a kind of windfall situation, because the worst thing for Holden - remember we are tiny dwarfs in the global scheme - would be if you based your total business case on everything and then Opel pulls out and America pulls out and suddenly you're standing there with all the capacity and nothing to build - you are dead. Mitsubishi Australia, Saab was in a very similar position when the North American market died; they had 50 percent of their volume here. So, very clearly, whatever we do the base platform has to have its living in Australia or at least in the Asia Pacific area.

Q. In Australia do you feel hamstrung by the reliance on fleets in your ability to introduce innovative body styles? Fleets being conservative and making up most of the domestic market.

A. Not at all. Because the fleet market is a big market but don't underestimate the retail market. And Holden has about 18 or 19 percent market share in the V car (Commodore platform). And we believe by introducing all these models just here now, we will increase this even further. So I don't think fleet will be a road block for innovation and different body styles. I don't think so because our target must be to get as many retail as we can.

CROSS HEAD On filling the compact SUV gap in Holden's Australian lineup

Q. You have had a good look around the Detroit show and you have seen a lot of vehicles. Is there anything that you'd like for Australia and that you could actually get?

A. Not at this time, no, and we are pretty clear on this issue now. The only vehicle that we will have together is a future SUV. That is one vehicle and it could it be on a Daewoo platform. We would like to have the Envoy, but it is not available in right-hand drive.

Q. Is that the Trailblazer?

A. Trailblazer - yes. Trailblazer in the short wheel base and I mean this week we saw the Equinox and that's the one we are probably most dreaming of doing together with Daewoo.

Q. How frustrating is that mindset in GM that right-hand drive is not necessary? Equinox for example, Envoy.

A. It is very frustrating to be quite honest. It is frustrating because we would need Europe to make it happen, but Europe is into vans, they are into Zafiras and they are not into SUVs. When you look at the total Asia Pacific area, there is not a lot of SUV market.

So we are always by ourselves and so this is why I would wish myself the day that somebody would decide to, would proceed to do it strategically. When they are designing a vehicle from new, design it in right-hand drive. But somehow they always do the business case and the volume thing and we don't get it through. Very frustrating. But that's why we did our own now.

Q. Does the Monaro that goes to the States as a Pontiac, thus bringing attention back to Australia, help you in that course?

A. No, it doesn't because Bob Lutz tried also to help us there in the last six to eight months, but it always comes back to the business case. Because when we come along with our volume, it is very small and it just doesn't make sense. So the decision has to be strategic.

CROSS HEAD: On building the Gen IV V8 locally and diesel-powered Commodores

Q. The six-litre V8 (Gen IV) sitting out there on display; are you going to build that in or import that in? You were talking about building it locally.

A. I know. I tried three times so far but at this time the capacity is not utilised here in North America. When we started the first time and we could not get enough engines into Australia because the US market was still moving lots of V8s. Now with very low percentage of market share they have a lot of V8s coming out of their ears. That's why they won't listen to us at the moment - it is still in our agenda and still in our business plan to hopefully localise the V8.

Q. Would Holden look at displacement on demand?

A. Displacement on demand could be definitely coming into Australia in the near future in one of our engines - we are thinking of this very hard already and this could happen, I would say, within the next three years.

Q. Would you have a five-speed auto in the next generation car?

A. I would definitely say that we would have a five-speed automatic transmission - exactly when is a little bit uncertain but we will definitely have a five-speed.

Q. And diesel, VZ or VE?

A. We would need more help from perhaps the government to make diesel more attractive, like they do in Europe, with policy, the taxation structure and the fuel rebate relative to petrol.

Q. Have you seen any movements on this behind the scenes?

A. We have had some first discussions on this, but we have not really pushed on this yet as we are unsure if diesel would be a strategy needed in Australia. But the more I think about it, we think about it, the more I see what is going on here. I think it will be a very important thing. And because our imports all already have diesel versions, our Achilles' heel is our locally-built product.

Q. Would you have to do some consumer hand holding to re-educate them?

A. We did the same in Germany. Germans wouldn't touch diesels. It was a French kind of vehicle with a diesel engine. And Italians had diesel. But Germans wouldn't touch it. Today 45 or 50 percent of all sales are diesel.

Diesel doesn't smell anymore, diesel is in the same panel at the gas station. There was a lot of promotion about diesel, and how good it is, from the oil companies, so there is some marketing needed in Australia. Then of course you have to get people driving it because diesel drives like a passenger car today; it doesn't have the black smoke etc.

Q. And what about high performance diesel? Like a HSV diesel.

A. Could be done. Not a problem. Brabus is the high performance guy in Germany for Opel and we could have high performance diesels.

Q. Are you thinking of rolling the diesel out first with the Cross 8/all-wheel drive range before you go into Sedans and traditional passenger cars with it?

A. Yes, it would definitely be in the commercial side first. I think that would be our strategy. We could go out to farmers and mining businesses and all - that's most probably how we would start. But if we started on a diesel it would be on a very high sophistication, because we cannot fool anybody. It has to be right form the first place.

CROSS HEAD On petrol-electric hybrid technology and fuel cell vehicles for Australia

Q. Rick Wagoner unveiled the alternative fuels strategy for General Motors at Detroit. What implications does that have for Holden and what will we see in terms of alternative fuels in your range?

A. We are pretty much doing what the Europeans are doing. They are basing most of their business on internal combustion engines. They have a great strategy going now which is diesel. In Europe about 45 percent of all the cars being sold at the moment are diesel - 45 percent. They are very clean engines, they have no nitrous oxide, they have no hydrocarbons; they have a little bit of carbon monoxide. The particulates are handled with direct injection and the rest is now caught in traps.

So if we would have to build a bridge it would most probably be a diesel engine. I believe there could be a diesel market and then we would go directly to fuels cells. The only difference most probably - and we want to talk about this when we talk about our innovation centre very soon in the first quarter - we would go with fuel cells, but with a different kind of technology behind it - which would be Australian.

Q. What do you mean by that? Do you mean Australian-designed and built drivelines for the fuel-cell drive lines or do you mean controlling electronics?

A. It's capacitors. Everybody today uses batteries to get the discharge you need on acceleration when the fuel cell doesn't deliver enough power. And what we are thinking at this time is that we combine the fuel cell with the capacitor, which we did with eCommodore and this technology is an Australian invention. They are fairly advanced in it, its charge and discharge is its strength. So you don't need batteries, which means you can take a lot of weight out and get the power when you need it, and store it when you don't need it. That is where we think our kind of vehicle will be; fuel cell technology with capacitors.

Q. Is the capacitor working in conjunction with the CSIRO?

A. Yes. We are on one program and ultimately the fuel cell we do together. They are still working on high-performance acid batteries, and we are working on capacitors. And then after two or three years we might merge and go with the best.

Q. Which you think will be capacitors?

A. Capacitors - very clear otherwise we would not do it.

Q. How readily will fleets accept fuel cell?

A. I have no idea. The thing is everybody had every argument when the steam engine was started and they could not see the combustion making way. Daimler and Benz had this thing going up and down and everyone said: "Nonsense! The steam engine is the thing for the future," because there was a need for petrol and refineries and how can it work?

Then it happened. The combustion engine is the major powerhouse of the car today. Now, we are in the next revolutionary stage where the combustion engine will be ultimately replaced by the fuel cell. It has to be because fuel is finite, this is a globe which has finite elements, so you can calculate how long petrol will last. You have hydrogen you can generate from water, the globe has plenty of water around to do this and there is no reason why the oil companies should not change their structure ultimately from gasoline into hydrogen. It is the same thing like the move from steam to gasoline.

Let me now go out 20 or 30 years; I still believe nuclear energy has to come back on this planet for the long-term. There is no reason why, long-term, nuclear energy can't be handled in the same way as we do with petrol today. So that's my vision. And I am pretty sure we will see some major announcements in America along these lines, with oil companies and fuel cells and hydrogen and hydrogen stations and things like that.

Q. Do you think that using the transformer-based technologies for extracting the hydrogen from petrol is a positive intermediate step in fuel cell technology, or is it better just to leapfrog straight to pure hydrogen from fuel cells?

A. We would like to leapfrog. And we have to start this discussions in Australia with the oil companies on board. Hydrogenation is very costly - it can be done but it is very costly. There is no reason why all the refineries should be written off. These refineries have been working and when you look to the profits of the oil companies they are not small. So there is no reason to not use some of the money like Holden is doing and start to invest in future technology and to generate hydrogen instead of taking raw oil or crude oil and making it into gasoline and diesel and all of that stuff. There is a mind block, a road block, at the moment that has to be knocked off.