Holden, known for it's massive sedans and massively appealing V8s, is on the small car bandwagon with its announcement to build a four-cylinder car in Australia to be sold alongside the Commodore. Holden currently has three four-cylinder cars, but they're comprised of rebadged Daewoo's and an Opel, and haven't set the Outback on fire. The new compact car will be based on the Chevrolet Cruze, but with a body designed by Holden, and will offer both four-pot gas and diesel options. Down the line, Holden said it will investigate ethanol-capable engines and start-stop technology for its new Corolla fighter.

Holden has a few reasons to make such a move right now, changing consumer tastes being one of the most important. The Australian government has also pledged $6 billion (AUD) to its local auto industry, which has allowed Holden to carry out its plans with less concern about the bottom line. Holden will spend $200 million (AUD) and the government will provide another $179 million (AUD). The new compact sedan will have to stave off competition from Toyota, as well as the parade of cheap Thai cars that have been flowing into Australia after the two countries concluded a free trade agreement. The new Holden will face-off against the Ford Focus and Toyota Corolla when production begins in 2011.

[Source: Drive.com.au]

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