By Rob Taylor
CANBERRA (Reuters) - The Australian arm of General Motors
As sales of large-engine family cars traditionally favored by Australians slide amid tough financial conditions and global warming fears, GM's Holden said it would build a small four-cylinder car in South Australia state from 2010.
"This redefines our future and acknowledges we can take several paths at once. We are breathing extra life into our new vehicles manufacturing operations," Holden chairman and managing director Mark Reuss said.
Sales of new motor vehicles in Australia slid 5.2 percent in November, the Australian Bureau of Statistics said earlier on Monday, the fifth straight month of falls. Sales were down a steep 17.8 percent from November last year.
Holden has not built a small car since the 1980's, but Reuss said consumers now wanted smaller, fuel efficient vehicles as the center-left government moves to introduce a carbon trading regime to slash local carbon emissions.
In November, Prime Minister Kevin Rudd lifted support for Australia's car industry to A$6 billion ($4 billion) to offset tariff cuts and the global economic slowdown, including a A$1.3 billion "green fund" for environmentally-friendly cars.
Rudd, who attended Holden's announcement, said the government would provide A$150 million to help build the car, which would be part of the global Delta small car platform.
"The new car will provide Australian motorists with an Australian-made car that is around 20 percent more fuel efficient and produces 20 percent less in carbon emissions than current larger vehicles," he said.
President George Bush over the weekend ordered Holden's GM parent and Chrysler LLC be given a $17.4 billion lifeline to stave off bankruptcy and protect jobs provided the stalled carmakers prove by March 31 next year they can remain viable.
Australia's government hopes to bolster its own domestic A$7.7 billion industry which builds around 320,000 vehicles each year and employs about 65,000 people, accounting for 6 percent of local manufacturing.
Only three car makers, local subsidiaries of Ford Motor Co
Ford reversed the planned closure of an engine plant in Victoria state after securing national government support.
Toyota said it would build a medium-size hybrid after Rudd's promise of financial help for development of green cars in one of the world's top per-head polluting countries.
($1=A$1.47)
(Editing by Jerry Norton)
