General Motors’ Australian division Holden has today announced the building of a new small car at the companies plant in Elizabeth in South Australia.

The new car which at this stage has not been named will be built on the company’s global Delta platform was announced by Australian Prime Minister Kevin Rudd whose Government has provided the Australian Auto Industry with millions of dollars of financial assistance.

The new car will be supported by the Australian taxpayer with the Commonwealth contributing around$149 million over three years starting in 2009-10 to the project. Money will also come from the South Australian Government.

A great and visionary leader, with his father and Kevin Rudd

 Mr Rudd says the move gives confidence to a struggling industry. “If you look at the downturn in auto sales in the last 12 months, this is really tough,“ he said in a yet another triumph of stating the bleeding obvious.

The new front-wheel-drive vehicle will be built in both sedan and hatch form, with design and engineering work takeing place at the company’s Australian headquarters in Port Melbourne, Victoria.

Although firm details were few, the company says that a number of eco-freiendly, “Green” technology features including start-stop hybrid technology and the capacity to run on alternative fuels such as E85, diesel, LPG and Compressed Natural Gas (CNG) would all be considered for the vehicle’s development.

Holden released artists sketches of what the project may look like but I’m willing to bet that when the real deal eventually surfaces it won’t be anywhere as sleek as the concept on the sketch pad.

The new car will be GM Holden’s first locally produced car beyond its current range of larger Commodore vehicles since the Vectra ceased production in 1998.

GM Holden Chairman and Managing Director, Mark Reuss said the announcement provided opportunity to take a leading role in developing alternative fuel and fuel saving technologies in Australia for Australians.

“Together with Government, we are extending the scope and consumer appeal of our local manufacturing efforts,“ Mr Reuss said.

“Just as our leading Commodore range will continue to undergo technological development, this new vehicle will cater for growing demand for smaller cars focussed on economy.”

Mr Reuss told reporters that far from cutting back, the company was  planning to produce a wider range of cars in Australia to cater for a variety of specific local driving needs.