The new model would create 1200 jobs in the car industry, Kevin Rudd said today as he announced the co-investment with General Motors Holden and the South Australian Government.
The initiative was drawn from the Rudd Government's $1.3 billion green car fund, which in turn formed part of the $6.2 billion car industry assistance package announced last month by Industry Minister Kim Carr, reports The Australian.
The Government stepped in after the car industry warned it was struggling.
Lower domestic sales have put domestic component manufacturers under significant pressure and the global financial crisis has squeezed international parent companies.
Many international manufacturers are recording losses amid the global financial crisis, and US car manufacturers have sought a US$17.4 billion ($25.6 billion) rescue package from the US Government.
The new model is scheduled to begin rolling off the assembly line in the third quarter of 2010 at GM Holden's Elizabeth plant in South Australia.
Holden chairman and managing director Mark Reuss said the new car would help ensure the long-term viability of the Elizabeth operations.
"These are challenging times but we have clear direction and from that we will emerge stronger.”
Mr Reuss said the announcement was also good news for the company's South Australian workforce.
“We are breathing extra life into our new vehicles manufacturing operations.”
The new car, part of General Motors' global Delta small car platform, is yet to be named.
Mr Rudd said: “The new car will provide Australian motorists with an Australian-made car that is around 20 per cent more fuel efficient and produces 20 per cent less in carbon emissions than current larger vehicles."
Mr Rudd said the Government would contribute $149 million over three years, starting in 2009-10, to the project.
The deal was first green car grant of funds since the launch of the Government's assistance package.
Read more in The Australian.
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