HOLDEN Sales Fall Because of SIDI..

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Taking the fuel-efficient route has seen rivals catch up to the Commodore but the future looks bright thanks to the US.

Holden's decision to fit a smaller, more efficient engine to its Commodore range appears to have backfired, with sales slipping since the introduction of a new model in late September.

In its first three full months on sale, the Commodore recorded less than 12,000 sales, compared with more than 13,500 in the same period last year.

The 13 per cent dip in sales is in contrast to the rest of the new-car market, which bounced back strongly in the last quarter (up 12 per cent on last year) on the back of tax breaks delivered through the Federal Government's economic stimulus package.

Typically, the arrival of a new model causes a spike in sales but the model year 2010 Commodore, the first major update since the 2006 launch of the VE, has struggled to find its feet.

At the same time, the arch-rival Ford Falcon has enjoyed a 7 per cent lift in sales.

The dip comes despite deep discounts on the new Commodore. Holden has been running a drive-away promotion on the car, with a discount of about $8000 off the on-road price combined with $7500 worth of extra equipment.

The Commodore, the top-selling car in Australia for the past 14 years, has also lost ground to the Toyota Corolla small car and the HiLux in recent months. The Corolla was the nation's top seller in October, while the HiLux was No.1 in November.

Toyota's vehicles have toppled the Commodore from the top spot for five of the past seven months.

Holden switched to a 3.0-litre engine on its cheaper Commodore models in an attempt to steal the high ground on fuel efficiency over the rival Falcon and the Toyota Aurion.

But in real-world testing conducted by Drive, the smaller engine has proved thirstier than the Falcon fitted with an optional six-speed auto.

Holden managing director Alan Batey admitted this week that the new model had exprienced a slow start.

"Two things really hurt us," he said. "We didn't have the International [special edition] until the middle of November so we had a gap of what we call our retail offer for about six or seven weeks so we didn't capitalise on that.

"And secondly, in the end, we didn't have enough cars out there. We have been very cautious in making sure that every car we build has a customer name, a customer sold or a dealer name on it. So we were probably overly cautious."

He said the company had underestimated the strength of the recovery in the Australian car market in the last quarter of 2009, and had run short of stock.

But as a result the forward-order bank was "fantastic".

He rejected the suggestion that the shift to a more frugal V6 engine had turned traditional Commodore buyers away.

Commodore has always traded heavily on its motorsport and performance image but the new model fitted with the direct injection (SIDI) 3.0-litre engine is significantly slower than its Falcon and Toyota Aurion rivals.

"Look, SIDI to me, you have to be realistic. We are at record high segment shares on large cars anyway," Mr Batey said.

"The real appeal for SIDI is clearly going to be in fleet and that takes time to see the benefits of that commercial program. You don't just launch and, bang, you are back on every choice list.

"And also with fleet buyers, they have been pretty cautious in their purchases."

Fleet buyers make up about 75 per cent of all Commodore sales.

Commodore fleet sales are, however, expected to come under renewed pressure when Toyota launches a hybrid version of the four-cylinder Camry next month.

Toyota says fleet interest in the locally built hybrid Camry, which is likely to undercut the Commodore on price, has been so strong that the company will struggle to meet demand.

The hybrid Camry is expected to be at least 20 per cent more fuel-efficient than the Commodore.

Commodore's domestic woes are in sharp contrast to its rising fortunes on the international stage. A special police version of the car is expected to be exported in significant numbers to the US, while GM heavyweights are flagging the possibility of a major export program that would see performance versions of the Aussie icon sold with Chevrolet badges.

With Bruce Newton

Source: The Sydney Morning Herald