With a base investment of $400 million growing to $700 million by mid decade, the Holden engine plant and supporting infrastructure will position Australia as a technology leader in the Asia Pacific.

This new investment adds to the over $400 million Holden is already committed to investing in capacity expansion, tooling and related manufacturing infrastructure in South Australia over the next five years, as the company continues to expand its ambitious product portfolio.

The all aluminum high technology V6 engine will power future generations of Holden Commodores. The engines will also be exported in high volume to a variety of world markets and respected automotive brands.

Export revenues will amount to $450 million per annum during the life of the new plant and will deliver the opportunity for Holden and our supplier family to grow with our new export customers.

The new V6 engines will spearhead Holden's ongoing vehicle export drive to a growing number of global markets demanding the latest in high technology powertrains and automotive sophistication.

Announcing the decision today Holden chairman and managing director Peter Hanenberger said that the new engine plant secured Australia's automotive future and positioned the nation to continue to compete with the world's best.

"This engine plant was won for Australia against the strongest of global competition and places beyond any dispute our status as a world competitive nation," Mr Hanenberger said.

"It clearly recognises that we have the skills base and infrastructure in place to justify such a significant investment here in Victoria," Mr Hanenberger said.

"The decision to locate the new plant in Victoria is clearly the correct one for Holden's future following extensive analysis of a wide range of independent studies commissioned by Holden.

"It was also an extremely close decision with each option having its individual strengths. Holden spent many weeks weighing up the factors involved to ensure the final decision was the right one.

"The important perspective to place on the location decision is that it is a huge win for Australia, and is a big plus for the national economy through both domestic and export activity.

"The new plant will open up exciting job and career opportunities and provide an ongoing incentive to young Australians to take up high technology studies in the future.

"As we look to the future of our automotive industry, it was hard to determine how it could continue to be a world competitive industry without winning this opportunity to place a firm footprint of technological leadership, here in the Asia Pacific.

"This new investment adds to Holden's existing engine capabilities.

"Holden has been producing engines for 60 years and a leading exporter of engines for decades. The new plant is an expression of Holden leadership which will ensure that Holden will continue to generate exceptional levels of export activity far into the future.

"This engine plant will consolidate further, Holden's position as Australia's foremost exporter of manufactured goods.

"To turn such an investment opportunity into a reality, Holden has worked closely with potential partners, suppliers, unions and government to ensure the best possible outcome.

"The intense and constructive involvement of the Victorian and South Australian governments has been a major enabling factor in making the project a reality, and it is clear that either state could have provided a successful home for the new plant.

"I would also like to acknowledge the role of the Federal Government in the process. In particular, ACIS - the Automotive Competitiveness and Investment Scheme - which was a crucial element in attracting the engine manufacturing facility to Australia.

"Holden had to be certain that the project delivered against the fundamentals:

• a timely completion of the project to ensure our obligations to our export customers are achieved;
• internationally competitive work practices in partnership with employee and union representatives, and
• ensuring the extremely high expectations of our domestic and export customers are met.

"This announcement today marks the beginning of a complex process that will see 900 engines produced per day with the first engines exported to our customers in 2004.

A team of Holden manufacturing and automotive engineers will work with key suppliers and contractors over the next three years to bring the new engine plant project to completion. Work on the site will begin almost immediately.

In 1999 Australia's total automotive exports reached a record $3.2 billion, with Holden contributing $955 million.