Holden, yesterday, announced plans to increase capacity at its Global V6 engine plant in Port Melbourne, Victoria to its designed maximum of 240,000 engines a year.

This means the plant will be capable of producing up to 960 all-aluminium Global V6 engines each day for customers around the world.

Holden recently sought and received approval from parent company General Motors for the second phase expansion, based on current and future orders.

The $35 million expansion, which involves installation of extra machinery on the block, crankshaft and cylinder head line, is in addition to the $400 million investment to create the plant. Machines will be predominantly installed in parallel with existing machines to maximise plant efficiency. The upgrade will be completed by the third quarter of 2005.

The announcement follows confirmation that Holden would increase line production at its Elizabeth vehicle manufacturing facility from 780 to 820 vehicles a day from August 2004.

The Port Melbourne plant commenced production in November 2003 and will next month start production for the new VZ Commodore range to be launched in the second half of 2004. Holden plans to produce the engine for Holden vehicle customers in the Middle East, Korea, Malaysia, Singapore, Thailand and Brazil and other programmes are planned.

Holden Chairman and Managing Director, Denny Mooney, said the decision to expand the Global V6 plant was another endorsement of Holden’s role within General Motors.

"It is a great vote of confidence in Holden that we are able to proceed with the expansion to have our engine plant capable of running at full pace. Holden is excited about its future as a global engine production facility working with our Global V6 sister plant in St Catharines, Ontario," Mr Mooney said.

The Global V6 engine family comes in three displacement sizes - 2.8-litre, 3.2-litre and 3.6-litre. Port Melbourne has produced the 3.6-litre variant for export and will produce the 2.8-litre variant for the Korean market. Domestic specifications will be released closer to the launch of VZ Commodore.

Holden expects to generate up to $450 million a year in V6 engine exports, boosting the company’s contribution to the balance of trade to more than $1.5 billion a year.