Commodore VZ Euro III update

It marks a reversal of earlier Holden assurances that the company would re-engineer the current Gen III V8 as a temporary measure to get past new Euro III emissions and noise regulations that will apply in Australia from January 1, 2006.

Many European and Japanese models already comply with Euro III, some even meeting Euro IV, but for the full size local models made by Ford and Holden, the new rules have presented a costly and demanding challenge. Not only do they feature stiffer emissions levels, the new rules demand comprehensive self-diagnostic functions that must remain effective for the life of the car.

For the first time in Australia, they also add strict new emissions requirements under sub-zero temperatures which in most cases require a different approach to exhaust systems and catalytic converter location. They also demand a two decibel drop in noise levels, a margin substantial enough to place pressure on power output and fuel economy. Apart from expensive software upgrades, the new rules can dictate costly new wiring looms capable of handling the extra functions.

Holden's dilemma is that the new VE series has been delayed until September 2006 or later which leaves the VZ requiring Euro III compliance for a very short sales life. Holden was quoting six figures to prepare each VZ Commodore V8 model for the new rules, a big factor that led to the early retirement of the Holden Monaro. Holden's new Alloytec V6 engines released with the VZ series in August 2004 were designed for Euro III compliance because of European exports but the US-sourced Gen III V8 was another matter. Because of low V8 volumes, Holden intended to certify only the biggest-selling Gen III V8 models in the VZ series for Euro III then wait to add the new Gen IV engine as part of the VE series.

So what has caused the about face? The VE has been delayed and is at least 10 months away leaving a long, drawn-out VZ model clearance reminiscent of Ford's dark days during its agonizing 1998 EL Falcon clearance. A worrying slip in showroom interest has forced Holden to revitalize the VZ range which needs and will probably get a Series II freshen-up for January 2006. Big delays in the VE commercial range and wagon which won't reach buyers until well into 2007 at the earliest have since forced Holden to update the current VZ wagon and commercials to take the new Gen IV V8 ready for release with the new VE sedans. However, Ford's recent moves have generated an opportunity for the VZ to gain a second wind.

The BF Falcon facelift was effectively Ford's Euro III update and left several flanks exposed for the embattled Commodore.

Although the BF generated a huge lift in refinement with welcome boosts in power and economy for the mainstream sixes, few buyers are able to pick its front and rear styling changes which has left the door open for the VZ to make a comeback. Several of Ford's important hero V8 models including the vital V8 utes, the XR8 and the FPV GT emerged from Euro III without the hefty power increases of their six cylinder stablemates. This has left Holden a golden opportunity.

A version of the Gen IV V8 is already fitted to HSV models in LS2 high performance specification. Holden made a commitment to keep this hot Corvette C6 engine exclusive to HSV. However, this commitment did not include more basic versions of the Gen IV engine. Because of a larger six-litre capacity, even the base Gen IV version can deliver more low speed torque than its Gen III predecessor which would give it a clear advantage over the smaller 5.4-litre Falcon V8 option and XR8. Because the Gen IV engine is more efficient, it should also deliver better fuel economy, another reason for bringing the new engine forward.

Late in 2004, Holden introduced a new M12 six-speed close-ratio manual and a heavily revised 4L 65 four-speed auto with a hotter 260kW Gen III engine but only in its VZ Monaro. Holden left its VZ Commodore SV8 and SS hero models to languish with the softer 250kW Gen III V8 and flawed earlier transmissions. As sales suffered, Holden was forced to offer the SS-Z limited edition to clear 2005 stocks but there is most of 2006 still to go.

With no Monaro in 2006, Holden is now under pressure to restore its hero SV8 and SS models against a powerful new 245kW Falcon XR6 Turbo and 260kW XR8, both now available with state of the art six speed manual and automatic transmissions. It would make sense to offer the new V8 engine with the Monaro's upgraded transmissions to dominate a market that Holden once owned. Expected power figures would be around 260-265kW to keep it clear of HSV models.

CarPoint believes the combination of the Ford BF upgrade with its gaps, the loss of the Monaro, the rise in fuel prices and the delay in the VE commercials and wagon, all point to one outcome. Holden has no choice but to launch the new V8 engine in January 2006 across the VZ range ahead of the VE launch rather than waste money on compliancing the Gen III V8 for a 10 month sales life. There are precedents when the VT's Ecotec engines were launched in the VS Commodore and the Gen III V8 was launched as a VTII Commodore.