Major investment in ethanol fuel production in Australia and a range of greener vehicles underscore Holden's bid for a greater share of the eco-friendly auto market from early 2009.
Managing director Mark Reuss says Holden is in talks with American firm Coskata to establish Australia's first plant to produce cellulosic ethanol, made from non-edible plant material, for use in motor fuels.
By 2010, Holden will also produce locally-built cars that can run on E85 fuel - fuel made up of 85 per cent ethanol - in an effort to encourage widespread use of ethanol-rich fuel in Australia.
E10 fuel - with 10 per cent ethanol - is widely available in Australia and is compatible with a range of modern vehicles.
The fuel would be cheaper, largely renewable and would reduce carbon dioxide emissions, Reuss said.
Little start-up investment would be needed to sell commercially, he said.
"We have always said we would take a leadership position on ethanol and we're going to provide the vehicles to do that," he told a dinner in Melbourne on Thursday.
"We already have Saab bio-powered E85 vehicles on the market but there is obviously greater market pressure required to stimulate infrastructure, fuel production and policy in Australia."
Holden will modify fuel systems and recalibrate engines in its cars to run on E85 fuel and will develop cars powered by other alternative fuels, Reuss said.
Australia could lead the world in researching and developing vehicles powered by a range of alternative fuels, Reuss said. "
It (ethanol) is not the only answer but things like LPG, ethanol, maybe CNG (compressed natural gas) here, with the resources that Australia has, I think this country could really lead that," he said.
From early next year, Holden will also introduce a new range of green-friendly cars, known as EcoLine.
The range, announced last month, would eventually include cars that run on diesel, LPG or renewable energy, or have variable cylinder systems that shut down cylinders to save fuel while a car is cruising.
The company will import the Chevrolet Volt, a plug-in rechargeable hybrid electric car, to Australia by 2012.
Consumer demands and the threat of climate change was "driving a fundamental and permanent shift" in the cars manufacturers produced, Reuss said.
"The time to act is now and that's why I see 2009 as a year of transformation for Holden. Truly, this is the reckoning of General Motors," he said.
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