HOLDEN and Ford have been given $95 million to develop more fuel-efficient vehicles, cleaning out the Government's four-year budget for car industry technical assistance in one swoop.

More than half the cash - $48.5 million - is earmarked to help Holden develop a hybrid-powered Commodore while Ford's $47 million will target a diesel version of its locally built Territory SUV.
"They allow us to investigate some future opportunities around powertrains and alternative fuels," said Holden spokesman Jason Laird. Ford spokeswoman Sinead McAlary said the money meant a green light for further work on diesel. "We wanted to look at new fuel options for Territory and this allows us to investigate that further," she said.

The new grants are in addition to $52 million earmarked on May 5 to help Ford engineer the Falcon replacement and a global light commercial vehicle platform.

Money pledged to Ford this month now totals nearly $100 million and this latest sum provides a further, unspecified boost for the next Falcon. "This funding is to allow us to potentially take the projects to the next level," said Ms McAlary. The next generation Falcon has yet to receive approval from Ford in Detroit, but the grants would increase its chances of going ahead, she said.

Ford is thought to be working on adapting Land Rover's 2.7-litre diesel V6 for the Territory. While refusing to confirm the program, Ms McAlary said the grant would enable more research on an alternative fuel Territory: "We need to do engineering work to determine whether it would be viable".

The Holden grant goes towards four projects involving hybrid development, researching fuel economy and alternative fuels, research into cabin design and development of its global design process.

Mr Laird said the projects were all long-term and centred on Australian-built models. "They give us the opportunity to do research for the next generation of vehicles beyond VE," he said.

The research will investigate whether a new hybrid transmission from General Motors will fit into the VE Commodore, according to Holden sources. The transmission has been jointly developed by GM, DaimlerChrysler and BMW, and claims to be more efficient than Toyota's current system.

The Motor Vehicle Producer Research and Development scheme, which allocates the money, also specified smaller sums to Toyota and Mitsubishi.

Toyota's grant of $5.15 million will go towards developing a Sportivo version of its upcoming Aurion large sedan, a replacement for the Avalon. Company spokesman Peter Griffin said Toyota lacked eligible projects, with development work for the new Camry largely complete.

Mitsubishi was awarded $1.1 million to develop the 3.8-litre V6 engine in the 380 sedan. Company spokesman Kevin Taylor said the project would focus on improving fuel consumption, performance and emissions while cutting cost and weight.

The MVP scheme gives duty credits on imported cars and parts of 45c for each dollar spent on research and development. Holden's grant equates to an R&D spend of $107 million while Ford's commitment is $104 million. Just $7.5 million remains from the scheme's $150 million allocation.

The main industry assistance scheme, the Automotive Competitiveness Investment Scheme, awards duty credits for local vehicle production and investment in production. It continues until 2015, with a $3 billion cap on payments over the remainder of the scheme.