SMALL car buyers will not be penalised when the Holden Cruze goes local, with the current starting price of $20,990 to continue.

GM Holden has hit its price line for Cruze II, confirming the showroom stickers as production begins at its factory in Adelaide.

The Cruze sedan production starts this week with a hatchback model to follow later this year.

While the Australian-built Cruze II is easily recognisable as a development of the Korean import, it has been Australianised. The major differences are in the front and rear ends which have been given the Holden family look.

"A lot of work has gone into making this an Australian car," says Mike Devereux, chairman of GM Holden. The local starter will be a CD with a 1.8-litre petrol engine, taking over from the superseded range imported from Korea, while the Cruze II flagship is a new sports-luxury SRi-V with a new 1.4-litre turbocharged petrol engine, priced at $27,990.

The starter car gets six airbags and ESP stability control, a six-speaker sound system, steering wheel controls for audio and cruise, airconditioning, power windows and auto headlights.

The new Australian-built car exists thanks to Australian taxpayers, who contributed $149 million from the Federal Government's Green Car Innovation Fund and $30 million from the South Australian Government.

Holden admits there is less than 50 per cent of local content in the Cruze but is looking to lift this.

Biggest news over the imported Cruze is Cruze II will have three engine choices, each of them four cylinders.

Following the European trend, seen on everything from the Volkswagen Polo and Golf to the new Alfa Romeo Giulietta, Cruze gets a small- capacity, turbocharged petrol engine: a double overhead camshaft unit with variable valve timing. It's good for 103kW at 4900 revs and torque of 200Nm over a wide spread of 1850-4900rpm.

As a six-speed manual it's rated at 6.4 litres/100km, enough for a 1000km touring range on a tank says Devereux, and 6.9 litres/100km with the Active Select six-speed automatic that adds $2000.

The two-litre turbocharged diesel engine optional on CD and CDX is up on power and torque to 120kW and 360Nm, with 5.6 litres/100km in manual form and 6.7 with the optional automatic.

Standard in the CD and CDX models is the familiar 1.8-litre naturally aspirated petrol engine of the imported Cruze. The Ecotec engine gives 104kW 176Nm at 3800rpm and with a five-speed manual.

The 1.4 turbo come from Europe and the diesel and 1.8 petrol from Korea.

The SRi and SRI-V sports and luxury models underline their refinement by having a new Watts-link "performance" rear suspension to go with the turbo petrol engine.

On equipment, the CDX adds 17in alloy wheels, fog lamps, leather trim, heated front seats and rear park assist over the CD.

The Cruze SRi comes with the 1.4 turbo engine, rear lip spoiler, five-spoke 17in alloy wheels, chrome touches, Watts link suspension, front fog lamps and leather-trim steering wheel.

Top of the line SRi-V has leather-faced seats, heated front seats, keyless entry and start, integrated sat-nav, 7in colour LCD screen, premium audio system and DVD player plus rear park assist. There is also an infotainment system.

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