A new small-car model to be built by Holden will help stimulate economic activity in Australia during the global financial crisis, says Prime Minister Kevin Rudd.
The four-cyclinder, fuel-efficient car will be built at the company's north Adelaide plant from late 2010.
The federal and South Australian governments are contributing the equivalent of $NZ212 million to the project.
Mr Rudd says the investment will help sustain Australia's industry.
Meanwhile, the opposition Liberal Party says the spending measures of the government are sending confusing economic messages.
There has been a series of packages to stimulate the Australian economy, with money for the automotive industry, infrastructure, local government and consumers.
The government is also getting a razor gang to trim government expenditure in the federal budget.
But deputy opposition leader Julie Bishop says the moves are contradictory.