$300m investment secures local Toyota production

A $300 million investment to produce a new generation of conventional and hybrid-ready four-cylinder engines has effectively cemented local production of Toyotas through to at least 2020.

The investment, to be announced this morning at Toyota's Altona plant, will see the Japanese giant overhaul its local engine production facilities and tool up to build at least two new-generation four-cylinder engines.

The new 'AR' series four-cylinder engine will replace the current AZ generation that powers local and export variants of Toyota's Camry. In addition to the AR, Toyota will commence production locally of the next generation of the Atkinson cycle engine that is coupled with the electric drive system in the Hybrid Camry.

Local production of both engines will begin in the second half of 2012.

Toyota claims more than 100,000 of the new powerplants will be produced each year.

Funding for the upgrade has been secured from the Federal Government's Green Car Innovation Fund and the Victorian Government, Toyota said. No details are yet available on the relative contributions. A significant proportion of the investment will be spent on plant upgrades. Other costs include tooling for the new engines which it's believed have been entirely developed overseas.

Toyota typically runs an engine series through at least two model changes. This suggests that local car production has been secured for at least ten years under the new program.

"Securing the next generation engine provides a foundation for ongoing vehicle production at the Altona plant. It also provides Toyota Australia with significant opportunities to export the new engine to other Toyota manufacturing plants in ASEAN countries that produce Camry and Hybrid Camry," Toyota's statement said this morning.

Toyota Australia President and CEO, Max Yasuda welcomed the decision and praised the efforts of Toyota Australia's employees, unions and suppliers in ensuring the project proceeded.

"Securing the investment to produce the next generation engine is a huge vote of confidence for our local manufacturing plant and our employees, who have worked tirelessly to improve operational performance to demonstrate our ability to compete with Asia Pacific counterparts.

"The support provided by the Federal Government's Green Car Innovation Fund and the Victorian Government was a major factor in this project proceeding. A partnership between local car makers, the government and suppliers is fundamental for ensuring we evolve our industry to deal with the challenges of a carbon constrained world," Yasuda-san stated.

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