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NEWS
Mounting the case for Altona
The burning question concerning Toyota's locally-built Camry and Aurion will be settled within monthsToyota is set to decide by the middle of this year whether Altona will continue building the Camry for the next-generation model.
Based around a six-year model life, the successor to the current car will go into production at Toyota's local production plant around 2017 or 2018 – if the company stays the course in Australia.
That decision is far from cut-and-dried, in the aftermath of announcements last year by Ford and Holden that those companies will not persist building cars in Australia beyond 2017.
Tony Cramb, Executive Director for Sales and Marketing at Toyota Australia, told journalists yesterday that "the writing's not on the wall," when asked whether closing down the Altona plant was a foregone conclusion.
"That is a topic of great study in Toyota right now," Cramb responded, when asked whether Toyota could survive as the sole manufacturer in Australia.
"I think it's fair to say that Holden's announcement at the end of last year put unprecedented pressure on Toyota and our ability to be the sole manufacturer. But that study is deep under way as we speak. In order to secure that status we need to earn the next generation of Camry – with export.
"That hasn't changed. In terms of that goal, it's the same; in terms of the timing of the announcement, it's the same. We still need to compete with other plants around the globe for the right to produce that [result]."
That's the same point that Toyota's David Buttner made to motoring.com.au some years earlier; Toyota Australia has to 'compete' with other Camry-building plants around the world for the prize of continuing to build the car here. Cost remains the major hurdle for the local plant too.
A recent court decision preventing the company from varying its workplace agreements is being appealed, with the case going back to court in the second quarter of this year. But the company remains committed to two wage increases negotiated previously – both to be implemented this year. The first pay rise will be 3.25 per cent and the second pay rise will be two per cent.
Labour, according to the Toyota boss, is apparently not a major factor in the cost of building the Camry and Aurion at Altona.
"We're not looking to reduce wages," Cramb said. "There's no discussion about reducing wages."
But Cramb says that the company must find a way to reduce the cost of building cars at Altona by a staggering $3800 per unit – just to break even on an 80,000 unit per annum production rate. Two points of concern there; that's more 'fat' in the cost of goods sold for Camry and Aurion than Holden was claiming for the Commodore when it announced it was struggling to make ends meet for local production of the large family sedan.
And 80,000 units a year is a conservative figure in contrast with the 106,000 units built last year – suggesting that Toyota itself is not at all certain it can sustain manufacturing into the longer term. Certainly the Camry has experienced an 8.7 per cent drop in domestic sales from 2012 to 2013. That's why Cramb stresses the need to export from Altona.
"The decision about the next generation of Camry – with export – will be made this year," said Cramb. "It will more than likely be by the middle of the year.
"It's critical we get export... from a volume perspective."
The company is currently undergoing an 'internal transformation project' that is focused on lowering production costs – without slashing workers' wages, as mentioned already. While it seems like pulling a rabbit out of a hat, Cramb remains confident that the Australian production facility can remain viable and cost can be pulled out of the new Camry to the required extent. These cost efficiencies are seemingly to be shared with other Toyota production facilities around the world. So although the Altona plant is competing with other Camry plants around the world for the role of producing Camry for Australia and abroad, it seems like a strangely cooperative form of competition.
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Written byKen Gratton
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