New car prices to increase under fuel efficiency standards: Toyota

Toyota Australia has given its starkest warning yet that the Toyota HiLux, Prado and LandCruiser will soon be more expensive as a result of the government’s proposed New Vehicle Efficiency Standards (NVES).

Speaking at the launch of the new hybrid-only Toyota C-HR SUV, Toyota Australia vice-president of sales and marketing, Sean Hanley, said the larger off-road-focused vehicles in the brand’s stable would initially become more expensive as a result of the proposed NVES that’s expected to come into force early next year.

While the government’s preferred option is yet to pass parliament, in its current Option B guise that calls for a 60-plus-per-cent reduction in CO2 emissions by 2029 Hanley says prices of large off-road vehicles that are designed to tow heavy loads will increase.

Describing NVES as having “a critical impact on the Australian automotive industry”, Hanley said prices are set to increase.

“On certain vehicles prices will increase, on some other vehicles they may stabilise,” said Hanley.

“But on those heavy SUVs and light commercial vehicles, on what we know today – unless [vehicle] portfolios and products change dramatically and very quickly, which I think in the timing is quite difficult and challenging – then prices are likely to go up for the foreseeable future.”

Hanley wouldn’t nominate the extent to which prices would increase, but didn’t reiterate controversial figures circulated by the Federal Chamber of Automotive Industries (FCAI) that suggested Toyota LandCruiser models could be $13,250 more expensive.

Those figures have been shot down by all manner of industry analysts and were part of a submission by Tesla to the ACCC regarding what it claimed was misleading information as it announced it would cease to be a member of the FCAI.

But Hanley was emphatic that price rises were inevitable before brands such as Toyota – which sells more off-road vehicles in Australia than any other – were able to meet strict emissions standards, or offset their emissions by selling more electric vehicles.

“Anyone who says otherwise [to inevitable price rises], I can’t understand where that could possibly be coming from,” he said, arguing that despite many LandCruisers and HiLuxes being confined to the suburbs they have been designed and engineered for rough roads and remote environments.

“There is no equivalent to a LandCruiser 300 now that can deliver on what that car delivers on in the Australian market or anywhere I know of in the world.”

Hanley reiterated Toyota’s position that it was ultimately supportive of fuel efficiency standards, but that it was calling for changes to avoid price increases, something he said will hit “working class Australians”.

“There are aspects of the NVES we can live with, there are other aspects that will make it incredibly challenging for both our dealers and our customers and working class Australians – incredibly challenging,” he said.

On March 4, Toyota sent a 19-page submission to the federal government outlining its concerns with the favoured Option B emissions reduction legislation.

Among 16 suggested alterations to the proposed legislation, Toyota is calling for scaled penalties rather than the $100-per-gram-of-CO2 fines set to be phased in from 2025.

It is also calling for heavy-duty off-road vehicles such as the LandCruiser and Prado to be classified as commercial vehicles rather than passenger cars, in turn earning them higher CO2 limits.

It comes two weeks after Toyota said it was trying to fast-track hybrid technology – as a result of the NVES proposal – to the upcoming Prado 250 Series that’s due in July.

Of course, Toyota is trying to protect its dominant position in the Australian market, including fast-growing sales of hybrid vehicles.

In February 2024, Toyota sold 8073 hybrids, which was more than second-placed Mazda (7350) sold across its entire fleet.

“Everybody’s got their own little agenda and we’re no different,” said Hanley in saying price rises on some cars were inevitable. “We’ve all got our own agenda – let’s be up front and honest about it.”

But he argued “Toyota is advocating for the adoption of sensible measures” in relation to the NVES.

The wording is unsurprisingly similar to that used by federal climate change and energy minister Chris Bowen on the ABC’s Insiders program last weekend.

And ultimately the government will decide on the definition of “sensible”.

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