Toyota "hopes" to stay in Australia

One of Toyota Motor Corporation’s most senior global executives says the company “hopes” to continue building cars at the Altona plant in Australia but admits it is in a “difficult situation”.

The stark message was delivered on the eve of the Tokyo motor show by Nobuyori Kodaira, a TMC executive vice president who made it clear continued cost cutting and government co-investment and an improved business environment would be required for Altona to survive.

“In Australian currently we are having a difficult situation,” Kodaira said via an interpreter. “However we are holding hopes that in a few years continuing this effort the situation will improve so that we can continue our production.”

Toyota Australia’s sales of the Aurion V6 and Camry four-cylinder sedans are down 21.5 per cent and 2.5 per cent year-on-year respectively as customers switch to SUVs and smaller cars, while Middle East exports of Camry have also slumped as the high Aussie dollars hits export competitiveness.

The new Abbott federal government has also stirred the unease by threatening to cut assistance to the car industry and has commissioned a review by the Productivity Commission.

Toyota’s position is also in doubt because Ford is withdrawing from local manufacturing in 2016 and GM Holden looks increasingly likely to follow it out the door.

That would leave it alone in Australia as a manufacturer and struggling to sustain the supplier base needed to build cars. The fact it is one of nine
Camry plants globally and constantly fighting to be cost competitive to ensure its export deals doesn’t help it either.

Toyota announced 100 redundancies at Altona in October and then told the workforce it wanted to renegotiate their workplace agreement as it seeks to cut the cost of building every car at Altona by $3800. A vote is scheduled on December 5.

Toyota Australia is seeking to lower its break-even point to 80,000 cars a year. It is on track to produce 105,000 cars this year, 70,000 of which will be exported.

“So for Toyota in Australia we have in order to continue manufacturing there we are co-operating with our suppliers on activities such as rationalisation, also cost reduction. We definitely think those efforts are necessary and actually those effort have already been started,” said Kodaira.

“So currently we are making a lot of efforts and so for the production in Australia I can’t give you any concrete figures. But with the co-operation between the Toyota plant in Australia and also the co-operation with the suppliers, we are making efforts with expectations that in a few years we will be able to make improvements from the current situation.”

Kodaira’s views were identical to those of Toyota’s global president Akio Toyoda, who said earlier in a brief interview: “We have a very long history in operating in Australia. So going forward, working closely with our suppliers in Australia, we would like to aim at achieving sustainable growth.

“In terms of competitiveness, that is achieved by ourselves working closely together with suppliers.”

Toyota Australia sales and marketing executive director Tony Cramb told motoring.com.au today that a decision on the next all-new generation

Camry/Aurion was due out of TMC in 2014. If green lighted the car would go into production in 2018.

Toyota Australia is also continuing to lobby for a third model line, which would provide an added chance of long-term survival if it had to go it alone as a manufacturer. A deal to build a compact SUV such as the RAV4 is believed to be the objective, as this is a booming segment with climbing sales, unlike mid-size and large sedans.

Kodaira said Toyota had “good ongoing communications” with the federal government but he would not say if they had generated any specific plans for the future of the Altona plant.

New federal industry minister Ian Macfarlane visited Toyota’s head office in Nagoya in late October after touring Altona earlier in the month.

“I would like to say that of course because this is a business we need to have economic viability in order to be able to continue the business for a long time,” Kodaira said. “So that is why we are making the efforts and also the government has been providing support to our business in Australia.

“But together with that we are hoping the Australian business environment will also be improving so with that we hope that together the central government of Australia and the country as a whole can also together co-operate into making an improvement in the environment.”

Recent investments announced for Altona include $100m from Toyota, $23.6m from the federal government and an undisclosed amount from the Victorian state government for a 2015 Aurion/Camry facelift.

The four-cylinder engine plant re-opened after a refurbishment last year that cost Toyota $330 million and the federal government $63m.

An all-new Aurion/Camry generation would be a $500m-plus investment.

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