Toyota Oz opens $330m engine plant

Toyota Australia has officially opened its $330 million engine plant in the Melbourne suburb of Altona.

Situated alongside Toyota’s existing vehicle assembly plant, the brand-new factory will produce about 108,000 four-cylinder engines for both the Camry and Camry Hybrid sedans, making Toyota the first car-maker in Australia to produce both petrol and hybrid engines.

An imported version of the 2.5-litre engine, which will also power next February’s new RAV4, has been fitted to Toyota’s locally built Camry since December 2011 and the new Camry Hybrid since March this year.

Toyota said it will begin full production of about 108,000 examples of the new engine annually at Altona from January 14, equating to about 450 engines a day.

Significantly, the more powerful and efficient new engine, which in the latest Camry helps reduce fuel consumption 11 per cent, will also be exported to Thailand and Malaysia, with more than half of all production earmarked for export.

Toyota became the first local car-maker to achieve one million export sales in August, and will notch up production of three million vehicles in Australia later this month.

In development since October 2011, the new plant replaces the first Toyota engine factory to be built outside Japan, in 1978.

It was built with the help of $63 million from the federal government’s now-defunct Green Car Innovation Fund, and further assistance from the Victorian government.

“An ongoing partnership between local car-makers, the government and suppliers is fundamental for ensuring Australian industry can compete,” said Toyota Australia President and CEO Max Yasuda.

Motoring understands that investments like the $330 million engine plant are made by Toyota for a minimum of two model cycles, and Toyota has confirmed it commitment to Australian manufacturing in Victoria beyond 2016, when the next-generation Camry is due.

That means that like GM Holden, which has confirmed plans to manufacture vehicles in Adelaide until at least 2022, Toyota will continue to produce cars in Melbourne until well into the next decade. Ford Australia, meantime, has committed to local production in the same city only until 2016.

Although Toyota Australia’s sales are up 18.6 per cent overall so far this year and Camry sales have lifted a substantial 34 per cent (sales of Toyota’s other Australian-made model, the Aurion, are three per cent down), today’s good news follows two years of pain

Toyota suffered a 15.4 per cent sales slump last year, when sales of the Camry and Aurion were both down by around 24 per cent, due to supply constraints following the Japanese tsunami and flooding in Thailand.

Earlier this year Toyota workers held industrial action over a new enterprise bargaining agreement, before the company decided to slash 350 jobs at Altona – 10 per cent of the workforce – when production forecasts were slashed from about 120,000 to 95,000 units, mainly due to a slump in Middle East exports.

Last year Toyota Australia produced about 94,000 vehicles – down 36 per cent from a pre-GFC 149,000 in 2007, while Toyota Australia posted its third successive after-tax operating loss in June this year, when a deficit of $32.6 million was announced for its financial year ending March 31.

Today’s factory opening was attended by Australian Prime Minister Julia Gillard, Victorian Premier Ted Baillieu, Federal Minister for Industry and Innovation Greg Combet, Victorian Minister for Manufacturing, Exports and Trade, Richard Dalla-Riva, Toyota Motor Corporation Senior Managing Officer Seiichi Sudo and the Japanese Ambassador Yoshitaka Akimoto.

Toyota said the new “simple slim” engine plant – the first of its kind outside Japan - houses more than 350 new machines, including 135 from Japan, and employs technology designed to make its operation simpler and more flexible than other similar plants.

“This is a great day for Toyota Australia,” said Mr Yasuda. “The official opening of the new engine plant is part of our overall mission to transform our operations and build a more sustainable business.

“We are now one of only four countries in the world to produce the AR four-cylinder engine.

“I am a true believer in local car making. We are working to create a new, stronger business that gives us a competitive advantage that is sustainable and profitable for the future. Building a new engine plant in Australia is at the heart of our manufacturing strategy.

“The new engine plant is a significant milestone for Toyota Australia. It enables us to maintain our workforce and further develop our technologies, skills and products so we can continue building engines and cars in Australia for many years to come.”

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