Toyota Australia will cease its local production at the end of 2017. Toyota officials addressed workers this afternoon with more than 2500 staff expected to lose their jobs. Further job losses will follow in related component and parts making industries.
Toyota Australia currently makes the Camry, Camry Hybrid and Aurion models at its Altona factory in Melbourne.
The news was broken by the ABC and has since been confirmed in an official press release from Toyota Australia.
Toyota Australia President and CEO, Max Yasuda, said: “This is devastating news for all of our employees who have dedicated their lives to the company during the past 50 years.
“We did everything that we could to transform our business, but the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia.
“Although the company has made profits in the past, our manufacturing operations have continued to be loss making despite our best efforts.”
Last December Holden announced it would close its local manufacturing operations in 2017. Ford Australia lead the charge off shore in May last year when it too confirmed its withdrawal from local production.
It was only a matter of time until Toyota followed suit, with the Australian car buying public continuing to show a thirst for imported models.
10 February 2014
Toyota Australia announces future plan for local manufacturing
Toyota Australia today announced that it will stop building cars in Australia by the end of 2017 and become a national sales and distribution company.
This means that local manufacturing of the Camry, Camry Hybrid and Aurion vehicles, as well as the production of four cylinder engines, will cease by the end of 2017.
The decision was not based on any single factor. The market and economic factors contributing to the decision include the unfavourable Australian dollar that makes exports unviable, high costs of manufacturing and low economies of scale for our vehicle production and local supplier base.
Together with one of the most open and fragmented automotive markets in the world and increased competitiveness due to current and future Free Trade Agreements, it is not viable to continue building cars in Australia.
Toyota Australia President and CEO, Max Yasuda, was joined by Toyota Motor Corporation President and CEO, Akio Toyoda, as he made the announcement to employees late this afternoon.
“This is devastating news for all of our employees who have dedicated their lives to the company during the past 50 years,” Mr Yasuda said.
“While we have been undertaking the enormous task of transforming our business during the past two years, our people have joined us on the same journey, which makes it even more difficult to announce this decision
“We did everything that we could to transform our business, but the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia.
“Although the company has made profits in the past, our manufacturing operations have continued to be loss making despite our best efforts.
“Our focus will now be to work with our employees, suppliers, government and the unions as we transition to a national sales and distribution company. Support services will be available to our employees and we will do everything that we can to minimise the impact of this decision on our employees and suppliers.”
Mr Yasuda said approximately 2,500 employees directly involved with manufacturing will be impacted when the plant stops building cars in 2017.
There will also be an impact on the company’s corporate divisions, which will be studied over the coming months to determine what roles and functions will remain in the future.
Mr Yasuda said that Toyota was also committed to providing support to the industry as it prepares for the end of vehicle manufacturing in Australia.
“We will work with our key stakeholders to determine how to provide the best support to our employees, suppliers and local communities during the coming years,” Mr Yasuda said.
“Not only do we need to ensure our local suppliers and employees can plan for their future, we also need to make sure that we continue to produce high quality vehicles and engines for our domestic and export customers.”
Toyota Australia will continue to be involved in its local communities and employ thousands of people both directly and indirectly via its extensive dealership network.
It is the company’s intention to import the Camry and Aurion vehicles beyond 2017, along with the entire range of Toyota passenger and commercial vehicles.
4 replies on “Toyota Australia to stop local production in 2017”
Well, What do you say! Shocked but not shocked. didn’t think it would be so soon.
My thoughts go out to the men and women that go home tonight to tell families that they are no longer part of car production in Australia. Thanks Toyota! Small profits are not enough for corporate players.
No figures quoted in press release, but see below some interesting numbers quoted recently from @JoshuaDowling on News.com.au:
Toyota has accepted about $1.2 billion in taxpayer assistance over the past 12 years, which is marginally more than Ford ($1.1 billion) and significantly less than Holden ($2.17 billion) over the same period. But Toyota employs more factory workers, builds more cars and exports more vehicles than both Holden and Ford.
Over the past 12 years Toyota has posted an average annual profit of $68 million from a turnover of $8 billion, compared to Holden’s $28 million profit from an annual average turnover of $5.5 billion.
Ford has made a loss of $25 million each year from an annual average turnover of $3.3 billion over the same period. In the past five years alone Ford says it has lost $600 million, and this is what drove its decision to shut its Australian factories in 2016.
The only way we could continue to build cars was to export them in large numbers and build higher value products than we currently do.
Ford weren’t interested in exports, Holden were hamstrung by their US master and their only viable market was the middle east.
For Toyota to have made it work it needed to be building Lexuses (if that is the word) not Toyotas. Yes I know scratch the surface but the premium $ charged for a Lexus makes the difference.
Just look at the revitalised UK auto manufacturing. A very good portion of that is high value product with a perceived British heritage – Mini, Jaguar, Range/LandRover, Bentley, Rolls, Lotus, Caterham – each a premium priced product in their respective segments. Most of which is exported from the UK.
Building comparatively small numbers of pauper pack Commodores, Falcons and Camrys was not going to cut it. Sad for the workers but there was no other likely outcome in my view.
Mac135, I agree. I have said for some time that the best(probably only) option for building cars in Australia is specialised product. Labour rates won’t have an effect on luxury/supercars. Our population, and the fact we import far too many brands/models of cars, are the key issues.
It is now a chance for the government to maybe throw some money at specialist parts companies, and any legitimate Super car (Joss) manufacturer to create some sort of industry. We have some great companies doing things in the US, like PWR and I am sure there are quite a few that deserve some support.
As you say Mac135, the UK have succeeded very well in a diversified range of vehicle, incl tractors, army vehicles etc, so perhaps a study of what worked for them would be in order.
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