Toyota Oz locked and loaded

TOYOTA has locked in its next generation of locally-built, Camry-based vehicles to be launched in 2011 – including a hybrid Aurion and, possibly, an all-new homegrown Kluger – but it seems that, at least publicly, senior executives do not share the vision of their new boss when it comes to a third model line at Altona.

“It is my dream to have a third model line,” said Toyota Australia’s new president and chief executive officer Masahide (Max) Yasuda in his first national media launch since arriving here in June.

“It is also my dream to build 200,000 cars annually, but currently we have full capacity, so in the short-term it’s not really possible,” he said at the Kluger MkII launch on Monday, before being whisked away from the day’s proceedings.

The 200,000-vehicle mark has long been coveted as a long-term annual production target by Toyota Australia chairman emeritus John Conomos, who is on record as saying a third model line is required to achieve it.

Considerably more than the nearly 140,000 vehicles it will manufacture this year (some 67 per cent of which are expected to be exported) and the 160,000 cars it plans to produce within two years, the figure is just 35,000 vehicles short of the total number of vehicles Toyota Australia hopes to sell this year.

GoAuto understands major discussions concerning future plant utilisation are now underway at Toyota, but when asked whether Toyota would follow the lead of Ford Australia, which recently announced it would produce the Focus small car alongside its Falcon and Territory models from 2011, senior executive director sales and marketing David Buttner said a third model line was not necessary – at this stage.

“Two-hundred (thousand sales) is aspirational. Frankly, you wouldn’t do it purely with the current models we are offering. You’d need to look at a third platform, but we’re seriously not studying a third platform at the moment,” he said.

“We have the capability to add a third model if we so desire, but at this stage we have no plans to do so.

“At the time we refurbished the plant for the new Camry and Aurion, we put a Global Body Line into our bodyshop and its flexibility means we could potentially build a third body on that platform.

“(But) you’ve got to remember that adding a third platform is a huge expense, so therefore you try to maximise what you’ve got. We’re looking at how we can maximise our domestic sales.



From top: Aurion and Camry production, Camry range, Aurion Sportivo range and Toyota Australia’s new president and chief executive officer Masahide (Max) Yasuda (bottom).

“You’ve got to remember Camry’s only 12 months young and Aurion was just launched in November, so the current generation still has quite some time to run and we have to continue to sell them successfully in an increasingly competitive marketplace. We don’t want to take our focus away from those vehicles at the moment,” he said.

Replacements for both the Camry and Aurion sedans have been signed off by Toyota Motor Corporation and discussions are now underway to finalise their exterior designs and major specifications. Mr Buttner said Toyota Australia had already presented styling proposals to its parent company.

“We’re currently in discussions. We’ve already been to Japan for design reviews of the next-generation Aurion and Camry, so we are proceeding with development of those next-generation products.” It is believed a feasibility study into the installation of a third model line at Toyota’s Altona assembly plant has also been conducted, but Mr Buttner said local production of the next Kluger would not be viable based on domestic consumption alone.

“Kluger’s a more expensive car and there is significant growth in the medium SUV segment, but to build exclusively and specifically an SUV just for the domestic market, honestly you’d never get your return. You’d have to look at volumes of exports like we do with both Camry and Aurion,” he said.

The first-generation Kluger, which shares its engine bay and key underbody components with both the global Camry and Australia’s Aurion, is available in petrol-electric form in the US, where it is sold as the Highlander – but the Kluger hybrid is not engineered for right-hand drive, and a diesel version is not produced.

Mr Buttner said the chances of Australians having access to a homegrown hybrid version of one of those models are “very, very strong” – regardless of which political party is in government after the October federal election.

“We’ve spoken in the past about the potential of building a hybrid vehicle locally – either a Camry or an Aurion – and we’re still very interested in pursuing that because we believe the momentum is very much there in relation to concerns about the environment and the long-term sustainability of the automotive world if we just rely on straight gasoline-powered engines,” he said.

Mr Buttner said he expected both parties to remain committed to higher-tech vehicle manufacturing in Australia, but it is believed the Kevin Rudd-led Labor party’s $500 million “green fund” pledge for local car-makers that develop technology such as petrol-electric hybrid power would make the likes of a hybrid Aurion more viable.

“There’s a lot of interest in hybrid from government, Prius sales have doubled largely on the back of increased supply and we think the time is right to try and keep pushing hard to get a locally manufactured hybrid,” he said.

“Nothing is in place yet, but we’re having some pretty solid discussions and we’ll keep having them because we believe it will give us an edge in the marketplace.

“I think that Labor has always been supportive of manufacturing and I wouldn’t expect that to change if they became the incumbent government. I think manufacturing and the auto industry has been very important to Australia and there’s the technical know-how here. So I think both governments see it as a key part of their platforms to support manufacturing on an ongoing basis.” In the meantime, Mr Buttner said TMCA would focus on increasing domestic sales and reducing its dependence on unprofitable export business. It is believed the Australian dollar, which peaked at around $US0.89 cents recently, needs to be about 10 per cent lower for Toyota’s exports to be profitable.

“We export in US dollars, so therefore with the strength of the US dollar at the moment that’s not necessarily profitable business at the moment, so we have to look at our mix,” he said. “The Middle East market is booming and in some cases, given we’re already at full capacity, we can’t fulfil the order book for some models.

“We really need to look at, over time, how can we increase our locally manufactured domestic sales, because when you’re subject to the vagaries of exchange rates on export products, we feel we need to get our mix back a bit more towards 50/50 or even 55/45 because we’re skewed a little too far towards exports at the moment.

“So therefore we have to look at what else can we do to sell more domestic vehicles.”

Read more:

Toyota predicts 1.1 million sales

First Oz drive: Kluger MkII tackles new territory

Read GoAuto's drive impressions of the new Toyota Kluger range

JULY VFACTS: Commodore back on top