Toyota's export saviour

TOYOTA may have surrendered itsnumber one ranking to Holden this year, butthe pain may be eased by a return toprofitability based on strong exportearnings.

Last year the company pulled out allstops to claim the title of best-sellingbrand in Australia but its subsequentvictory came at a substantial cost as itposted a loss of $6.3 million in 2000,while arch-rival Holden pocketed acool $237 million over the same period.

This year is shaping as a differentprospect with buoyant exports raisingprospects of breaking even or turningover a profit.

"Whether we will be profitable thisyear will depend on the last couple ofmonths' activity," Mr Conomos said atthe launch of the Avensis Versopeople-mover last week.

"We're doing better than expected -we were expecting a slight loss but theaim now is to break even if possible.

"We're always under pressure withcurrency, that's a constant - it justdepends on the degree. As we speaktoday the dollar is just under 64 yen,which is relatively good for us - mostof our costings have been done aroundthat figure."Mr Conomos said the Altona-basedmanufacturer was on track to export56,200 Camrys this year - well aheadof the target of 45,000 units.

Toyota has just announced it intendsto spend $321 million on introducingthe new generation Camry (above) dueto be launched locally next October.

Production capacity at Altona willrise from 100,000 to 115,000 units inthe last quarter of 2002 to meet anticipateddemand.

Mr Conomos suggested the introductionof the new generation Camrycould pave the way to claiming a stakein hitherto unexplored offshore markets.

"We're looking at China currentlyand South Africa is under consideration.

The potential in China is small butimportant," he said.

"We've currently got test cars of thecurrent model there for evaluation -high-grade cars.

"Emission requirements in China arevery high - almost as high as California.

Our new Camry with the 2.4-litreengine will be harmonious with the US,so if we can just get the spec right theprospects are good.

"But any entry into China is not easybecause you have to obtain licences andgo through provinces and so on. It's avery different world.

"If we could crack the market, itwould be great if we could do 6000 carsin the first year.

"There is currently an embargo onJapanese vehicles going into China andthe US-built left-hand drive model isnot quite as competitive (in terms ofcost) as the Aussie-built car.

"For the US to gear up for 6000exports is like lunch money, but for usit's very important - 6000 cars on top of60,000 is 10 per cent more - that soaksup a lot of overheads.""If we specify correctly the Chinesecar and built it from day one, it is muchcheaper than converting the existingmodel."Mr Conomos said determining theright specification, meeting emissionstandards and the unknown of enteringa completely different market were thebiggest challenges.

"Normally the parent company lendsassistance with pushes into new mar-ketsbut we've done the legwork thistime," he said.

Distribution of the Aussie-builtCamrys could be handled by existingToyota dealers in China. Toyota MotorChina currently sells various commercialvehicles and Camrys and the subsidiaryis also gearing up to build theYaris (Echo) locally.

Mr Conomos had this to say about issues affecting Toyota.
The market downturn:"The forecast is for 775,000 vehicle sales this year andbetween 740,000 and 750,000 next year. Passenger cars willsuffer across the range.

"Commercial vehicles are up this year and we think thattrend will continue as more and more versatile vehiclescome in with non-passenger-car features that are attractingpassenger car buyers.

Mr Conomos suggested the "Corolla segment" (small cars)would be the only passenger car segment not to declinenext year, with the large car category being the worstaffected.

"Until the new Camry, Commodore (VY) and Falcon (AV)arrive in the last quarter we think there will be a lull in thelarge-car segment. Beyond that, we think in 2003 the largecar segment will be strong."Avalon:"It comes in for a facelift in late 2003. Its volume will beadjusted in line with the market. Demand for the new Camrywill soak up production capacity.

"Altona is capped at 100,000 units so if we were to export60,000 Camrys it would leave 40,000 Camrys and Avalonsfor the domestic market - it's a balancing act."A third product line:"It could be - a four-wheel drive or a people-mover.

Because of worldwide sourcing we have to take into considerationwhat the US is going to do and what Japan andEurope are going to do before making a decision."Formula One:"Formula One carries a youthful image. The branding isprincipally aimed atgarnering imageamong youthfulbuyers. Rallying isfinished. All energieswill go into F1.

"Our company hasno direct involve-mentwith localmotorsport fromnow on."