Fuel hike: Camry to cash-in at Aurion's expense

TOYOTA has revamped its Altona production plant to increase build rates of the new-generation Camry four-cylinder should high petrol prices continue to push buyers away from large six-cylinder cars.

The company this week dismissed suggestions it would cast aside its strategy to offer an exclusively V6-powered Aurion if the large-car market continued to suffer – a move Mitsubishi has flagged with its struggling 380 sedan.

Nonetheless, Toyota Australia executive chairman John Conomos has moved to dampen expectations of the Aurion after forecasting in March that the new large sedan would account for 24,000 units a year at Altona – around 4000 ofwhich are slated for export – when it goes into production from November.

His initial forecast was that the all-new Camry (due on sale in August) would account for 116,000 units once the plant was in full production with the Aurion and churning out 140,000 cars a year.

Acknowledging that analysts were predicting oil prices could reach $US100 a barrel, Mr Conomos said the plant, which was revamped over Christmas to refit a new global body production line for both the Camry and Aurion, could respond "relatively quickly ... to meet the consumer demands" of four-cylinder cars.

"We can’t do it overnight but if anyone can do it quickly we can," he said. "We’re well positioned, through careful planning five years before, inanticipation of these problems.

"We can meet the emerging market of the current markets with some degree of planning and adjustment better than most people (but) we don’t plan on fuel shocks, currency deterioration, political issues or tariff reductions – because if we did, you wouldn’t make a decision."Toyota has embarked on a high-risk venture to reserve the new 3.5-litre V6 for Aurion and restrict Camry to a 2.4-litre four-cylinder.

It is Toyota’s intention to make the Camry a sharper-positioned product to take on rivals like the Honda Accord and Mazda6, while at the same time giving the Aurion a greater chance of success than the Avalon had against the Ford Falcon and Holden Commodore.

The fuel shock and the prospect of further petrol price rises have put all Australian vehicle manufacturers on edge, particularly with the imminent arrival of new models such as the Camry and Aurion and GM Holden’s new-generation VE Commodore (due in August).

The large six-cylinder segment in Australia is in serious decline, with sales down 21 per cent in year-to-date terms over last year, according to VFACTS industry figures. Last year the large-car segment fell 15.7 per cent compared to 2004.

In the short-term, Altona is the only car plant in Australia capable of such market-demand driven flexibility. Both Holden and Ford are tied to rear-drive six-cylinder large-car production, and Mitsubishi, which recently revealed that it was considering building four-cylinder versions of its struggling 380 large car, would need up to two years to make the switch at its Tonsley Park plant in Adelaide.

"We’ve got to manage what we’ve got," said Mitsubishi Motors Australia president Rob McEniry.

Mitsubishi last offered the choice of a four-cylinder or V6 in its entry Magna Executive between 1996 and 1999.

In preparation for the production of the new Camry and the Aurion, Toyota has invested more than $400 million at Altona in a new press plant, bumper bar moulding, paint shop, parts warehouse and the building of a new logistics centre.

Mr Conomos said the new Altona line had the ability to produce a myriad of cars "in the most economic way known to man". "Altona is that modern."Now in run-out, the current model Camry is still experiencing strong demand, both in the domestic and Middle East export markets.

Last year, Toyota exported about 69,000 Camry models, with around 90 per cent of these left-hand drive models to the Middle East.

Leading international investment bank Goldman Sachs recently warned that oilprices could reach $US100 a barrel – up from the current price of around $US72 – on the back of increased production concerns and potential continuing instability of the major oil-producing nations like Nigeria and Venezuela.

The issue of growing tension between the US and Iran, as well as increasing political strain within the ruling elite in Saudi Arabia, are also factors.