Green light for Australian-built Camry Hybrid

TOYOTA Australia has won the right to produce a petrol-electric version of the Camry at its Altona plant in Victoria, securing $35 million in federal government funding to build the ‘green’ medium-sized sedan from early 2010.

GoAuto understands that Toyota will almost certainly become the first Australian manufacturer to produce a hybrid car, despite General Motors’ Asia Pacific president Nick Reilly saying last month that Holden would build a hybrid Commodore “within two years”.

Sources have since suggested that 2011 is a more likely on-sale date for the Holden hybrid.

The Camry Hybrid planned for Australia will be almost identical to the US version, which combines a 2.4-litre four-cylinder petrol engine with an electric motor that draws current from a generator and a bank of nickel-metal hydride batteries.

It also uses a continuously variable automatic transmission.

While Toyota Australia produces an almost identical 2.4-litre four-cylinder petrol engine for its regular Camry models, the entire Camry Hybrid powertrain – including the engine – will be imported from Japan.

Toyota Australia executives told GoAuto at today's program announcement that it hopes to eventually source some of the hybrid powertrain components locally – but added that this would require volumes far larger than the initial production run of 10,000 a year.

The Camry Hybrid production plan was announced simultaneously by Victorian premier John Brumby at Altona and Australian prime minister Kevin Rudd at Toyota Motor Corporation headquarters in Nagoya, Japan. Industry minister Kim Carr was also in Nagoya, before flying to Detroit to hold discussions with General Motors and Ford.

In addition to the $35 million in federal funding, the Victorian government promised financial assistance to Toyota – but has not disclosed the details of the deal.

Both tiers of government have also promised to buy a certain number of the hybrid models, with Mr Brumby declaring yesterday that the Victorian government would purchase 2000 Camry Hybrids over the first two years of its production.

Mr Rudd confirmed that the $35 million would be drawn from the Green Car Innovation Fund, which came as a surprise to some pundits because the government had previously stated that the fund’s spending strategy would be determined by the review of the Australian automotive industry headed by former Victorian premier Steve Bracks, who is yet to deliver his report.

TMC president Katsuaki Watanabe yesterday indicated to journalists that he had not been aware of the $35 million funding, while Toyota Australia president Max Yasuda said at the Australian press conference that the Camry Hybrid would not attract GCIF funding because it entered production in the year before the scheme came into effect.

The federal opposition welcomed the Camry Hybrid announcement, but shadow minister for innovation, industry, science and research Eric Abetz questioned the government’s contribution.

“It’s interesting that Labor will bring forward $35 million from its Green Car Fund for this deal – we’ve always had concerns about the start-up date and detail of Labor’s fund, and the fact that, driven by consumer demand, car manufacturers are moving towards these sorts of cars anyway,” Senator Abetz said.

“The comments by Toyota president Mr Watanabe that Toyota only recently learned there would be a $35 million commitment of Australian taxpayer funds, and have yet to decide how to spend it, are very interesting. Inevitably, it raises questions about the need for the Australian taxpayer to invest in this project.” Mr Rudd defended the funding arrangement at the program announcement in Japan.

“This Green Car Innovation Fund is all about how you assist with the start-up of new technologies in Australia. It is not a production subsidy, it’s about starting up a new business. And that’s what we set as an ambition last year,” he said.

“We are proud of the fact that we are now able to realise that ambition. We think this has been a good partnership between the Government of Australia and Toyota.” When asked whether taxpayers should be funding the production of a new car and if this decision was proof that car manufacturers really require government assistance to stay in Australia, Mr Rudd said: “It’s a bit like saying that all innovation policy which involves the injection of a public investment into private R&D operations is wrong. I don’t have that view. I never have had that view. I never will have that view.

“R&D, particularly those related to clean, green technologies, constitute a public good. And whether those public goods are executed through formally public research, or in private research associations and institutions, or associated with private companies, is immaterial.” Mr Rudd said the Hybrid Camry plan would be good for everyone.

“As I said: good for motorists, good for fuel efficiency, good for the car industry in Australia, good for the environment.” Although the hybrid will have fewer Australian components than a regular petrol-engine model, the Federal Chamber of Automotive Industries told GoAuto the announcement of the hybrid production plan represented a huge step forward for the industry.

“It is of enormous significance to the local industry and will demonstrate that we can produce vehicles of this kind in Australia,” said FCAI chief executive Andrew McKellar. “I think it is great to have this investment confirmed.” Mr McKellar said it was an impressive achievement for Australia to become the third Toyota production facility to build a hybrid model.

“It is a demonstration of the commitment to ongoing manufacturing in Australia,” he said, adding that he hoped some of the hybrid powertrain components could be sourced locally in the future.

“Over time, the local car-makers will look at the opportunity to increase the local content.” Premier Brumby described hybrids as the “the cars of the future” and said it was important that the Victorian manufacturing industry was involved.

“With car manufacturers moving on a global scale to produce green fuel-efficient cars, it is crucial that the Victorian auto industry secures a slice of this investment, which will add $150 million annually to our economy,” he said.

“The production of the hybrid Camry … will help secure jobs in the automotive industry.” GoAuto understands Toyota is also poised to announce plans to produce the Camry Hybrid in Thailand.

Toyota Australia senior executive director of sales and marketing David Buttner refused to comment on speculation that Thailand would also produce the green Camry, but said such a decision would not alter the plan to build Camry Hybrids at Altona.

“It is of no relevance to our market. We are producing Camry Hybrid exclusively initially for the Australian marketplace,” he said.

It is not clear which markets the Thailand production facility would supply with Camry hybrids, but it is expected that Toyota Australia could find it hard to export Camry Hybrids when Thailand produces the same car at a lower price.

Mr Buttner said that, while Toyota Australia would produce the Camry Hybrid for its domestic market to start off with, there could be some opportunities for exports in time.

Toyota Australia currently builds around 150,000 vehicles a year, 50,000 of which are sold locally. Sales of locally produced models are split almost evenly between Camry and Aurion.

Mr Buttner said it was inevitable that the 10,000 Camry Hybrid sales would eat into the 25,000 sales of the regular petrol Camry.

“It would be naïve to think that there would not be some substitution,” he said.

Toyota Australia is not in a position to confirm the starting price of the Camry Hybrid, but GoAuto understands the hybrid system will add a premium of around $5000 per vehicle.

Mr Buttner said Toyota Australia was yet to decide the level of specification it would offer with the Camry Hybrid, but anticipated that the model would appeal to both fleets and private customers.

“We would like to think we would sell the car across all customer segments,” he said.

Mr Buttner pointed to the Prius as an example of increased private purchases, saying that, while private sales of the first-generation model were small, they now stood at around 35 to 38 per cent for the second-generation car.

The Camry Hybrid sold in the US runs a slightly different set-up to the Australian model and fuel consumption figures are measured using a different formula.

The US figure works out to around 7.0L/100km, but Toyota Australia is confident it will achieve a better fuel consumption figure than that.

It said the US Camry Hybrid produced around 30 per cent less CO2 than the equivalent petrol model.

The hybrid powertrain will be fitted to Camry models on the same single production line at Altona that currently produces the standard Camry and Aurion models.

Toyota Australia executive vice-president of manufacturing and purchasing Mike Harvie said that it would not make sense to produce the hybrid powertrain locally for such small numbers.

“We will put a case to TMC to produce the powertrain for the next generation in 2011/2012 and we need to be able to do that competitively,” he said.

While it may be possible to produce some parts of the hybrid powertrain in Australia if sufficient volume was achieved, Mr Harvie said he doubted all parts could be sourced locally.

“It is pretty unlikely we can ever make the battery in Australia … we just don’t have the industry here,” he said.

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