Camry Hybrid put on hold

AUSTRALIA’S first hybrid-powered vehicle appears to be one step further from reality, if comments by Toyota Motor Corporation’s most senior officials are anything to go by.

Lexus has joined Toyota and Honda in offering hybrid power in recent years, but a petrol-electric Camry was widely expected to be the first hybrid vehicle built in Australia, as Toyota Australia pushed hard to secure approval and funding to produce the nation’s first homegrown eco-car.

But now it seems the strong Australian dollar, which makes exports more expensive, and imminent import tariff reductions, which will make imports cheaper, could conspire against an Altona-built Camry hybrid.

Already concerned about the diminishing profitability of its dominant export business from Australia, TMC bosses have warned its local manufacturing operations – and therefore an Aussie Camry hybrid – are at stake if planned federal government tariff cuts take place as the Australian and US dollars approach parity.

Left: TMC President Katsuaki Watanabe.

Asked about the prospects of an Australian-built Toyota hybrid, TMC president Katsuaki Watanabe said: “We are studying what we should do with that particular point. At this juncture I cannot say anything more precise than that.” It is believed that as part of its investigations, a TMC delegation visited Australia last month to make an “investment assessment”.

TMC admits that while it had considered importing to Australia the current generation of Camry hybrid - which has entered right-hand drive production in Thailand, whose government has provided generous incentives and which is pushing for a larger slice of global Camry production – Australia’s first Camry hybrid is more likely to be a generation away. And it is likely to be built in Thailand – not Australia.

“Already we have the hybrid Camry in right-hand drive, mainly targeting Thailand, therefore I don’t think it will take so long (for the car to be sold in Australia),” said TMC executive vice-president Global Planning Operations Tokuichi Uranishi in Tokyo on Thursday.

“Definitely the next-generation Camry, but I’m thinking of the possibility of introducing hybrid version even with the current generation. It depends on the government,” said Uranishi-san in reference to the scheduled 2010 import tariff rate reduction.

TMC executive vice-president R&D Kazuo Okamoto said it was technically possible for TMCA to build the Camry hybrid, but like others stressed it was lack of demand and sales volume that prevented Australian hybrid production in the short-term.

“Hybrid system is a very delicate system. We are narrowing down the list of candidate countries for production and I think in a little while we will be able to increase volume so we will be able then to disperse production in several countries,” he said.

“The Camry Hybrid will be our main hybrid system, so production in Australia is very likely … Probably not within the lifetime of this current model … Maybe the next generation model, by that time for sure.” TMC executive vice-president Quality and R&D Masatami Takimoto also said that while government assistance would help, hybrid production costs needed to be reduced before Australian hybrid sales increased enough to ensure TMC would recoup its investment.

“The price of hybrid vehicles is higher so we must reduce the price. By around 2012 or 2013 we hope to achieve one million hybrid sales (per annum) by reducing the price and increasing the variety.

“Whether we produce locally or not is determined mostly by volume. We must ensure we can recover the investment in a shorter time.

“Camry is exported from Australia already … but hybrid vehicle volume will never reach that volume, so we must reduce costs. Hybrid cars will reduce in price and when this happens they will become more popular.

“When this happens Australia may then produce hybrid vehicles,” he said.

TMCA representatives were equally unwilling to say an Australian-built Camry hybrid depended on government funding, saying demand was the key.

“It’s an ongoing discussion,” TMCA chairman emeritus John Conomos told GoAuto in Tokyo. “The issue is not the money, it’s the market. Who will buy it, at what price and how many? “Then there is the terrifying 12-month wait between freezing final specifications and production, before the final issue of resources,” he said.