Australian-made Kluger edges closer

TOYOTA’S long-held dream of building the Kluger in Australia has received a massive shot in the arm with the exclusive confirmation to GoAuto that Japan will almost certainly stop making the SUV when the next generational change occurs in the early 2010s.

It is understood that Toyota will end right-hand drive Kluger production at the Ikeda plant in Osaka, Japan, when the current vehicle’s lifecycle is completed about 2012, potentially opening the door for Toyota in Australia to take over.

As previously reported, Toyota Australia has had ambitions to add the Kluger as its third model line at Altona for more than five years, as first revealed by then company boss John Conomos in September 2003.

Toyota Australia president Max Yasuda told News Limited two weeks ago he was actively seeking a third model line to be built alongside the four-cylinder Camry sedan and the closely-related Aurion V6 sedan.

The Kluger is built on the same Toyota Modular Platform that spawned the current-generation Camry, released in Australia in the middle of 2006.

"We do have some plan under study to introduce something different from the sedan, but we have not yet reached any consensus or decision," Mr Yasuda was reported as saying.

"It is still at a primitive study phase. I want to have something different. But it would be using the same platform." Asked if the new vehicle addition could be the Kluger, Mr Yasuda said: “Maybe. Maybe. But, as I said, it is still at a very primitive phase of study." Although Toyota sold fewer than 13,500 Klugers in Australia last year, the Camry and Aurion tally for 2008 of 23,067 and 19,562 units respectively means that the combined Australian sales total for all three models could easily exceed 55,000 units.

Left: 2005 FT-SX concept previewed the current Kluger MkII.

These figures do not include the existing Camry and Aurion export numbers, which hit 100,000 units in 2008 for the first time in a calendar year, as part of the company’s $1.8 billion export revenue program.

Nor does it include the number of Klugers that Toyota Australia could export to markets like Japan itself, as the world’s only supplier of right-hand-drive models.

Clearly, Toyota Motor Corporation is still in the decision-making process on Kluger. But with the plummeting value of the Australian dollar, the export component of Kluger production in Melbourne could help seal the deal for Toyota Australia.

Of course, the Kluger is primarily a North American market model.

And Toyota’s Princeton, Indiana facility, which builds today’s Kluger as the Highlander for the US and Canada, may instead be chosen to pick up the slack by producing RHD as well as left-hand drive versions of the next-generation vehicle, to supply Australia and the rest of the RHD world.

US Highlander sales slumped in December 2008, to the tune of more than 47 per cent compared to the same time in 2007, as consumers continue to reel from the deepening economic crisis. Overall, Highlander volume for the year was down 18.4 per cent year-on-year.

As a result, one Toyota insider told GoAuto that “…the situation could go either way” with America supplying Australia with the Kluger, since an increase in demand would be extremely welcome in any vehicle production plant in the world right now.

Then again, falling SUV sales could also mean that there is no guarantee that the Highlander/Kluger will even survive into the next generation.

Working against importing the Kluger from America are unstable exchange rates, a well as the complexity of adding a RHD component to the US production line.

Toyota was going to shift the manufacture of the current Highlander/Kluger from Indiana to its new green field site in Tupelo (birthplace of Elvis Presley), Mississippi in 2010, but a change of heart last year will see the recently unveiled Prius III hybrid vehicle produced there instead.

However, another Toyota source indicated that the company was “extremely unlikely” to contemplate the discontinuation of Highlander/Kluger production.

And, from this year, the current vehicle will also be made in China, although these will be LHD only and are not expected to be exported.

Over the years, Toyota has made no bones about seeking the green light from Japan to build the Kluger in Melbourne, and GoAuto understands that Toyota Australia came close to snaring production of the current Kluger, released in late 2007.

At the global launch of the second-generation Kluger in June of 2007, a Toyota spokesman stated that several right-hand-drive markets would need to be “…on board” as export destinations before Kluger production would be considered viable at the Altona plant in Melbourne.

At the time, it was widely reported that Toyota in Australia had to work hard to convince Toyota Motor Corporation in Japan that the extra expenditure on engineering the Kluger II for right-hand drive production was viable.

With 13,424 units shifted in 2008, Australian sales of the Kluger soared 70 per cent against 2007 levels, in a segment that was down overall by 10 per cent for the year, making it the second-best selling medium SUV after the full-frame Toyota Prado.

But this increase was aided by the fact that the Kluger II was only in its first full year of sales, and that the Toyota’s main competitor – the third-placed Ford Territory – had been around virtually unchanged since June 2004.

Whether Toyota decides to bolster the case for an Australian-built next-generation Kluger by adding a four-cylinder version to the current range in Australia remains to be seen.

Sold only in base front-wheel drive trim in the US, it uses Toyota’s all-new 1AR-FE 2.7-litre four-cylinder petrol engine producing 139kW of power at 5800rpm and 252Nm of torque at 4100rpm.

According to Toyota’s corporate manager of product planning, Peter Evans, Toyota in Australia has yet to make a decision on the four-cylinder Kluger, but said that the 2.7-litre engine might impact on sales of the smaller RAV4 series.

There are also no plans to bring in the Kluger Hybrid to Australia, which ironically is pnly built in Japan in left-hand drive guise for North America.

“We have to sort out sourcing issues before we can introduce the Kluger Hybrid,” Mr Evans said.

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