Toyota Oz ‘planning for 2017 local model’

TOYOTA has already started planning for a next-generation car to be built at the troubled Altona factory in Victoria from 2017, even though local manufacturing operations are only locked for the five-year life of the current-generation Camry that arrived in showrooms less than a month ago.

And while the company says it is not expecting government handouts to help it through its current production slump that has prompted it to announce plans to cut 350 of its 3350 workers at Altona, the Australian arm of the Japanese giant has made it clear that a local Toyota-government “partnership” will be sought to help convince Toyota Motor Corporation (TMC) head office in Japan to stick with its Australian manufacturing operation for the future model.

The Gillard government has indicated it will step up to the plate with taxpayers’ money to try to help get the project across the line, but opposition leader Tony Abbott has committed a coalition government to winding back aid to the motor industry by 2016 – the year before Toyota is due to introduce the new model.

The 2016 deadline is also significant for Ford Australia, which has only committed itself to local production of the locally developed Falcon large car to that year, while GM Holden will face its own D-day on local manufacturing in late 2015 when the replacement for the current Cruze small car is due to come on stream alongside the next-generation VF Commodore at its Elizabeth plant in South Australia.

Left: Toyota Australia president Max Yasuda. Below: Opposition leader Tony Abbott, manufacturing minister Kim Carr and the AR Camry engine.

The spectre of Toyota closing its Camry factory in the western suburbs of Melbourne in five years – along with thousands of job losses – was raised when Toyota Australia president Max Yasuda told journalists on Monday that his vision was for Toyota to continue to be manufacturing in Altona in five years, “but beyond that is not yet decided”.

Toyota public affairs manager Glenn Campbell told GoAuto the key point Mr Yasuda was trying to make was that Toyota wanted to keep building cars in Australia.

“We are building a new model now, and of course we have to put our best case forward to the parent company to support the building of the next model, which would be due around 2017,” Mr Campbell said.

“What he (Mr Yasuda) is saying is that we see manufacturing as an integral part of our business going forward, and the next hurdle will be when we are due for the next model.”

Mr Campbell said planning for manufacturing a new Toyota model took about five years – roughly the same time as a Toyota Camry model cycle.

The latest Camry was launched just last month, suggesting planning for a new model at Altona is in its infancy.

Mr Campbell confirmed that Toyota was not seeking any help from the government over its current situation.

“We have to take control of our business, but once our business is in a more competitive position, and as we seek future projects from our parent company, partnering with government would certainly be part of that,” he said.

It is unclear if Toyota has started formal talks with the federal government over provision of co-investment money from the $5.4 billion New Car Plan to help secure a commitment from Toyota head office in Japan for future manufacturing in AustraliaThe federal and Victorian governments have signalled their willingness to commit money to securing the future of the Altona plant and the thousands of jobs dependent on production there.

Federal manufacturing minister Kim Carr told ABC radio that the government would work with individual companies to attract new investment.

“That’s where we build new jobs – through investment,” he said.

Toyota Australia blamed the high Australian dollar and drop in export sales – traditionally about 70 per cent of local production – for the necessity to cut both the payroll and costs.

Production has slumped 36 per cent in four years, to 95,000 units last year, and the company does not expect the situation to improve any time soon, despite the arrival of the all-new model within recent weeks.

Toyota has started a 10-week negotiation process with unions to achieve the 350 redundancies at Altona.

Unions are miffed that the job cuts were not made voluntary, saying they are the first forced redundancies at an Australian car manufacturer since Mitsubishi closed its South Australian plant in 2008.

Toyota Australia is yet to open its new $300 million four-cylinder engine plant that is partly funded by the federal government’s now-defunct Green Car Innovation Fund.

The Toyota commitment to the engine plant – due to come on stream later this year to make 2.5-litre AR engines for the Camry and the soon-to-be released Camry Hybrid – is a plus for the chances of continued car manufacture by Toyota in Australia, as such plants have a 10-year life.

This means the plant will not only serve the current generation Camry but a following model from 2017 to 2022.

Mr Campbell described TMC’s approval of the engine plant project as “a very positive step for an affiliate”.

“With that investment, it signals we are in a very good position to take advantage of any new opportunities, provided we can strengthen our organisation by improving efficiency and costs,” he said.