Toyota's “firm intention” to stay until 2021

TOYOTA Australia says it has “a firm intention” to build cars at its Australian manufacturing plant in Victoria beyond 2016, when the current Camry is up for renewal.

Although the company has not specifically said it will build the next-generation Camry at the plant, Toyota Australia insiders told GoAuto that work had already started on planning for the next Camry to be built there.

The commitment from Japan's biggest car manufacturer – which would secure the plant until about 2021 – eases fears that it might reconsider its commitment to Australian manufacturing in the face of strong headwinds, including a rampant Australian dollar that has savaged its exports, and local cost of manufacturing.

Rival Holden is on the brink of announcing its own long-term commitment to Australian car building, putting the final touches to a co-investment deal with the Australian and South Australian governments.

Only Ford Australia, which has factories at Geelong and Campbellfield in Victoria, has yet to signal the future of its local manufacturing presence, which remains clouded beyond 2016 when the current Falcon and Territory are due for replacement.

Left: Toyota's Altona manufacturing plant.

The latest commitment from Toyota – made by executive director sales and marketing Matthew Callachor at today's Camry Hybrid launch in Tasmania – comes after months of turmoil at Toyota's Altona plant, first from industrial action over a new enterprise bargaining agreement that dragged on for months last year, and then Toyota's decision to slash more than 300 jobs at the plant – 10 per cent of the workforce – earlier this year after 2012 production forecasts were slashed from about 120,000 units to 95,000, mainly due to a drop in exports to the Middle East.

As the company wrangled over wages and conditions with unions last year, Toyota Australian president Max Yasuda warned that unless Toyota's local car-building operations could be internationally competitive, the local operation could miss out in the investment needed to introduce new models into Altona in future.

But yesterday, Mr Callachor appeared to dispel those fears when he said: “Planning for the next generation of cars is well under way and, as is normal for any Toyota affiliate, we will develop the business case to secure the next model.

“Our firm intention is to build cars beyond 2016.” The new $300 million four-cylinder engine plant now nearing completion at Altona is one of the keys to future manufacturing by Toyota in Australia, as such an investment is only made for a minimum of two model cycles, or in Camry terms, about 10 years.

Said Mr Callachor: “Securing the engine plant investment also put Toyota Australia in a strategically stronger position to attract new-model investments from our parent company.” To emphasise the point about Toyota's long-term manufacturing intentions, the company played a video presentation by Toyota Australia executive director manufacturing Chris Harrod, in which he lambasted media reports about the alleged threats to Altona, saying the company was committed to its Australian manufacturing future.

Mr Callachor said it was not generally recognised that Toyota Australia had secured its investment for the new-model Camry, Aurion and Camry Hybrid without government co-investment support.

“Further, the majority of our new $300 million engine plant will be funded by Toyota, with financial support from the Federal and Victorian governments,” he said.

“All these investments have provided Toyota Australia with the opportunity to improve its competitiveness and efficiency beyond the current model cycle.” Mr Callachor said the company's commitment to building Australia’s first locally produced hybrid – the Camry Hybrid - was resolute.

“Toyota is proud to have brought hybrid technology to the local manufacturing sector – especially as we won the business against Toyota affiliates in other countries,” he said.

“We are proud of the resilience we have demonstrated during a time of unprecedented competition and economic instability.

“We are equally proud that everyone in the company has accepted the challenge to adapt to changing conditions.

“Securing investment for production of fuel-efficient hybrid technology from 2010 was just the beginning.

“As a direct consequence, Toyota Australia has been able to secure the new engine plant, which will come on stream in the latter part of this year.” The plant will make the new 2.5-litre four-cylinder petrol engine for the Camry in two forms – a standard engine for the mainstream Camry and another modified version for the Camry Hybrid.

It is the first time that Toyota has built the hybrid version of the engine locally.

Toyota said more than 350 new machines had been brought into the plant, and were now in the process of being tested by engineers, including 135 from Japan.

“This is the first plant of its kind outside Japan, using 'simple slim' technology designed to make the plant’s operation simpler and more flexible than other similar plants,” Mr Callachor said.

“It also enables a smaller footprint, which has allowed the introduction of two extra machining lines – for crankshafts and for camshafts.” The plant will be tested and calibrated for most of this year before full-scale production starts in early 2013.