Toyota sets third-model deadline

UPDATED: 07/12/2012TOYOTA Australia is expected to decide as early as next year which new model it will add to its Altona-based production line.

Several sources confirmed to GoAuto today that that business case for a third model to be added to the car-maker’s line alongside the Camry and Camry Hybrid mid-size car and Aurion large sedan would be finished in time for a decision either next year or in 2014.

That comes on top of a senior Toyota manager confirming the company was prepared to invest more money in its Australian operations.

Toyota Australia has long hinted that it would like to add another model to beef up production number and add diversity.

The all-new RAV4 unveiled last week at Los Angeles motor show will use the same 2.5-litre four-cylinder engine as the Camry, and is understood to share many Camry underpinnings in the engine-bay area.

Seiichi Sudo, Toyota Motor Corporation senior managing officer, said today at the official launch of Australian production of the 2.5-litre four-cylinder engine that will power both the Camry and Camry Hybrid that the company was still keen to invest in its Altona operations.

Left: Toyota's new 2.5-litre engine on the Altona production line.

Asked if the withdrawal of federal funding from the car-making industry would hurt Toyota’s prospects here, Mr Sudo said the company’s relationship with the government was still important.

“We continue to watch [what the federal government] is doing and continue to look for opportunities,” he said. “We are looking at more investment in Australia.”

Chris Harrod, the Altona plant’s executive director of management and purchasing, said the $330 million engine plant was the first step in a string of investments the company was pouring into its Australian car-making operations.

“This [engine plant] investment has been secured by our performance here, and we’re studying, looking at what sort of products we can launch here in Australia,” Mr Harrod said.

“I guess the key thing for us at the moment is trying to understand from a customer’s point of view, what sort of model we should build here in Australia.

“One of the things that we’re studying is that we currently build Camry and Aurion here in Australia, and what other products can we possibly build here.

Mr Harrod said Camry and Aurion would continue to be built alongside the third model, believed to be a compact soft-roader with a higher profit margin than a small hatchback, and that the extra model would help build Toyota's Australian manufacturing to a “sustainable level”.

“Whatever we choose to do is something that has to be profitable,” Mr Harrod said.

Toyota aims to raise the number of cars it makes at its Altona plant to more than 100,000 a year, well above the break-even cut-off of about 80,000 cars a year.

The new engine plant is expected to produce 108,000 engines a year at the rate of 9000 a month, with about 15 per cent of the four-cylinder powerplants rolling off the line destined for Camry Hybrids.

However, not all those engines are destined for the engine bays of Australian-built cars.

According to Toyota, another 15 per cent of the Atkinson-cycle hybrid engines are destined for Thai-built Camry Hybrid models, as well as a new export market for Australia – Malaysia – from January next year when production ramps up to full capacity.

The Australian-built engine is officially rated at 5.2 litres per 100 kilometres in hybrid form when mated to its imported electric motor and batteries, with the straight petrol motor rated at 7.8L/100km.

The Australian-built engine will match the performance figures of the hybrid engine that until now has been imported from Japan while the two-year project to refit Altona for the 2.5-litre engine’s production was completed.

While the engine is expected to comply with much tougher Euro VI emissions laws, the current engine complies with the current Euro IV standards that apply to Australian-made cars.

All three local car-makers are battling depressed sales of their large sedans, and all are contemplating their production future with SUVs as replacements.

Holden is understood to be planning to replace the locally built Commodore with an SUV as part of its billion-dollar commitment to building two all-new models – one of which is the Cruze small car – later this decade.

While Ford is still to commit to its Australian production future past 2016, the Territory mid-size SUV has this year overtaken the Falcon large sedan to become the company’s biggest-selling locally built model.