Toyota pulls plug on Australian manufacturing
One of the supposed benefits of the Malaysia-Australia Free Trade Agreement is that we can look forward to tax-free imports from Australia. Guess that’s not happening anytime soon as various Australian media sources have today reported the announced closure of Toyota Australia’s manufacturing facilities in Altona, Melbourne.
An official statement from Toyota Australia says ‘the decision was not based on any single factor. The market and economic factors contributing to the decision include the unfavourable Australian dollar that makes exports unviable, high costs of manufacturing and low economies of scale for our vehicle production and local supplier base.’
Toyota’s history in Australia dates back to 1958 with the Land Cruiser’s arrival. Assembly of Toyota vehicles in Australia began in 1963 with the Toyota Tiara and by 1992, the 1 millionth Aussie-built Toyota rolled off the line. The company moved its manufacturing facilities from Port Melbourne to the Altona plant in 1994, which today builds the Camry (a smaller version of our Camry) and the Aurion (our version of the Camry with a V6 engine). The Altona plant is also responsible for manufacturing the AR-series four-cylinder engines that power the Camry 2.5.
Announcing the sombre news to employees, Toyota Australia President and CEO, Max Yasuda said, “While we have been undertaking the enormous task of transforming our business during the past two years, our people have joined us on the same journey, which makes it even more difficult to announce this decision.”
“We did everything that we could to transform our business, but the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia,” he continued.
Yasuda said the closure of Toyota’s plant will potentially affect the livelihood of approximately 2,500 employees as the company transitions into becoming a purely sales and distribution company.
Industry observers have long viewed Toyota’s exit as inevitable following similar announcements by Ford and GM Holden over the last twelve months, bringing Australia’s car manufacturing industry to a complete end by 2017, putting over 6,000 employees from the three companies out of jobs in the process; and this is before taking collateral damage along the supply chain into account.
Despite having land area that is bigger than the entire ASEAN region combined, Australia’s population count is estimated at no more than 24 million people as of April 2013, which is even less than Malaysia’s 29 million counted in the 2010 census.
In 2013, Australia sold just over 1.1 million cars, a domestic volume that is insufficient to support a manufacturing industry on its own. As mentioned in Toyota’s release, the unfavourable exchange rate of the Australian dollar, together with the generally high costs of manufacturing in the country has made Australian-made cars too costly to be attractive exports.
KON
Pictures: Official Toyota release.
