Toyota Motor Corp yesterday said it will stop making cars in Australia in less than four years, banging the final nail in the coffin of country’s auto industry.
Toyota said production of vehicles and engines would stop at the end of 2017, throwing into doubt 3,900 jobs at its Altona plant in a Melbourne suburb and another 150 jobs at a separate design center — leaving Australia with no car plants.
In announcing the news, Toyota blamed several factors for the decision, including the stronger Australian dollar and an increasingly tough market.
Abbott had previously sought talks with Toyota to persuade them to keep the facilities open and prevent a complete collapse of Australia’s auto sector.
Toyota’s future in Australia had been in serious doubt after US giant General Motors Co (GM) said in December last year that its Holden offshoot, which employs about 2,900 people, would cease local manufacturing by 2017 after more than six decades.
With Mitsubishi closing its Adelaide plant five years ago and Ford Motor Co halting vehicle production at its unprofitable Australian operations in 2016 — at a cost of 1,200 jobs — Toyota was until yesterday the only company with a commitment to making cars in the country.
The Australian Manufacturing Workers’ Union said the move could trigger a recession in Australia, where the economy is struggling with a bumpy transition away from a decade of reliance on mining.
“The magnitude of this decision in the community cannot be underestimated. We are looking at a potential recession all along the southeastern seaboard,” union secretary Dave Smith said.
Toyota, which has been manufacturing cars in Australia since 1963, currently makes the Camry, Camry Hybrid and Aurion in the country. It will become a sales company.
“We believed that we should continue producing vehicles in Australia, and Toyota and its workforce here made every effort,” Toyota president Akio Toyoda said in a statement.
“Negative factors such as an extremely competitive market and a strong Australian dollar, together with forecasts of a reduction in the total scale of vehicle production in Australia, have forced us to make this painful decision,” he said.
The automaker added that for those “who will be impacted by this decision, Toyota intends to provide the best support it can, including employment assistance.”
Australian Industry Minister Ian Macfarlane said Toyota had not asked the government for any financial assistance in the lead-up to its decision.
The Australian government had subsidized auto manufacturing, hoping to keep the industry alive as it supports tens of thousands of jobs in other areas, including auto parts.
GM Holden received A$1.8 billion (US$1.6 billion) in Australian federal government assistance in the past 11 years. The company had cited a “perfect storm of negative influences” for its decision to exit Australia, including “the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.”
Auto makers in Australia produced about 178,000 cars in 2012, according to the International Organization of Motor Vehicle Manufacturers.