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Toyota to exit car manufacturing in Australia by 2017

February 10, 2014 • News

Japanese global automaker Toyota has announced today that it will stop manufacturing cars in Australia by 2017, saying it is no longer viable to build cars in Australia.

Image credit: Flickr user strikeael

Image credit: Flickr user strikeael

The car maker’s move is the decision that spells the end of Australia’s car manufacturing industry. In less than a year all three major car manufacturers have made the decision to shut down production in the country, with Ford and Holden exiting by 2016 and 2017 respectively.

An estimated 2500 manufacturing workers will lose their jobs at Toyota’s Altona plant.

“Toyota Australia today announced that it will stop building cars in Australia by the end of 2017 and become a national sales and distribution company,” the company said in a media statement.

“This means that local manufacturing of the Camry, Camry Hybrid and Aurion vehicles, as well as the production of four cylinder engines, will cease by the end of 2017.”

The company said their decision was not based on any single factor as it placed the blame on the high Australian dollar which made exporting unviable, and on the high cost of manufacturing and low economies of scale.

“Together with one of the most open and fragmented automotive markets in the world and increased competitiveness due to current and future Free Trade Agreements, it is not viable to continue building cars in Australia.

Toyota Australia President and CEO, Max Yasuda, was joined by Toyota Motor Corporation President and CEO, Akio Toyoda, as he made the announcement their local staff late this afternoon.

“This is devastating news for all of our employees who have dedicated their lives to the company during the past 50 years,’’ Mr Yasuda said.

“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.’’

In the midst of the devastating news Prime Minister Tony Abbott said the challenge of the government now is to ensure that more jobs are starting and not ending.

Nothing we can say or do can limit the impact and devastation today that some people feel .. . [but] there will be better days in the future.’’

Meanwhile Opposition leaders expressed their dismay over the decision, blaming the Abbott government for the demise of local car manufacturing.

“‘It’s an unmitigated disaster,’’ said Federal Opposition leader Bill Shorten.  ‘‘The car industry has died under the Abbott Government. It’s a disgrace.’’

”Tony Abbott has effectively chased them out of Australia,” said Labor Industry spokesman Kim Carr. ‘‘This is a government that prides itself on its capacity to destroy industries. 2013 was a referendum on the future of the automotive industry. I am truly appalled. The social and economic implications of this decision for Australian manufacturing are disastrous.”

The decision is a massive blow for the Victorian and South Australian economies, both of which are already struggling with the announcements made by Ford and Holden last year.

The Australian Manufacturing Workers’ Union predicts a potential recession along the south-eastern seaboard resulting from the death of car manufacturing.

‘‘This decision will see thousands of jobs exit Australia – not only at Toyota directly but all the way down the supply chain,’’ said AMWU vehicle division secretary Dave Smith. ‘‘The magnitude of this decision in the community cannot be underestimated. We are looking at a potential recession all along the south-eastern seaboard.’’

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