Toyota Australia starts engine exports to Asia

TOYOTA Australia today started exporting engines for the first time in more than a decade, fulfilling a new supply arrangement with Toyota factories in Malaysia and Thailand.

About 18,000 2.5-litre four-cylinder petrol and hybrid engines – about 16 per cent of production – will be shipped from the recently opened $331 million engine plant at Altona, in Melbourne’s west, this year.

A further 90,000 engines will go into Australian-made Camrys and Camry Hybrids for sale here and overseas, bringing total engines production in 2013 to more than 108,000.

Toyota Australia media and external affairs manager Beck Angel could not confirm how long the export program would continue, but told GoAuto “there is no end-date in sight”.

Ms Angel said the number of export engines might increase, saying: “We hope that we will continue to export (to Thailand and Malaysia) in future and for those numbers to remain the same or increase.” Toyota Australia previously exported engines in knock-down kits to Thailand between 1992 and 2002, and sent engines to New Zealand and South Africa between 1993 and 2001.

Left: Toyota engines ready for export.

But the new arrangement marks the first time stand-alone Toyota engines have been exported from Australia to Thailand or Malaysia.

The Altona-built engines will end up in Camry sedans made in the Southeast Asian nations, making the most of free-trade agreements (FTA) that have been criticised as a one-way street to date.

Ms Angel agreed the FTA had sweetened the export deal and eased access to the Thai and Malaysian markets.

“But the fact is we are getting a reputation with our affiliates and they are turning to us to get quality products,” she said.

Helped by the FTA, low costs and a reputation for quality, Thailand has become Australia’s second largest source of imported vehicles after Japan, with almost 172,000 Thai-built vehicles sold here last year.

But only a small number of Australian-made cars – including a handful of Ford Territory SUVs – have made it to Thailand, where they are still subject to punishing local taxes.

Production of the new 2.5-litre AR four-cylinder petrol engines started at the new Altona engine plant this week and the first shipment of exports will arrive at their Asian destinations next month.

Toyota Australia executive director of manufacturing and purchasing, Chris Harrod, said the company’s employees had worked hard to secure investment for the new engine plant and “ensure that we are producing the best quality engines”.

The federal government’s now discontinued Green Car Industry Innovation Fund contributed $63 million to the Toyota engine plant rebuilt, with more co-investment coming from the Victorian government.

“The fact that we were able to secure new export markets in Thailand and Malaysia is testament to the quality of our work and the positive reputation Toyota Australia has amongst our affiliates,” Mr Harrod said.

“It also shows good cooperation and support from the Toyota group within the ASEAN region, which has allowed us to further expand our engagement and linkage to the Toyota global network.

“We are now one of only four countries to produce this particular engine and are the only Australian manufacturer to produce both petrol and hybrid engines.” Toyota expects 85 per cent of engine production at Altona will be petrol units, with the remaining 15 per cent hybrid.