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Toyota engine plant ‘destined for Thailand’

Beneficiary: Siam Toyota Manufacturing in Thailand is rumoured to be the prime beneficiary as equipment from Australia’s Altona factory is dismantled and shipped to overseas plants.

Thailand likely to get Toyota Oz’s $331 million engine-making plant post 2017

Toyota logo18 Feb 2014

TOYOTA Australia’s near-new engine plant is likely to end up in Thailand at Siam Toyota Manufacturing once local production ends in 2017, according to Toyota sources.

The company says no decision has been made on what will happen to the engine manufacturing equipment, but GoAuto has been told that Toyota Australia executives are speculating privately that Thailand is the logical destination for the machinery that was partly funded by Australian taxpayers.

The Altona factory already exports engines to Thailand where they are fitted to Camrys and Camry Hybrids built at Toyota Motor Thailand’s Gateway assembly plant, about 100km east of Bangkok.

As that plant will need a fresh source of 2.5-litre four-cylinder engines after Altona closes, it makes sense to relocate that production line to Toyota’s existing engine manufacturing factory in Thailand, Siam Toyota Manufacturing, in nearby Chonburi.

Other equipment from Toyota’s Altona car assembly plant might also end up in Thailand, which is the likely source of Camry and the related V6 Aurion for Australia once Altona shuts down.

Toyota Australia media and external affairs manager Beck Angel told GoAuto today that no decision has been made on what Toyota would do with its factory equipment post-2017 or where the Camry and Aurion would be imported from.

Toyota Australia started production of AR four-cylinder Camry engines in January 2013, with about 16 per cent of engines exported to Thailand and Malaysia.

The $331 million engine plant was built with a $63 million contribution from the federal government’s Green Car Innovation Fund.

GoAuto was told that the plant was designed to have a life of two model cycles – roughly 10 years – meaning the equipment will have been used for only half of that by the time Toyota shutters the Australian factory.

Toyota employs more than 20,000 workers in Thailand, mainly at its Toyota Motor Thailand plants at Gateway and Ban Pho. It produces a wide range of vehicles there including Yaris, Corolla, Prius, Camry, HiLux and Fortuner (an SUV based on HiLux).

A smaller plant – Toyota Auto Works – also assembles the HiAce van.

While Toyota Australia produces about 100,000 Camry, Camry Hybrid and Aurion vehicles, with about 70 per cent going for export, mainly to the Middle East, Toyota Motor Thailand produces more than 880,000 vehicles, exporting them across the ASEAN region and to countries such as Australia.

Toyota Australia has imported its top-selling ute, the HiLux, from Thailand for years, and now has switched production of its biggest seller, the Corolla, to the Asian kingdom for the latest model released locally today.

All imports from Thailand are duty free in Australia, thanks to the Australia-Thailand free-trade agreement.

It is unclear if the Thai plant will pick up the Middle East export program, or whether that will fall to one of Toyota’s other Camry factories in Japan or Kentucky.

The announcement that Toyota would quit manufacturing in Australia by the end of 2017 came on February 10. The decision will cost 2500 jobs at Toyota and tens of thousands of others at suppliers.

The decision came 50 years after Toyota started making cars in Melbourne.

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