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Toyota quits: Australia to lose car-making in 2017

Going, going, gone: Toyota announced today it will quit car-making in 2017, with about 2500 jobs to go.

Toyota Australia’s hand forced as Ford, Holden also prepare for exit

Toyota logo10 Feb 2014

TOYOTA has officially announced it will quit automotive manufacturing in Australia in 2017, marking the final chapter in almost a century of car-making history.

The announcement, made today in front of the company’s 2500 workers as part of Toyota Australia president Max Yasuda’s annual address to employees, comes as little surprise after Ford and Holden’s decisions to quit over the next three years.

The decision to quit includes a shut-down of the $330 million engine-building plant commissioned last year, which adds to Toyota Australia’s export earnings alongside the Camry four-cylinder sedan sold in the Middle East.

Both the locally made Camry and its hybrid version, and the V6-engined Aurion sedan will be imported once the car-making arm closes.

“The decision was not based on any single factor,” the company said in a single-page statement announcing the decision.

“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.

“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.

According to the statement, Mr Yasuda was joined by Japan-based Toyota Motor Corporation president and chief executive Akio Toyoda as he made the announcement to employees.

“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.

“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.

“Although the company has made profits in the past, our manufacturing operations have continued to be loss making despite our best efforts.

“Our focus will now be to work with our employees, suppliers, government and the unions as we transition to a national sales and distribution company.

Support services will be available to our employees and we will do everything that we can to minimise the impact of this decision on our employees and suppliers.”

Mr Yasuda said the decision to quit car-making would have an impact on the company’s corporate divisions, which will be studied over the coming months to determine what roles and functions will remain in the future.

Mr Yasuda said that Toyota was also committed to providing support to the industry as it prepares for the end of vehicle manufacturing in Australia.

“We will work with our key stakeholders to determine how to provide the best support to our employees, suppliers and local communities during the coming years,” Mr Yasuda said.

“Not only do we need to ensure our local suppliers and employees can plan for their future, we also need to make sure that we continue to produce high quality vehicles and engines for our domestic and export customers.”

Toyota is saying more about the decision to pull out of Australian manufacturing at a press conference at its Port Melbourne-based headquarters at 6pm tonight.

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