EXCLUSIVE Toyota to get $30m for next Camry

Toyota Australia will get a $30 million Federal funding boost to go towards production of a new Camry to be introduced in 2015. It means the jobs of 2500 factory workers at Toyota’s car assembly line and engine factories in Altona will likely remain secure until 2017 -- one year after Ford closes its nearby Victorian manufacturing facilities.

The Rudd Government is expected to make the announcement this week. Representatives from Toyota and the Federal Government are yet to confirm the deal.

Contrary to earlier misguided speculation the funding is not to add a third model to Toyota’s Altona factory. Those plans have been put on indefinite hold because of the uncertain future of local car manufacturing.

News Corp understands the extra funding is required because the Camry is due to get a significant update mid-way through its six-year lifecycle.

Customarily, only minor changes are made in the middle of a car’s production life but the Camry has not been selling as well as expected in North America and Toyota has taken the unusual step of approving a complete redesign.

The locally-made Camry is selling well in Australia and its primary export market, the Middle East. However, had Toyota Australia not adopted the new look it would have diminished its export potential because it would, in effect, be continuing with an old model.

Of the three local car manufacturers Toyota Australia receives the least amount of Federal funding and yet employs the most factory workers and builds and exports the most cars by a significant margin. It received $63 million in Federal funds to go towards the $330 million engine factory that was upgraded last year to be compatible with new hybrid technology -- but received no money towards the building of the current generation Camry, released 18 months ago.

Toyota Australia sacked 350 factory workers last year with forced redundancies but hired an extra 168 workers in April on short-term contract so it could match an increase in demand for the Camry in the Middle East.

Toyota exports more than 70 per cent of the cars it makes locally. However, it loses an estimated $2500 on every car it ships because of the strength of the Australian dollar. Toyota Australia balances the books because sales of its imported vehicles are highly profitable.

Toyota’s new funding deal is in addition to a $200 million emergency package to be shared among Toyota, Holden and Ford to make up for the damage caused by changes to Fringe Benefits Tax rules last month. Initial industry forecasts show the FBT will reduce demand for locally-made vehicles by 20 per cent over a full year.

To try to combat that the Federal Government announced overnight it would change the rules of its vehicle purchasing policy to make more Australian-made vehicles eligible. The new “buy Australian” policy will only allow imported cars to be bought by government agencies in extreme exceptions.

This reporter is on Twitter: @JoshuaDowling