Toyota Australia posts $149.1m profit

Toyota Australia has posted its first profit in four years, the only one of the three local car-makers to finish its latest financial year in the black.

The company reported a profit of $149.1 million after tax -- but the gain was wiped out by the previous three years of losses totaling more than $150 million.

It was Toyota’s best financial result since the Global Financial Crisis and the third-highest on record in Australia.

The profit was buoyed by imported vehicles given Toyota reportedly loses more than $2500 on each car it makes locally. More than 80 per cent of Toyota Australia’s sales come from overseas models.

The HiLux utility -- which accounts for almost a quarter of Toyota Australia’s imported vehicles and was the top-selling vehicle for six months in 2012 -- is not subject to an import tariff because it comes from Thailand, which has a Free Trade Agreement with Australia.

The $72 million Toyota Australia received in taxpayer assistance over the 12 months to the end of March 2013 (the Japanese financial reporting period) almost equaled the tax it paid on its latest profit ($220.9 million before tax).

Defending its request for ongoing government assistance Toyota Australia spokeswoman Beck Angel told News Limited: “Each year we inject around $1.5 billion into the local economy because of our manufacturing presence, including wages, local suppliers and taxes.

“This means that last year, for every $1 received from the government we spent more than $20 in Australia in connection to local manufacturing. If we do not build vehicles in Australia, this money may be spent in other countries.”

Toyota has accepted about $1.2 billion in taxpayer assistance over the past 12 years, which is marginally more than Ford ($1.1 billion) and significantly less than Holden ($2.17 billion) over the same period. But Toyota employs more factory workers, builds more cars and exports more vehicles than both Holden and Ford.

Over the past 12 years Toyota has posted an average annual profit of $68 million from a turnover of $8 billion, compared to Holden’s $28 million profit from an annual average turnover of $5.5 billion.

Ford has made a loss of $25 million each year from an annual average turnover of $3.3 billion over the same period. In the past five years alone Ford says it has lost $600 million, and this is what drove its decision to shut its Australian factories in 2016.

Toyota says it plans to retain its local manufacturing operations despite its mounting losses from vehicle assembly.

“Factors such as the high Australian dollar and intense market competition have had a negative impact on local manufacturing, however we are doing everything we can to strengthen our business,” the spokeswoman said. “It is our intention to continue manufacturing in Australia. We are now 15 months into a five year transformation to strengthen our business and are making progress, as demonstrated by our financial results.”

Toyota has just refurbished its engine factory and hired 140 part-time factory workers on a six-month contract to help the company handle an increase in export demand for its Altona-made Camry sedan.

But the Federal Government is facing renewed funding pressure from Holden. General Motors’ Australian outpost had announced it was here to stay in 2022 following last year’s $275 million taxpayer assistance deal.

However, Holden has since renewed concerns about the Coalition’s plan to cut $500 million in funding to the car industry if it were to win the Federal election in September.

In the wake of a meeting between the car industry and state and federal governments in Melbourne last Friday, a Holden spokesman repeated the company’s earlier fears over any possible funding cuts. “If it zeros out, we will cease manufacturing,” the spokesman said.

Last month, after Ford announced its Australian factory closures, the boss of Holden Mike Devereux warned: “The industry needs swift action to make Australia’s automotive policy settings clear, consistent and globally competitive as quickly as possible” given the “historically significant economic challenges facing the entire country”.

After the Premier of South Australia Jay Weatherill threatened to pull its $50 million contribution to Holden’s 2022 plan, Devereux said: “We will need a review at the federal level of the conditions that the country is facing right now. Those conditions have changed quite dramatically, not just in the last five six months but the last year. We’re going to continue negotiating the terms of that agreement.”

This reporter is on Twitter: @JoshuaDowling