Toyota will close car factory in 2017

Toyota is expected to make an announcement later today about its manufacturing future in Australia, with the fear the carmaker will close local production operations. Carsguide understands Toyota is telling its workers it will stop making cars in 2017. Sources have said the company is informing the workers at a special meeting in Victoria this afternoon.

Toyota has previously said that the closures of Holden and Ford would make it difficult for the Japanese brand to maintain its Australian operations.

"If Holden were to leave it would be very difficult [to achieve cost savings from parts suppliers]," the executive director of sales and marketing at Toyota Australia, Tony Cramb, told Australian media at the Tokyo motor show last year. "I’m not saying it’s impossible, I’m just saying it makes it far more difficult. "If Holden goes … it would be more difficult for suppliers [to cut their production costs].

It is expected that Toyota will make an official announcement at 6pm after the Altona workforce has been told. Closure of Toyota's Altona facility in Melbourne would axe the jobs of about 2200 workers, plus cause an extra ripple through the supplier industry. A letter has been distributed to workers confirming the carmaker will close in 2017. The Toyota statement says that it will end vehicle and engine production in Australia, blaming the competitive market and strong Australia dollar had forced them to "make this painful decision".

The move means Toyota will import the Camry and Aurion V6 beyond 2017, making the brand a full-line importer here for both passenger and commercial vehicles. 

An AMWU official described the announcement as "a dark day", adding that workers were devastated by the news.

EXCERPTS FROM THE TOYOTA STATEMENT

The decision was not based on any single factor. 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.

Toyota Australia President and CEO, Max Yasuda, was joined by Toyota Motor Corporation President and CEO, Akio Toyoda, as he made the announcement to employees late this afternoon. "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."

This reporter is on Twitter: @KarlaPincott