Toyota has announced that it will shut down its vehicle and engine production in Australia by the end of 2017. Toyota Motor Corporation clarified that it will continue business with Toyota Motor Corporation Australia Ltd. (TMCA) being converted into a sales and distribution company. Toyota currently assembles the Camry, Camry Hybrid and Aurion in its Altona plant in Melbourne.
"We believed that we should continue producing vehicles in Australia, and Toyota and its workforce here made every effort. However, various negative factors such as an extremely competitive market and a strong Australian dollar, together with forecasts of a reduction in the total scale of vehicle production in Australia, have forced us to make this painful decision," said Akio Toyoda, Toyota president.
Toyota is also considering to downsize its operations in its Australian-based R&D center Toyota Technical Center Asia Pacific Australia Pty. Ltd. (TTCAP-AU) with regards to its Australian production.
The end of Toyota’s manufacturing operations is expected to cost the economy 2,500 jobs, while more job losses are expected in allied industries affected by the closures.
The Japanese automaker was the Australian auto industry’s last hope after Ford announced their closure in May of 2013 and Holden in December of 2013 after recording hundreds of millions of dollars worth of losses. The negative performance was attributed to soaring manufacturing costs, the strong Australian Dollar, weak export performance, cheap imports, and ultimately the decision of Australian PM Tony Abbott to cut $457-million in subsidies given to car manufacturers by 2015.