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Toyota to stop making cars in Australia

Toyota says it will stop manufacturing cars in Australia by the end of 2017.

The car maker's decision is the third major blow fo the Aussie automotive industry. Before Christmas, Holden said it would cease local manufacturing, also by the end of 2017. And last week, Ford said it would scale back local production by June, with hundreds of reduncancies.

In a statement, the company blames high costs and an unfavourable dollar, "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."

Toyota Australia employs around 4200 staff. The company says 2500 manufacturing jobs will be lost as a plant in the west Melboune suburb of Altona is closed. 

The indirect effects of the decision are expected to be far larger. The combined effects of the Toyota, Holden and Ford closures and scale-backs will put pressure on the car parts industry, which employs 18,000 people in Victoria and 6000 in South Australia.

Toyota has been making vehicles in Australia for more than 50 years, and currrently  manufactures the Camry, Camry Hybrid and Aurion as well as the production of four cylinder engines across the Tasman.

The company's 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."

Opposition weighs in
Former Australian automotive ambassador Steve Bracks, who was Victorian Premiere 1999 - 2007, said if federal and state governments had worked closely with Toyota its future could have been assured.

The Labor politician blasted Prime Minister Tony Abbott for failing to visit Toyota in the wake of Holden’s announcement it would leave in 2017.

That would have been a show of good faith that would have made a significant impact on Toyota’s assessment of the Australian government’s commitment to manufacturing, Mr Bracks said.

“There hasn’t been a finger lifted to show any interest in Toyota since that decision on Holden,” he said.

“It is a gamble it will have significant dislocation in the Australian economy and particularly in Victoria. This could have been avoided.”

Comments and questions

The chickens have come home to roost for the Aussie unions, years of rorting the employer has delivered an uncompetitive industry (fx is only part of the issue). Car manufacture is best suited to low cost and lower skilled labour forces (eg China).

shanghai (Reuters) - Chinese leader Xi Jinping has ordered the military to choose domestic brands when procuring vehicles, part of a broad effort to reduce costs and buy locally-produced goods, state media reported. The decision, contained in a circular issued late on Monday, follows a ban in April on the use of military license plates on luxury cars, most of which were foreign brands. ... The Foreign Ministry has said that minister Wang Yi is now chauffeured in a Red Flag H7. The circular, approved by Xi and issued by the People's Liberation Army's staff headquarters as well as the political, logistics and armament departments, said funds used by the army should be strictly regulated and the budgeting processes improved, the state-run Xinhua news agency said. The purchase of new military cars should be arranged through a centralized system, it said. The document was "aimed at promoting frugality and cutting down on waste in military and armed police forces". In line with similar calls to directed at government officials, it urged strengthened supervision over spending and banned "personal banquets financed with public funds". The circular also banned giving or accepting money, securities, souvenirs and local products and called for strict controls on celebrations, forums, exhibitions and performances. .

Saab Automobile endured a slow and painful death in 2011 as it ran out of funds to pay its suppliers and was eventually forced into bankruptcy. The Hong Kong-owned National Electric Vehicle Sweden (NEVS) purchased the bankrupt estate in September 2012, and plans to resurrect the Saab name in 2014 with an EV based on the old Saab 9-3.

Saab 9-3 Aero has restarted production at its Trollhatten plant in Sweden. ... the company has big aims, including becoming "a front runner in the automotive industry, with focus on electric vehicles" and while currently seeing China as the main market for those vehicles, is hoping the Saab brand to global sales. Though that will likely mean targeting European markets first, there is still a chance we could see Saabs return to Australian showrooms. .

I agree 100 % with Grim Reaper.
The unions can blame no one but themselves

Prime Minister Tony Abbott has announced the terms of reference for a royal commission into union corruption. The inquiry, headed by retired High Court judge Dyson Heydon, will look at union governance and corruption.
''This is a government which is absolutely committed to the rule of law,'' Abbott told reporters in Canberra. The terms of reference specifically mention the Australian Workers Union, the Construction Forestry Mining and Energy Union, the Electrical Trades Union, the Health Services Union and the Transport Workers Union. The commission can also examine any other person, association or organisation against whom credible allegations of misconduct are made. .

Agree with Grim Reaper - Ozzies have been living in an unsustainable fantasy land with what they earn - they have outstripped the western world and this 'unreality' that alot of kiwis bought into is ending.

Oz companies have priced local manufacturing out of the market - they are less able than ever before to compete with other countires that have more realsitic labour costs.

Couldn't they see the tide going out?