Australian Economy

Australia loses last carmaker as Toyota plans exit by 2018

PUBLISHED : Monday, 10 February, 2014, 3:50pm
UPDATED : Friday, 08 May, 2015, 4:37pm

Toyota Motor will stop making cars in Australia in less than four years, it said yesterday, banging the final nail in the coffin of the country's vehicle industry, despite appeals to stay by Australian Prime Minister Tony Abbott.

The Japanese carmaker said production of vehicles and engines would stop at the end of 2017, throwing into doubt 3,900 jobs at its Altona plant in a Melbourne suburb and a further 150 at a separate design centre - and leaving Australia with no car plants.

In announcing the news, Toyota blamed several factors for the decision, including the stronger Australian dollar and an increasingly tough market.

Abbott had previously sought talks with Toyota to persuade them to keep the facilities open and prevent a complete collapse of Australia's car sector.

Toyota's future in Australia had been in serious doubt after US giant General Motors said in December that its Holden offshoot, which employs about 2,900 people, would cease local manufacturing by 2017 after more than six decades.

With Mitsubishi closing its Adelaide plant five years ago and Ford due to halt vehicle production at its unprofitable Australian operations in 2016 - at a cost of 1,200 jobs - Toyota was until yesterday the only company with a commitment to making cars in the country.

The Australian Manufacturing Workers' Union said the move could trigger a recession in the country, where the economy is struggling with a bumpy transition away from a decade of reliance on mining.

"The magnitude of this decision in the community cannot be underestimated. We are looking at a potential recession all along the southeastern seaboard," union secretary Dave Smith said.

Toyota started manufacturing cars in Australia in the early '60s and still produces its top-selling Camry and other models in the country. But it announced a review of its own position in Australia following GM's decision to pull out.