Toyota to stop making cars in Australia from 2017 as Nissan switches focus

Toyota said yesterday it would stop making cars and engines in Australia by the end of 2017, marking the end of an era for a once-vibrant auto production base and the loss of thousands of direct and indirect jobs.

Toyota’s decision follows the planned exits of General Motors and Ford announced last year and would leave no global automaker remaining in Australia as high costs and a strong currency make it an unattractive production base.

“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,” Toyota Australia president Max Yasuda said in a statement. About 2,500 jobs will be affected when the plant stops building cars in 2017, the company said.

A pullout by Toyota had been widely feared because of the blow to the parts supply base from the flight of GM and Ford.

Australia's car industry includes about 150 companies working in sectors from components to tooling, design and engineering, with more than 45,000 people employed directly in the car and parts-making sectors, according to government data. Vehicle production has nearly halved in the past decade. In contrast, global automakers have been building new factories and ramping up capacity in countries like Indonesia, where a burgeoning middle class and lower costs make it an increasingly attractive production base.

Toyota rival Nissan today announced it could sacrifice its global market share goal to reach its mid-term profitability target after slower-than-expected sales in its biggest markets left its profit margin the tightest among Japanese car makers. Nissan, on reporting an 18.4 per cent rise in April-December net profit, said its nine-month operating margin was 4.1 per cent, down from 4.5 per cent a year earlier. That compared with 6.6 per cent at Honda and 9.7 per cent at Toyota. – (Reuters)