Toyota Australia wants government funding to build new model

[Road_Warrior]

Looks like it's Toyota's turn to cop the Wrath of Dowling.

http://www.perthnow.com.au/business/...-1226581358433

Toyota Australia wants government funding to build new model

by: JOSHUA DOWLING - NATIONAL MOTORING EDITOR
From: News Limited Network
February 19, 2013 9:00PM

TOYOTA has lost a staggering $700 million in three years, but is negotiating for more taxpayer dollars to build a new model in Australia.

A senior company insider has revealed to News Limited the scale of the loss, which equates to about $3500 for every car Toyota exported to the Middle East over the past three years.

In the same period, the federal and Victorian governments contributed almost $100 million to Toyota's manufacturing operations - $35 million to go towards the local production of the Camry Hybrid and a further $63 million to go towards a $330 million upgrade of Toyota's engine factory at Altona.

Toyota Australia senior executive director Dave Buttner has confirmed to News Limited that the company is looking to build a third vehicle alongside the Camry four-cylinder and Aurion V6 sedans and that preliminary discussions have begun with state and federal governments regarding support.

"We have the capability and capacity to build another model," Mr Buttner said.

"We want to shore up our volume to make sure we can stay (manufacturing in Australia). We've appraised the government of the plans we have in place to make our manufacturing plant continue."

Despite the strong dollar sucking the profitability out of Australia's biggest automotive foreign trade, with no currency relief on the horizon, Toyota says it is trying to improve its economies of scale by increasing output at Altona from its recent low of 94,000 cars per year, and back up to almost 150,000 a year, which it last recorded in 2007. By comparison, Ford made 37,000 cars last year and Holden made about 85,000.

Toyota made critical changes to its Altona production line when it introduced the new Camry late last year that would enable a third model to be built there. But the new car most likely wouldn't be added until 2018, when the Camry and Aurion are due for a model changeover.

News Limited understands Toyota Australia looked at building the Kluger SUV and HiLux utility locally, but both options have already been ruled out.

Toyota could build the Corolla in Australia after ending local production in 1999, but it would not make enough profit from the sales of the budget-priced small car. This leaves a compact SUV as a likely candidate, but Toyota is not giving away any clues.

"We've got open eyes in terms of what we can build here," Mr Buttner said. "It would have to be something where we could get volume and have some export potential."

He would not confirm if the $3500 loss for every Camry exported over the past three years was accurate. "It's irrelevant. Our job is to manage whatever it is. Every day we have to find a better way to do what we do.

"We are 100 per cent committed to local manufacturing (despite) the challenges that our business is facing. We were the second location outside Japan to build (Toyota) cars. We were the first location outside Japan to build (Toyota) engines. We've had a long relationship. We've always expressed a strong desire to continue (manufacturing in Australia).

"Currency, when you're a significant exporter like us, is a key determinant in your overall level of profitability. We can't change the currency environment, it's a floating exchange rate, and it will move subject to the vagaries of the economy.

"We've operated in that environment as a manufacturer for 50 years and as a sales company for 53 years. So I think we've shown some intestinal fortitude to survive for that amount of time."

Mr Buttner said Toyota Australia tried to fund its own investment in future models before approaching governments for support.

"We don't go cap in hand in the first instance," he said. "We take the approach, 'what are we going do to help ourselves and how can we demonstrate that we can be competitive as a manufacturer in the Asia-Pacific region'. Then we need to ask for investment from our parent company.

"Then, naturally, you need to have a discussion with the government."

Last year, Toyota cut 350 jobs from its blue-collar workforce at Altona to about 3000 employees, due to falling export demand. But the company says it has no plans to make any further job cuts this year.

This reporter is on Twitter: @JoshuaDowling

[big_landau]

no not toyota it can't be.

[FPV GTHO]

The haters won't be easing up on Ford given the suggestion of the new model coming in 2018 and Toyota talking to the government now.

I didnt realise though Toyita were still producing so many cars. I suppose their export deals to the Middle East didnt dry up like Holden's did, but at a suggested $3000+ loss per car, what good are they doing.

[malazn mafia]

they should bring back the Lexcen.

[jpd80]

Hmmm, not so long ago Dowling and others wanted Ford to copy Toyota and Holden with exports...

Maybe Ford understands the business and protection from currency shifts a little more than the competition.
Holden has already said that they need the Aussie dollar to be below 80 cents US, maybe Toyota does too...
It would seem that the US dollar makes less impact on FoA's business than it does to the others...

[Angeldust]

wow, didn't know that toyota actually built the most cars here out of all 3 manufacturers.

[Nikked]

Originally Posted by Angeldust

wow, didn't know that toyota actually built the most cars here out of all 3 manufacturers.

and are running into a large debt doing it...


Ford made less of a loss, selling less cars...

[big_landau]

i am supprised not to see many posts.well maybe i shouldnt,people are quick to stick the knife in fords kidney from behind when they look like making a bad move but the untouchable toyota dosn't seem to cop a hit?maybe its time we moved on,lets face it the au falcon people have had way too much.

[tweeked]

Originally Posted by big_landau

i am supprised not to see many posts.well maybe i shouldnt,people are quick to stick the knife in fords kidney from behind when they look like making a bad move but the untouchable toyota dosn't seem to cop a hit?maybe its time we moved on,lets face it the au falcon people have had way too much.

We are supposed to have a go at Toyota because they are trying to garner government support for a new model in 2018????

Good on them, and great for keeping the industry alive if they can get it. The industry is more likely to survive if there are 3 manufacturers.

[mik]

Just goes too show selling lots of cars does`nt mean you will turn a profit, you might be right jpd80, perhaps people should not be **** canning ford oz for crappy advertising and not putting enough effort in to sell cars here, all the local builders are struggling.

[BroadyFord]

Originally Posted by Nikked

and are running into a large debt doing it...


Ford made less of a loss, selling less cars...

At what point does HQ in Tokyo say 'enough is enough' when you'e losing $3500 on each car you export?

[bobthebilda]

Originally Posted by BroadyFord

At what point does HQ in Tokyo say 'enough is enough' when you'e losing $3500 on each car you export?

The article doesnt say they are losing $3500 on each export.

A senior company insider has revealed to News Limited the scale of the loss, which equates to about $3500 for every car Toyota exported to the Middle East over the past three years.

The author has got the total loss and simply divided it by the number of cars exported (and probably didnt even minus the other exports from the mid east ones). He could have just as easily stated that in the same time they imported 500,00 cars, and they lost $1400 for each car they imported.

Toyota import cars, they export cars to the mid east,they export cars to other countries, they sell spare parts, they have other investments that make money.

For the above sample to make any sense, would you think it likely that importing cars, exporting cars to non mid east countries, selling spare parts and all their other investments would make a profit / loss of $0.

[FPV GTHO]

Well anytime theres a BIG loss, theres generally a story behind it. For instance Ford's last couple of losses also had a $300m RnD spend and staff redundancies. So whats Toyota's story?

[Road_Warrior]

A book loss, as opposed to an actual loss. Ford had carried forward some asset depreciation and R&D costs and had to realise it sooner or later. I'd say Toyota may be in a similar boat, those new Camry and Aurion models would have had costs that need to be brought out somewhere.

[Night]

I don't have an issue with car makers getting grants from the government especially if it helps local industry. I do however have a problem when they get the money and then use imports to build the car or even worse is when a Mitsubishi comes along and gets money even though they have no intentions of staying in this country and then refuse to pay back what they scammed.

[roberts]

does this sort of behaviour amount to capitalism or communism?

[EA30TH]

Loss on the books, but maybe cashflow positive? All sorts of reasons could be at play.

There's bigger issues here for the uninformed, like the fact most car industry subsidies are tax offsets so it's just avoided tax for the company. They still need to earn the money. Meanwhile the likes of the Toyota Hilux (top seller from Thailand) are effectively subsidised by the now irrelevant but widely applied FBT exemption making their TCO favourable versus giving your employee a safer and more relevant EcoLPi Falcon. Should we then say perhaps people should focus on why we have a FTA with Thailand and import most vehicles to Australia but in return Thailand applies a special registration tax to imported cars that limits Ford to 100 Territories?

I'm not sure if the car manufacturers have raised this distortion via FBT etc, perhaps it suits them? After all Ford probably sees a comfort in selling Rangers based on that.

[XR Martin]

Australian Government support for the local auto industry? An equivalent of $17 per person, per year.
German Government support for its local auto industry? $90 per person, per year.

I wonder what kind of quality cars we'd be capable of if our local industry got the support that other Nations gave to theirs?
Not only that we have one of the lowest import duties of any nation.

[Nikked]

27,230 camry/aurions sold in 2012.

price (lets say $32000 as a rough average), $2880 worth of tax on each car (tax on local cars is 9%)...

$78 422 400 in tax revinue from local camry sales...


Sounds like a good return of investment...when you add in the income tax of workers, tax on the factories etc...

[Dr Smith]

Don't worry Toyota lost nothing, it's works on a global profitablity, the "loss" made in Australia (or more correctly loss carried in the books to mimimize it's local liablities) was made up by the "profit" generated where the actual vehicle was sold. Hence the recent tax penalty handed out by the ATO.....international price transference anyone...

[phillyc]

We need all the manufacturing we can get in Australia. I hope that Toyota do build an SUV here in Australia.

I wish we could, but I just don't think we can profitably do small cars. With that in mind, I think should be making in Australia
* 4x4 Utes (Ranger, Hilux, Colorado)
* 4x4 SUV (Everest, Prado, ???)
* Passenger Utes (Falcon and Commodore)
* Medium/Medium Large SUV (Territory, Kluger, Captiva)
* Medium Cars (Fusion/Mondeo, Malibu, Camry/Aurion)
* Performance RWD (Falcon/Mustang and Commodore)

For the amount of sales in the segment and what you pay for 4x4 Utes and SUV I reckon they would make a great business case to be Aussie made.

[Nikked]

Ranger, Hilux, Colorado make good sense, right on the back of the mining sector...and farmers make good use of hiluxs lol

I just hope gov grants don't become a election winning point...alot of people see the grants as a waste, because they don't see them as an investment. Joe Hockey already has a strong stance against the grants...

[greenfoam]

Originally Posted by malazn mafia

they should bring back the Lexcen.

They never built the Lexcen. It was built in Adelaide by Holden then shipped to Toyota. On the build sheet that you can find under the carpet its exactly the same as every other VN except it says customer: Toyota rather than say customer: Victoria police . If it was a cop car.

There was a rumour the lexcen was built better. But its only a rumour. Fact was they tended to be better than most old VNs because old guys bought them and looked after them.

[Nikked]

Originally Posted by greenfoam

They never built the Lexcen. It was built in Adelaide by Holden then shipped to Toyota. On the build sheet that you can find under the carpet its exactly the same as every other VN except it says customer: Toyota rather than say customer: Victoria police . If it was a cop car.

There was a rumour the lexcen was built better. But its only a rumour. Fact was they tended to be better than most old VNs because old guys bought them and looked after them.

Lexcens were built buy holden? Never knew that...

[FPV GTHO]

Originally Posted by phillyc

We need all the manufacturing we can get in Australia. I hope that Toyota do build an SUV here in Australia.

I wish we could, but I just don't think we can profitably do small cars. With that in mind, I think should be making in Australia
* 4x4 Utes (Ranger, Hilux, Colorado)
* 4x4 SUV (Everest, Prado, ???)
* Passenger Utes (Falcon and Commodore)
* Medium/Medium Large SUV (Territory, Kluger, Captiva)
* Medium Cars (Fusion/Mondeo, Malibu, Camry/Aurion)
* Performance RWD (Falcon/Mustang and Commodore)

For the amount of sales in the segment and what you pay for 4x4 Utes and SUV I reckon they would make a great business case to be Aussie made.

Problem is I don't think you can simply have BOF vehicles coming down the same line as monocoque, which leaves Ford out in the cold for such plans or looking at significant investment in a second local line.

[music189]

Toyota is more Australian than Holden at The, moment they use more Aussie parts manufacturers than Holden do and the Aussie content is way more than Holden
there was a story In one of the papers last year about it and Holden didn't have the guts to say how much Aussie content was in the VE then Ford and Toyota did though

[malazn mafia]

Originally Posted by greenfoam

They never built the Lexcen. It was built in Adelaide by Holden then shipped to Toyota. On the build sheet that you can find under the carpet its exactly the same as every other VN except it says customer: Toyota rather than say customer: Victoria police . If it was a cop car.

There was a rumour the lexcen was built better. But its only a rumour. Fact was they tended to be better than most old VNs because old guys bought them and looked after them.

If I ever had the misfortune of driving a commodore, wouldn't mind a complete badge swap to toyota lexcen to avoid having to stare at that unsightly gay lion badge (since when was a lion an Australian animal) every day .

They have a very nice fleet of RWD cars over in japan they could bring over here to be assembled and be the successor to the lexcen. Toyota Aristocrat, Celsior, Crown, Chaser etc.

[tezxr8man]

Originally Posted by Night

I don't have an issue with car makers getting grants from the government especially if it helps local industry. I do however have a problem when they get the money and then use imports to build the car or even worse is when a Mitsubishi comes along and gets money even though they have no intentions of staying in this country and then refuse to pay back what they scammed.

Or toyota getting money from the government for development of a car done overseas

[Nikked]

Originally Posted by tezxr8man

Or toyota getting money from the government for development of a car done overseas

The money is used to setup the factories to allow new models to be built...

[MethodX]

Originally Posted by music189

Toyota is more Australian than Holden at The, moment they use more Aussie parts manufacturers than Holden do and the Aussie content is way more than Holden
there was a story In one of the papers last year about it and Holden didn't have the guts to say how much Aussie content was in the VE then Ford and Toyota did though

Since they are all multinationals anyway, what difference does it make?