End of an era: Toyota closes Australian manufacturing operations

Details: Written by James Kelly; Published: 04 October 2017

The term ‘end of an era’ gets thrown around a fair bit in contemporary society. It’s now so overused it’s difficult to tell if there is any genuine meaning to the phrase. Yet, yesterday did signal the end of an era for Toyota as the brand officially closed its Australian manufacturing operations.

54 years and the best part of 3.5 million cars tell a significant story that cements a special place for Toyota in the rich history of car manufacturing in Australia.

It’s been a long journey, it’s almost four years since the closure announcement was made. Despite the long lead time to allow staff the opportunity to prepare and re-skill, it must still sting those who’ve lost their job.

While the economic circumstances surrounding the factory closure are impossible to ignore, there’s something of an empty feeling for many car enthusiasts when the realisation hits that within a few weeks cars will no longer be made here.

A country full of petrol heads, where new cars are recording record sales figures, will not be producing cars anymore. It’s a sobering thought.

Car manufacturing is one of those things that requires lightning in a bottle to succeed. The manufacturer needs to accurately determine market trends, a task made far more complex with ever-changing tastes. On top of this, governments at all levels need to ensure the policy framework is right, this does include the taxpayer kicking in a bit of coin. But most of all, the cost of doing business needs to be competitive on a global playing field.

That last point is where Australia falls down. The high cost of production makes us an unattractive place for multinational corporations. As a developed country in a predominantly developing part of the world, we are surrounded by countries that offer cheaper labour, import tariffs, greater taxpayer support along with less red and green tape. A perfect storm on our doorstep. Well, that’s globalisation for you.

Not much has been said about the customer, the person who actually decides what car to purchase. The decision makers have turned away from locally made offerings.

Now, the Camry remains reasonably popular. It’s a constant top ten car, it owns the mainstream midsize category. It has needed to work hard to hold its market share, aggressive discounting and fleet sales have kept the Camry moving, but it wasn’t enough.

Utes and SUVs are what we now buy, yet none of them are made here. Ford had a fair crack with the Territory, the brains trust anticipated the desire to sit higher. After a big start, buyers didn’t show enough loyalty to a design that didn’t receive the necessary investment to evolve.

Aussies used to be a fairly straightforward bunch, not anymore. Tastes have changed, Strayans have developed a big appetite for premium badges. What we own has become far more important than what we do. That’s something we should all take time to think carefully about.

To their credit, Toyota and its staff stayed classy to the very end. Approximately 3,000 people attended the ceremony at the Altona plant. This included current and former employees, suppliers, affiliate companies and some of the top brass from Japan. It was a private event, kept for those who have made a contribution.

There were lots of quotes released to the automotive media from local Toyota heavies. All sounded genuine in wanting all outgoing staff the very best. I could copy and paste them in, but I’m sure you all get the message.

Sentiment to one side, Toyota has been an exemplary corporate citizen and has gone all out to assist its employees to transition into new jobs. Not all businesses go to efforts such as these. Some staff have already successfully moved into new jobs. For those yet to secure new employment, Toyota will be providing ongoing support.

It’s not just factory staff that are moving on, Toyota is closing its Sydney office and will centralise its head office out of Port Melbourne, meaning further job losses.

Pleasingly, Toyota will be holding onto the Altona plant. The site will be repurposed that will see the development of a Centre of Excellence which will include a world-class training facility, expanded design and engineering capabilities, and a test track. So for the time being, the site will be kept away from the hordes of developers that will no doubt be keen to get a piece of the action.

Toyota is unlikely to miss a beat as it restructures its operation and becomes a full importer. Australian’s love the brand and will continue to hand over their hard earned. Toyota has been the number one selling brand for the past 14 years in a row and that streak will continue. When it comes to sales, Toyota is the motoring equivalent of Elliot Ness, untouchable.

It takes a big team to dominate the local market, and as such, Toyota will be retaining approximately 1,300 local employees in a diverse range of roles.

There are lessons in the closure of Australia’s car industry that all of our political and business leaders should take on board. University textbooks will need to be rewritten.

We are no longer an isolated island disconnected from the rest of the developed world. Kevin Rudd would often bang on about the Asian century, while Malcolm Turnbull rabbits on about agility, jobs and growth. In many ways, Australia is fortunate. We are in the right part of the world to enjoy continued economic prosperity. However, the key is remaining a competitive location to do business in a global context. This should be what dominates the national debate.

TOYOTA AUSTRALIA PRODUCTION HIGHLIGHTS