MELBOURNE —Motor Corp. Australia Ltd. President Ken Asano warns his company may not survive as a local carmaker much beyond 2005 — when tariffs fall to 10% from 15% — unless the industry here becomes more competitive.
He told the Australian Institute of Company Directors in Melbourne that Australia's productivity is lower and the country has fewer working days per year than's U.S. and U.K. plants. Absenteeism is higher partly due to an older workforce.
Toyota's Australian plant takes 20 work hours to make a car against 15 in its U.K. plant and 14 in the U.S. The Australian plant operates 220 days a year compared with 245 in U.K. and U.S. plants. Absenteeism is 13% in Australia, 8% in the U.S. and 3% in the U.K.
Asano also says the Australian dollar now is so weak that exports do not make up for the higher costs of imported parts, and Toyota Australia may not show a profit this year. Asano has given himself three years to lift productivity, but if the gains cannot be made, Australia no longer will be viable for Toyota to manufacture vehicles.
Toyota has to increase its exports to survive as a local carmaker, he adds, noting it was on target to export 50,000 vehicles in 2001 because of orders from the Middle East.
This year's goal is 43,000 units. Toyota last year exported 35,000 vehicles from its Australian production of 91,000 units.
John Conomos, Toyota Australia executive vice president, says that while a withdrawal is very unlikely, it could not be ruled out.
It would take a complete collapse of government policy and a failure by Toyota to meet industrial relations requirements, or a collapse of the currency to such an extent the company could not survive before Toyota would close its plant, he says.