Toyota Australia Opens New Engine Plant; Government Strengthens Manufacturing Support

Toyota Australia opens a A$330 million ($346.2 million) state-of-the-art engine plant, making it the first Australian auto maker to produce both gasoline and hybrid engines.

The 226,042-sq.-ft (21,000-sq.-m) facility in Altona, west of Melbourne, will build 108,000 4-cyl. 2.5L engines annually for Toyota’s locally built Camry and Camry Hybrid sedans. About 15% of the output will be exported to Thailand and Malaysia.

The new engine boasts significant improvements in fuel efficiency and greater power than the previous 2.4L engine, Toyota says. That will mean an 11% reduction in fuel consumption for the Camry and a 13% reduction for its hybrid model.

Construction of the engine facility began in October 2011. It replaces the original factory built in 1978 that was Toyota’s first engine plant outside Japan. The new plant starts full production Jan. 14, with two shifts building about 450 engines a day.

Toyota Australia President and CEO Max Yasuda says the opening of the engine plant is part of the auto maker’s mission to transform its local operations and build a more sustainable business.

“We are now one of only four countries in the world to produce the AR 4-cyl. engine,” and the first Australian car manufacturer to produce both (gasoline) and hybrid engines, he says in a statement.

The new factory shows the efforts Toyota is taking to ensure local car manufacturing can maintain its presence in a highly competitive marketplace. “I am a true believer in local car-making,” Yasuda says. “Building a new engine plant in Australia is at the heart of our manufacturing strategy.”

The new engine facility also is a significant milestone for Toyota Australia as it allows the auto maker to maintain its workforce and further develop technologies, skills and products, “so we can continue building engines and cars in Australia for many years to come.”

The Australian government contributed A$63 million ($66.1 million) toward the cost of the plant, a subsidy noted by Yasuda. “An ongoing partnership between local car makers, the government and suppliers is fundamental for ensuring the Australian industry can compete.”

Toyota’s Australian exports passed 1 million units in August, making it the first local auto maker to reach the 7-figure mark. It also will roll out its 3 millionth Australian-built vehicle later this month.

Attending the plant opening, Australian Prime Minister Julia Gillard announces new steps in a government plan to promote a strong manufacturing sector. This includes a leadership group headed by Boeing Australia President Ian Thomas to help companies seize new opportunities.

“The government is appointing the first automotive supplier advocate to boost sales of Australian-made cars to government and business fleets and to work with (the auto) industry to win new markets,” Gillard says in a statement.

The first grant for a A$236 million ($247.6 million) industrial-transformation research program will focus on making sure Australia is adding to its manufacturing-sector strengths, including vehicle production.

“We want to keep working with you, the car industry and manufacturing, and these are the next three steps for the future,” Gillard says.