Global automotive giant Toyota has revealed that it plans to stop making cars in Australia by 2017, citing the effects of a strong Australian dollar and increased labor costs as the main causes of the decision. The boost to the Australian currency has allowed Australian citizens to buy imported cars more easily, causing the degradation of the locally-manufactured car market.
With fellow automotive manufacturers Mitsubishi closing its facility in Adelaide five years ago, and Ford also planning to stop production in Australia by 2016, Toyota would have been the only company with a commitment to manufacture cars in the country. The Australian Manufacturing Workers’ Union, one of the major beneficiaries of Toyota’s plant, said that the move could trigger a regional recession in Australia. “The magnitude of this decision in the community cannot be underestimated. We are looking at a potential recession all along the southeastern seaboard,” said union secretary Dave Smith.
Toyota had characterized the decision as “extremely difficult,” but it had to go on with the move despite appeals by Australian Prime Minister Tony Abbott. “In fact, it is one of the saddest days in Toyota’s history,” said Toyota Australia president Max Yasuda. Speaking to Australian reporters via an interpreter, Toyota Motor Corp. president and CEO Akio Toyoda said that the move was “simply heartbreaking” — to stop the operations in the country that started as far back as 1963. “I can assure you that Toyota will work hard to continue our contribution to Australia,” Toyoda said.
Prime Minister Abbott, obviously saddened by the decision of the Japanese automotive giant, declared it a “dark day” for the Australian economy. “Nothing we say or do can limit the devastation that so many people will feel at this point,” he said. “The important thing to remember is, while some businesses close, other businesses open, while some jobs end, other jobs start. There will be better days in the future.” Toyota started its business in Australia in the early 60s and steadily grew it to popularity. Toyota still produces the top-selling Camry sedan in the country.