Cost cutting, including from suppliers, necessary for Toyota Australia’s survival

Toyota must make significant cost cuts to keep its Altona factory running.

News Corp reports that Toyota’s future as a car maker in Australia is looking “increasingly grim”, and that the company’s global CEO and another board member confessed that the cost per making a car in Australia was an issue.

Toyota said that supplier costs needed to be reduced.

“In Australia currently we are having a difficult situation,” Nobuyari Kodaira, who sits on the parent company’s board, told News Corp.

“Because this is a business we need to have economic viability.

“In order to continue the manufacturing there, we are cooperating with our suppliers on activities such as rationalisation and also cost reduction. We definitely think those activities are necessary.”

In an announcement by Toyota Australia last month in which it said there would be 100 redundancies, the company also made it known that costs per vehicle had to be reduced by an ambitious $3,800.

The company needs to make its production costs cheaper to renew an export deal for Camry vehicles with Middle East countries, The Australian reports today.

Toyota Australia loses about $2,500 per car sold to the Middle East, due to the high dollar, though exports are crucial to maintaining scale.

It is on track to produce 105,000 cars this year, of which about 70,000 will be exported,

A decision on whether or not its next-generation Camry would be made by Toyota in Japan early next year. The Australian operations are competing with eight other factories globally to produce the car.


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