TOTOTA AUSTRALIA CLOSES ITS DOORS

TOYOTA AUSTRALIA CLOSES ITS DOORS

MEDIA RELEASE – 3 OCTOBER 2017

The Australian Imported Motor Vehicle Industry Association (AIMVIA) would like to congratulate Toyota Australia on its rich manufacturing history in Australia, building vehicles such as the iconic Toyota. Like many, we commiserate with the 2,500 staff members who lost their jobs today. The future for these workers could have been very different if our leaders were prepared to put the needs of consumers ahead of industry representative groups with the most money.

TOYOTA NZ Prior to the introduction of used imported vehicles, New Zealand car buyers paid some the highest prices for cars anywhere in the world. Demand was such that many near-new vehicles were fetching over the recommended new price, forcing the NZ government to lock new car buyers into 12 month contracts to prevent them on-selling their new rides for a profit. In 1998, a removal of tariffs on most vehicles being imported into New Zealand resulted in the remaining four NZ manufacturers – Toyota, Mitsubishi, Honda and Nissan – closing their doors. Recognising the growing popularity of used imported vehicles in New Zealand, Toyota NZ converted their Thames facility from manufacturing to refurbishment of used vehicles from Japan. The Thames refurbishment centre continues to the current day, supplying used imported vehicles to Toyota dealerships. These vehicles are then sold to the general public via Signature Class branding, giving consumers peace of mind when purchasing a used imported vehicle. Most importantly, the switch to refurbishment meant that Toyota NZ could retain most of its manufacturing workforce at the time, giving workers new positions that allowed them to utilise their skills and expertise.

TOYOTA AUSTRALIA Like New Zealand, Toyota Australia has today ceased local manufacturing. While Australia is a competitive marketplace for new vehicles, the crucial difference between it and 1990s New Zealand is that the importation of used vehicles has been heavily restricted in order to protect local manufacturing. But with the end of all vehicle manufacturing in Australia, the need for such protection is no longer necessary.

With two separate government reviews by the Productivity Commission and ACCC, and two further reports commissioned by the Department of Infrastructure all recommending the relaxation of regulations regarding used imported vehicles, rumours persisted that Toyota Australia subsequently investigated the establishment of a Signature Series refurbishment centre, either at its existing plant in Altona, or at a new facility in South Australia. Given that the current review of the Motor Vehicle Standards Act is now in its fourth year and new legislation is due to be introduced to parliament in coming months, the timing would have been perfect; such a facility would have created (or saved) hundreds of jobs in the manufacturing sector and helped stimulate local economies right at a time when automotive manufacturing was winding down.

Fearful of the added competition that imported used vehicles would create in the marketplace, representative groups such as the Federal Chamber of Automotive Industries (FCAI) and the Australian Automotive Dealers Association (AADA) swung into action, persistently lobbying the federal government to ignore the recommendations of its own taxpayer-funded reviews and block any changes to scale back current importing restrictions.

To highlight the ‘cracking a nut with a sledgehammer’ nature of this move, a mere 6,700 used vehicles were imported to Australia in 2016, against a backdrop of 1,178,000 new vehicle sales for the same period. Even if proposed changes to the legislation were very generous for used vehicle importers, a projected figure of 20,000 vehicles per annum would still represent just 1.7% of new vehicle sales.

So why push back so hard? It’s simple: new vehicle importers are operating an oligopoly; one that is currently being aided by government legislation. Without the parallel importation of used vehicles, there is no external pressure on new car dealers to reduce their prices and compete with used imported vehicles. They, therefore, have a vested interest in maintaining the status quo.

And so we end up with a ludicrous situation where Toyota Australia has opted to toe the protectionist industry line, denying its own workers the opportunity to continue in new jobs in a Signature Class refurbishment centre, using skills they’ve already acquired in manufacturing. These same workers will instead be given significant support from both state and federal governments (funded by taxpayers, naturally) to retrain and find new jobs elsewhere.

To make matters worse, Toyota dealers, who could benefit from selling Signature Class vehicles in their yards, have instead led the fight against used imported vehicles. petitioning their local MPs and citing a potential loss of jobs at their dealerships. AIMVIA remains committed to creating a fairer marketplace, both for consumers when they purchase a vehicle, and skilled automotive manufacturing workers, who face growing hardship as they struggle to find new jobs in a shrinking sector.