(SYDNEY) — Toyota said Monday it will stop making cars in Australia by the end of 2017, spelling a final blow to auto manufacturing in the country, where car companies say high production costs and tough competition have made the business unviable.
Toyota’s announcement, which will result in the loss of around 2,500 jobs, was widely anticipated, coming just two months after General Motors Co. said it would end production in Australia by 2017. Ford Motor Co. announced in May that it would cease Australian production in 2016.
All told, some 6,600 manufacturing jobs will be axed between the three companies. Mitsubishi Motors Corp. stopped manufacturing in Australia in 2008.
Toyota Motor Corp. said its decision was based on a combination of factors including the high Australian dollar, the high cost of manufacturing and competition.
“We did everything that we could to transform our business,” Toyota Australia CEO Max Yasuda said in a statement. “But the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia.”
Toyota President Akio Toyoda delivered the news to workers at the company’s Altona plant near Melbourne, where he paid tribute to 50 years of Toyota cars being built in Australia.
“To now have to deliver this news to the very people we have worked so hard with, to the many people who have supported our production for so many years, is most regretful for Toyota and, for me personally, simply heartbreaking,” he said.
Toyota, which has been manufacturing cars in Australia since 1963, currently makes the Camry, Camry Hybrid and Aurion in the country. It will become a sales company.
Industry Minister Ian Macfarlane said Toyota had not asked the government for any financial assistance in the lead-up to its decision.
The government had subsidized auto manufacturing, hoping to keep the industry alive as it supports tens of thousands of jobs in other areas including auto parts.
Holden, which is the Australian arm of GM, received 1.8 billion Australian dollars ($1.6 billion) in federal government assistance in the past 11 years.
Auto makers in Australia produced about 178,000 cars in 2012, according to the International Organization of Motor Vehicle Manufacturers.