Toyota Motor Corp (ADR) (NYSE:TM) Decides To Pull The Plug On Its Australian Manufacturing Operations

Boston, MA 02/10/2014 (wallstreetpr) – On February 10, Japanese car maker Toyota Motor Corp (ADR) (NYSE:TM) announced that it will pull the plug on its car and engine manufacturing plant in Australia by the end of 2017. This decision to pull out manufacturing facilities from one of its largest markets has been debated upon within the board rooms of Japan’s largest car maker for close to 5 months now.

Long Pending Decision

The decision has been taken on the back of rising cost of manufacturing in Australia, primarily driven by the appreciating value of the Australian currency against the Japanese Yen and U.S dollar, coupled with unviable economies of scale. Today’s decision by Toyota Motor Corp (ADR) (NYSE:TM) to vacate manufacturing from Australian shores, follows similar pulling out of manufacturing investments by the likes of Japanese car marker’s traditional competitors like General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) and marks the curtains down on automobile manufacturing in Australia. The move by the Japanese car maker is expected to directly impact close to 2500 employees.

Toyota Pull Out Follows Ford & GM

A similar move by General Motors Company (NYSE:GM) in December of 2013, had set the U.S car maker behind by $600 million, in which close to 2900 GM workers are expected to get impacted. Speaking to media about the decision to move out of Australia, Toyota Motor Corp (ADR) (NYSE:TM) President Akio Toyoda has been quoted to have said that, “We believed that we should continue producing vehicles in Australia, and Toyota and its workforce here made every effort.  However, various negative factors such as an extremely competitive market and a strong Australian dollar, together with forecasts of a reduction in the total scale of vehicle production in Australia, have forced us to make this painful decision.”

Other Units Too Get Impacted

In addition to moving out the manufacturing set up, Toyota Motor Corp (ADR) (NYSE:TM) has also disclosed that it would re-evaluate the feasibility of continuing the operations of its Toyota Technical Center Asia Pacific Australia Pty. which had till date provided development support to the manufacturing facility.

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Published by Lisa Ray

Lisa has a Bachelor of Arts in journalism from Purdue University and 3 years of experience in the publishing field.

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