Toyota May Follow GM Out of Australia

Toyota Logo Autoshow

It appears that Ford (NYSE:F) may have started a landslide effect in Australia, with its plans to pull its production operations in the country by 2016. On Wednesday, General Motors (NYSE:GM) confirmed that it too was planning to remove its manufacturing operations from Australia, citing the strength of the Australian dollar — by recent calculations, it’s now 65 percent more expensive to manufacture vehicles down under than it was 10 years ago.

As if the exits of America’s two most prominent automakers wasn’t a large enough dent, it appears that Toyota (NYSE:TM) — the largest manufacturer in the world by volume — is also contemplating the dumping of its Australian production operations, after GM makes its departure.

GM’s exit would make it “highly likely” that Toyota would also end its production in Australia, a Australian Manufacturing Workers’ Union official is quoted by Reuters as saying. The exit by GM now leaves Toyota as the only company still producing cars in the nation.

GM’s withdrawal is expected to put about 2,900 jobs in jeopardy, on top of the 2,000 or so that will be axed by Ford’s exit. If Toyota were to join, that would only broaden the impact of jobs lost, as the automakers have been at odds with Australian regulations and foreign currency impacts.

Toyota reportedly has an additional cost of manufacturing in Australia of 2,800 Australian dollars per vehicle, and the company is reportedly working through a sort of deal that would provide a more favorable operating environment for its manufacturing division in Australia.

Don’t Miss: Tesla Superchargers Get a Boost in Middle America.