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Toyota says it has not ruled out producing the Corolla small car in Australia as it contemplates its future local manufacturing operations.

The local car maker’s boss, Max Yasuda, told the Australian Financial Review yesterday that the company could consider building a small car if it could establish that Holden was capable of making a viable business case for its Cruze.

“I have to find out how Holden is making the business of small cars feasible. If they can do it, we can too,” Yasuda told the AFR.

A source close to the company has told CarAdvice that Toyota started looking at the business case for a locally built Corolla after Holden confirmed in early 2009 that it would add the Cruze to its Adelaide assembly plant, alongside the Commodore.

Ford Australia had also announced it would build the Focus small car locally before making a U-turn to use government money on more fuel efficient variants of the Falcon large car and Territory SUV.

Toyota Australia, when pressed on the comments from Yasuda and CarAdvice’s source, would only add officially that various options for local production were possible but that the company was in the process of strengthening its current set-up where the Camry medium car and related Aurion models are assembled in Victoria.

“Anything could be under consideration [for local production] from time to time, but our current focus is on improving the competitiveness of our existing operations and building a stronger foundation for future growth,” said a Toyota Australia public affairs spokesperson.

The company recently announced 350 employees would be axed in response to reduced exports of the Camry to the Middle East as a consequence of the global financial crisis and high Australian dollar.

A Toyota insider told CarAdvice that the Kluger SUV was still a more likely candidate for a new model line at Altona, a vehicle that has been openly considered in previous years.

The Kluger – pictured below – is based on the Camry and would therefore involve less complexity compared with the smaller Corolla.

The Corolla is by far Toyota’s best-selling vehicle in Australia, and consistently one of the most popular models in the country.

In the latest official industry sales figures, for January, Toyota sold 3383 Corollas – accounting for 24 per cent of the company’s 14,065 sales for the month.

Small cars have long surpassed large cars in Australia as the dominant vehicle type, and in January accounted for 19,367 sales compared to 4713 large cars, which include the Toyota Aurion, and 6356 medium cars, which include the Camry.

The Mazda3 small car is currently the best-selling vehicle in Australia, while the Cruze (shown in local production above) last month became the first Holden to outsell the Commodore since the large car launched 34 years ago.

Small cars, however, typically reap a smaller profit than larger cars. Holden has admitted previously that it would have to monitor its costs better if the smaller Cruze was to emerge as a more popular product than the Commodore.

Toyota has built the Corolla previously in Australia – from the late 1960s at Port Melbourne and more recently in the 1990s when it became the first car to be built at the current Altona plant.




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