In a statement, TTC-AU confirmed it would "significantly reduce the size of its business over the coming years, with only a limited number of functions likely to remain beyond 2017", stating the design and engineering arm is "not viable in the long term in its current format without local production".
TTC-AU - which is one of five design engineering branches used by Toyota Motor Corporation worldwide and employs 160 workers - is responsible for body engineering (including exterior design, body shell, interior design and functions/lighting), chassis engineering, electronics engineering and vehicle evaluation along with administrative processes such as customer quality and technical administration.
TTC-AU president Max Gillard expressed sadness about the announcement.
"Our immediate priority is to meet with each of our groups to explain the ramifications this decision will have on them and detail the support services that are available," Gillard said.
The company said the final size, structure, location and remaining functions of the design and engineering arm is yet to be announced.
Toyota Australia media and external affairs manager Beck Angel said some jobs may be sustained following the closure of the brand's manufacturing facilities in 2017.
"Our product design team primarily carries out work for the Asia Pacific region and accessories. They do not work exclusively on the design of our locally built vehicles, so they will continue to operate following the plant closure," Angel said.
As recently as November 2013 TTC-AU was deep in the development process for local tuning of the Toyota Fortuner SUV, as well as aiming to ensure the next generation of products from the brand lived up to the new Toyota mantra of being fun to drive.
At the time, Gillard told CarAdvice in an exclusive interview that his team was also heavily involved in the core aspects of the facelifted Toyota Camry, and that TTC-AU did more than just tune cars to suit local needs.
“In the old days we used to modify vehicles for Australia. Now our key role is to ensure the base design suits the requirements of Australia, because if we have to duplicate what Toyota Japan have done, well it’s not really efficient. And sometimes you can’t really achieve something … because some suspension arm is in the wrong position and you can’t move it.
“The base design, to which we assist, is automatically suited to our country and the countries that we export to.
“The fundamental philosophy is ‘made in Toyota’ not made in Japan or made in Australia.”