It has also indicated that it hopes the program, which is a mid-life move for the current model, will lead to the next generation Hybrid Camry also being produced in Australia.
This first step towards full production of Australia’s first locally built hybrid car was marked by an official ceremony at the company’s Altona production plant, where the Hybrid Camry will be built from December.
Victorian Premier John Brumby, Federal Minister for Innovation, Industry, Science & Research, Senator Kim Carr and Victorian Industry and Trade Minister Martin Pakula, in whose electorate the plant is located, joined Toyota executives to mark the historic event.
Premier Brumby and Senator Carr pushed a "power" button to officially commence pilot production.
They were flanked by Toyota Australia's president and chief executive officer Max Yasuda, senior executive director sales and marketing David Buttner and executive director manufacturing and purchasing Tatsuo Shinozaki.
In the pilot production phase, Toyota produces a small batch of vehicles to test all its processes, parts and assembly methods.
Toyota has made extensive modifications to its assembly plant and methods to accommodate the production of the Hybrid Camry, which takes significantly longer to build than a petrol powered car.
Full-scale production is due to begin in December and Hybrid Camry will go on sale in February next year.
Senator Carr said the Hybrid Camry was a significant step towards a greener, more sustainable automotive industry.
He also defended the government’s investment of $35 million from the Green Car Fund into the project saying it was necessary to get the project over the line.
Toyota will spend about $145 million in works on the plant at Altona to facilitate the production of the Hybrid Camry.
Senator Carr said the car would give drivers an Australian-built choice if they were in the market for a hybrid.
One question Toyota hasn't yet answered is on price, but Senator Carr indicated today that he expected Toyota to be pretty sharp with its pencil when setting the cost of owning a Hybrid Camry.
He also said that while he expected quite a lot of the cars would be taken up by government and industry he expected the Hybrid Camry, unlike the Toyota Prius, would develop a strong private ownership following.
Toyota director of sales and marketing, David Buttner, told journalists at the event that he was “very hopeful” that the decision by Toyota in Japan to make Australia one of five plants to build the current Hybrid Camry would continue into the next generation car.
He acknowledged that while all of the powertrain and hybrid technology for the current car was being imported for assembly at Altona, he thought there would be a greater role for Australia’s automotive parts industry to play in a future model of the Hybrid Camry.
TMCA President and CEO, Mr Yasuda, said Toyota led the world in hybrid vehicles and was committed to remaining at the forefront of innovation and environmentally friendly technology.
He said introducing hybrid technology in Toyota's local manufacturing was one of the most significant developments in the company's 50-year history in Australia.
"This has the potential to change the automotive landscape forever," Mr Yasuda said.
Mr Yasuda said Toyota was working towards a sustainable local automotive industry that supported jobs, innovation and, ultimately, a prosperous low-carbon society.
"This aligns with Toyota's global strategy to accelerate the roll-out of eco-friendly vehicles.
"A practical demonstration of this is the introduction of new Hybrid Camry here at Altona."
Toyota plans to produce at least 10,000 Hybrid Camrys per year for the domestic market and 300 per year for export to New Zealand.
"The strong support of both the Federal and Victorian Governments was a critical factor in our ability to secure Hybrid Camry for local production," Mr Yasuda said.
"They helped Toyota Australia to make a convincing business case.
"A vital element was the strong desire of both levels of government to introduce new environmentally friendly technology and promote innovation within the Australian automotive industry."
The support of Toyota Motor Corporation in Japan was a great vote of confidence in the ability of the Australian company.
"It demonstrates that our manufacturing operations can compete with the best in the world.
"We have responded to the needs of Australian motorists by introducing fuel-saving and environmentally friendly technology as a mainstream option."
Mr Buttner said that there were about 100,000 large, locally produced six-cylinder cars sold in Australia last year.
“If those motorists had bought a Hybrid Camry instead, they could have saved more than $140 million in fuel alone,” he added.