Toyota jobs in Australia at risk

<p>Toyota is to cease production in Australia.</p>

Toyota stocks have risen this morning after the company confirmed it is to cease production in Australia, with thousands of jobs expected to be affected.

Ford and General Motors' Holden unit have already announced plans to stop making cars in Australia and the revelation from Toyota is likely to damage the country's automotive industry even further.

"We believed that we should continue producing vehicles in Australia, and Toyota and its workforce here made every effort," Toyota Motor Company president Akio Toyoda said.

However, he explained that factors such as an extremely competitive market and a strong Australian dollar have made it harder for companies to operate in Australia in recent years.

Mr Toyoda added that "forecasts of a reduction in the total scale of vehicle production in Australia" have "forced" the company to make the "painful" decision.

Stocks up

Despite the news of the job losses, the share price of Toyota is slightly up this morning (February 10th) in the early stages of trading. By 08:14 GMT, stocks in the car manufacturer were up by 0.93 per cent for the day.

Toyota stated that it will work together with employees, business partners, government, local communities and others regarding specific measures on how to end the production of its vehicles in Australia in the coming months.

Mr Toyoda said: "Over the 50 years that we have produced vehicles in Australia, so many people here have kept us feeling at home, have helped us grow and have supported us.

"Toyota’s commitment to continue to provide great cars and services to the Australian people – something we have done for 50 years and will do for the next 50 years – will not change. Toyota will work hard to continue its contribution to Australia."

It was explained by the firm in a statement that it will change into a sales and distribution company in Australia when production of its vehicles in the country is wound down.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.