Thursday, June 12, 2008

Toyota deal raises questions

"The Federal Opposition says the grant handed out to Toyota to build hybrid cars in Australia amounts to a $35 million photo opportunity for Prime Minister Kevin Rudd. Mr Rudd announced the subsidy yesterday in a news conference at Toyota headquarters in Japan. Opposition industry spokesman Eric Abetz says comments from Toyota officials show the company would have begun hybrid car production at its Altona factory in Victoria even without the multi-million grant from taxpayers. Reports in today's newspapers say Toyota had already decided to build a hybrid version of its Camry sedan." Read more here ...

Questions abound. Do we really know if the Hybrid Camry will make a difference to our greenhouse emissions? The Productivity Commission says: " (it) will likely encourage some buyers to switch from taxed, more efficiently produced, imported, hybrid and fuel-efficient vehicles to subsidised, higher-cost, locally produced ones - without markedly increased green car sales overall." Read more on this here.

Aside from the federal grant of $35 million how much will Victorian taxpayers contribute? While $35 million is touted we can only wonder what the final figure will be, especially given a commitment to purchase 20,000 of them. Using a nominal figure of $25,000 per unit this alone represents $50 million and that’s without taking into account running costs including maintenance. The Toyota Motor Co. is one the globes most successful companies so it seems a waste to offer so much to help offset start costs. Perhaps the money would have been better spent on bringing the eventual price down. Industrial innovation run-off is also questionable; it appears that the motor will be a imported as a whole at a cost of $3,500 per unit, more subsidies perhaps? Thus the hybrid technology itself is a complete import.