Toyota to follow Ford, GM and exit Australia in 2017 image

What Australia dreaded has happened today: Toyota announced it would cease car and engine production there by the end of 2017, following the similar already announced exits from Ford and GM.

This day holds now a historical significance, as it marks a bitter end to an era – once a flourishing car production industry is set to die, with the loss of thousands of direct and indirect jobs. General Motors and Ford announced last year they would stop Australian production, citing that growing costs and a strong currency have turned the country into an increasingly unappealing production base.

“We did everything that we could to transform our business, but the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia,” Toyota Australia President Max Yasuda said in a statement.

“This is obviously devastating news for everyone involved with Toyota. It’s devastating for me and for the government,” said Australian Prime Minister Tony Abbott.

“Once Ford and Holden went, it was always going to be hard for the last one to survive,” said Stephen Walters, JPMorgan Chase & Co.’s chief economist in Australia, citing the strength of the currency, small scale of local production and high costs. “There will be spillover effects in terms of employment lost in the car industry itself and related industries.”

As around 2,500 direct jobs would be affected by Toyota’s planned 2017 departure, Australian union leaders became very vocal about the government’s management of the auto industry’s business, as the general economy is also slowing down due to mining industry problems.