2015 SUSTAINABILITY REPORT
Toyota is committed to contributing to society and the principles of sustainability. We understand our future success is dependent on a sustainable business model.
Dave Buttner was appointed President of Toyota Australia in May 2014.
He reflects that 2014/15 was a challenging year for the company following the decision to stop manufacturing by the end 2017. Yet against this background, he says Toyota was able to achieve some exceptional results.Dave Buttner
There is no doubt that the past 12 months have been challenging for Toyota Australia.
The decision to stop manufacturing by the end of 2017 was one of the saddest days, not only in our history, but also for Toyota globally.
This led immediately to a company-wide review of the functions, structure and location of our business beyond 2017. During this review we had to carefully balance our business needs versus the impact on our employees.
In December 2014 we announced the outcome of this review, which was to consolidate our corporate functions to Melbourne and significantly reduce the size of our business once we stop manufacturing.
While these decisions are necessary for our future business model, we understand that they will have a significant impact on our 3,900 employees. That is why we are committed to doing everything that we can to support them during the transition period.
Our people are our number one priority and we want to make this transition as smooth as possible for them.
Despite these announcements, however, it has been pleasing to see the ongoing commitment of our employees.
During the 2014/15 reporting period we achieved some exceptional results. We successfully prepared for the release of our last locally built vehicle - the new-look Camry - which went on sale in May. This was the culmination of almost four years' hard work and is the biggest mid-cycle update we've ever undertaken.
Toyota also retained its overall market leadership for the twelfth consecutive year and our Corolla topped the national sales chart for the second year running.
To achieve these results during such a significant period of change is testament to our employees and their passion for our company.
It is this level of commitment that will be vital to the company during the next few years. Not only do we need to prepare for the exit of manufacturing and consolidation of our business, but we also need to manage our daily operations and other key projects.
It's certainly a challenging time ahead of us, but I am confident that we will continue to achieve our goals and Toyota Australia will emerge as an even stronger company in the future.
President, Toyota Australia
Toyota Australia is a leading manufacturer, distributor and exporter of vehicles, operating under the Toyota and Lexus brands. We employed 3,982 people, including contractors, as of 31 March 2015.
Toyota Australia is a wholly-owned subsidiary of Japan's Toyota Motor Corporation.
We sell cars that are either imported to Australia or manufactured in Australia, to both private buyers and to private and government fleets.
Our customers across the country are serviced by our extensive dealer network which is made up of 210 Toyota dealers and 19 Lexus dealers who employ more than 13,000 people.
In 2014 Toyota was again named the world's most valuable automotive brand by Interbrand's Best Global Brands Report. Overall Toyota was ranked eighth, moving up two places from tenth position in the 2013 rankings.
For the seventh time in nine years we were also named the world's most valuable automotive brand in BrandZTM Top 100 Most Valuable Brands 2014 report.
For the ninth consecutive year Toyota was named the most trusted automotive brand in Australia, in a survey conducted by Reader's Digest.
The Australian-built Toyota Camry Hybrid was named the country's Best Green Car 2014 in the carsales.com.au Car of the Year awards.
Toyota Australia was announced as the winner of the large business category at the 2014 Victorian Premier's sustainability awards in October 2014.
In April 2015, Toyota was named Australia's most reputable company by the annual corporate reputation index, conducted by research consultants AMR in conjunction with the Reputation Institute.
* Actual headcount - the definite number of employees, excluding contractors. As of 31/3/2014 there were 80 (35 female/ 45 male) contractors working within TMCA.
** Full time equivalent - the total of the number of employees on full-time schedules plus the number of employees on part-time schedules converted to a full-time basis, excluding contractors. This number may vary slightly due to rounding up or down of numbers.
One of the key issues for employees during the reporting period was our transition to a non-manufacturing future.
In February 2015 Toyota Australia's President Dave Buttner announced the formation of a Future Business Model Action Learning Team, charged with consulting with employees to provide them with a voice to help shape the future of our company. The team engaged with employees to understand their perspective on what needed to occur to achieve our future vision.
Employees have also been involved in specific projects such as Project PACE - PArts Centre Evolution - a key element of our transformation strategy aimed at revolutionising our Toyota parts centres to meet Toyota best practice. Parts centre employees play a key role in the program by contributing ideas and suggestions on where and how improvements can be made.
Sustainability reporting provides us with the opportunity to disclose to our stakeholders how we are managing our key economic, environmental and social issues.
We believe that honest and transparent reporting helps build trust, motivate employees and gives us the opportunity to show that we understand the issues of interest and concern to all our stakeholders.
It provides us with a platform to demonstrate Toyota's commitment to measuring, monitoring and continually looking for improvement opportunities, as detailed in Toyota's global guiding principles and articulated in the Toyota Way.
Our sustainability report details the issues of most importance to our business and to our stakeholders, as determined through an assessment process that included input from internal and external stakeholders as well as a review of company strategy and risk documents, and consideration of issues being raised by Toyota Australia's peers, the industry and the media.
Our most important sustainability issues were determined to be:
Fundamental to Toyota Motor Corporation is a set of seven guiding principles which were adopted in 1992, defining the company's mission and underpinning Toyota's global operations.
The guiding principles are supported by the Toyota Way which was introduced in 2001 to articulate the long standing values of the company and the behaviours expected from all Toyota employees. Central to the Toyota Way are two platforms: continuous improvement and respect for people.
We are further guided by the Toyota global vision which outlines our aspirations as a company. Developed in 2011, it details the values and actions required to unite Toyota for future prosperity.
Toyota Australia's President's goals encourage and support a mindset of continuous improvement and respect for people, both fundamental platforms of the Toyota Way.
In February 2015 the goals were refreshed to reflect the current business environment. While 'zero harm' remains the highest priority, and 'product desirability' and 'market leadership' continue to be key focus areas, three new goals were added - 'respectful transition', 'customer centric mindset' and 'last car=best global car'.
In early 2015 we also launched a new strategic plan for the company aimed at guiding us through the transition and reflective of Toyota's aspiration to share one vision, one culture, one dream and to ultimately maintain our position as the number one car company.
In 2014/15 we reported total revenue of $8.2 billion and an after tax profit of $194 million for 2014/15* largely due to strong local and export vehicle sales.
Exports account for approximately 70 per cent of Toyota Australia's production with 64,381 vehicles sent to the Middle East, New Zealand and South Pacific Islands during 2014/15. We also began exporting to Thailand and Iraq.
Local production was down slightly with 88,470 vehicles manufactured.
Total domestic retail volume for both Toyota and Lexus combined was 264,947 vehicles, the strongest sales performance in five years.
*financial data is for the period 1 April 2014 to 31 March 2015.
Total domestic retail volume for both Toyota and Lexus combined was 264,947 vehicles for the Toyota financial year (1 April 2014 - 31 March 2015), the strongest sales performance in five years. The strong sales were in part due to healthy demand for Corolla, which has been Australia's top selling car for the past two years.
Australians bought 1,113,224 cars in the calendar year 2014 with the most popular choice once again being the Corolla with 43,735 sales (3.9 per cent of the market). The HiLux and Camry were also in the top ten. The HiLux was at number three with 38,126 new vehicles sales and the Camry at number eight with 22,044 vehicles sold.
Toyota was the top selling brand for the twelfth year (2014 calendar year) in a row with 18.2 per cent of the market or 203,501 sales. In February 2015 we also celebrated our six-millionth vehicle sold in Australia.
As we transition to our future business model following the end of manufacturing in 2017, we are focused on respecting all our stakeholders including employees, customers and supply chain.
We have established three key programs to support the transition. Project ONE is the umbrella program. It is supported by Franchise of the Future, designed to fundamentally change the culture and operations of Toyota Australia, Toyota Finance Australia and the dealer network, and Project PACE (PArts Centre Evolution), which is targeted at improving the competitiveness of the Toyota parts centres which are under threat from a variety of factors including parallel imports of genuine and non-genuine parts, as well as counterfeit parts.
Project ONE was established to manage the transition and set the overall strategy for Toyota Australia into the future. It focuses on:
As we transition to a non-manufacturing future we remain committed to the highest standards of production and supporting Toyota's global mission to provide safe and sustainable transport.
In April 2015 we unveiled our new-look Camry and Camry Hybrid which will be in production until the end of 2017. The launch marked four years work and the biggest ever mid-cycle vehicle update for the company. Its success was reflective of employees' dedication during difficult times.
In September 2014 Toyota Motor Corporation (TMC) selected Australia as the first location for an innovative driving and training project designed to help Toyota plan for future generations of vehicles.
Over ten weeks more than 30 TMC employees and executives drove approximately 20,000km around Australia in Toyota 4WD and passenger vehicles, including Camry, Corolla, LandCruiser and HiLux. Thousands of Toyota Australia employees were involved through the drive, live events, competitions as well as the opening and closing ceremonies. Among the participants was Toyota's global President Akio Toyoda, who drove a specially prepared Toyota 86 rally car along the roads near Coffs Harbour in New South Wales.
The project took participants through a series of diverse driving conditions, from busy city streets to the tough trails of the outback. The experience was designed to give the participants a deeper understanding of the world's roads and to strengthen their intuition when developing the next generation of Toyota vehicles.
We currently employ over 3,900 people but after we stop manufacturing in 2017 we expect this to reduce to approximately 1,300.
As we downsize, our overarching emphasis is on a respectful transition. We are committed to working with impacted employees to help them transition to new roles and locations within Toyota Australia, help others find roles elsewhere, while at the same time supporting our current business operations and the continuing workforce.
We continue to recognise employee health and safety as our top priority and achieving our President's goal of 'zero harm'.
Helping employees plan for the future has become a critical priority for Toyota Australia since our decision to stop manufacturing.
The DRIVE (dedicated, ready, individualised, vocational and energised) program was established to support employees across the business with comprehensive career development services provided.
DRIVE centres have been set up at Altona and Port Melbourne in Victoria, and at Woolooware Bay in New South Wales. They provide support through the review of personal and career goals and aspirations, identification of relevant training opportunities, job interview skills, superannuation information and financial tools.
Employees have the opportunity to access one-on-one appointments with case management consultants who can assist with career development services, including drafting individual career plans and applications for external training. Future assistance will include outplacement services, preparation for interviews and resume development.
The DRIVE Centres will provide employee transition services over the next two years, continuing to operate until six months after manufacturing closes.
Toyota Australia has a long tradition of supporting the community at both local and national levels.
Our community partnerships and investments are managed through the framework of the Toyota Community Foundation which is divided into two key areas. The first area relates to community sponsorships and promotions, and the second involves three funds - the local community fund, workplace giving fund and social development fund.
Employees play a key role in the management of the three funds with 12 employee champions selected from across the company for a three year term to make recommendations regarding programs and activities to be supported by the foundation.
We believe that it is important to share our knowledge and expertise with community partners. We recently identified the health care sector as an area that could benefit from Toyota's expert knowledge in running efficient production lines.
In 2014 Toyota Australia began a partnership with St. Vincent's Hospital Melbourne to streamline the patient experience when they attended hospital to receive chemotherapy. With the large number of steps and clinical decisions involved in the treatment of cancer, patients can wait up to an hour between various tests, results and treatments.
By applying concepts from the Toyota Production System and streamlining the process, Toyota Australia and St Vincent's aim to reduce the patient's appointment waiting time to 15 minutes and the time between doctor's consult and commencement of chemotherapy treatment to 30 minutes.
Two Toyota Australia employees spend one day a week at the hospital dedicated to making this project a success.
Effective environmental management is an important issue for all manufacturing based industries, particularly the automotive sector, due to its reliance on key resources and potential to impact its surroundings.
Toyota's approach is to make a positive contribution to the community and minimise our environmental impacts, a philosophy that is reflected in our global vision and principles, the Toyota Earth Charter and statement of environmental responsibility.
Our most significant environmental impacts are at our Altona manufacturing site which covers 76 hectares next to Kororoit Creek.
In October 2014 Toyota Australia was announced the winner of the large business category in the 2014 Victorian Premier's sustainability awards. The Premier's sustainability awards are held annually to recognise the businesses and community groups that have continually demonstrated excellence in achieving sustainability outcomes.
Toyota Australia's nomination was based on the extensive sustainability activities undertaken at our Altona manufacturing plant over the last 12 months. During that period we undertook a number of initiatives including the installation of the 500 kilowatt solar PV which is one of the largest installations in Australia, the installation of a world first biological treatment process in the paint shop leading to a 45 per cent reduction in water waste, the ongoing rejuvenation of the Kororoit Creek plant boundary, as well as numerous other projects undertaken by our employees in keeping with our focus on continuous improvement and maintenance of our environmental management system.
Our approach to managing and reporting on sustainability performance reflects the principles of inclusivity, materiality and responsiveness as defined in the AA1000 Assurance Standard (2008).
Our approach is also guided by the Global Reporting Initiative (GRI) G4 reporting guidelines which were released in 2013. We report in accordance with GRI G4 core reporting requirements.
A crucial feature of the G4 guidelines is an emphasis on identifying and reporting on those issues or concerns that are material to the business and our stakeholders.
More information can be found in the section above titled why we report, understanding our key sustainability issues.
*Note: The 2011 and 2012 Sustainability Reports were published in full online, therefore copies of these reports are not currently available for download.