Toyota will use Australia’s incoming emissions standards as a “reset” across its dealer network – and it’s preparing for its sales numbers to drop in the process.
Australia’s New Vehicle Efficiency Standard (NVES) comes into force on July 1, 2025, and will force carmakers to bring more fuel efficient vehicles Down Under by imposing fleet emissions caps.
Undercut the caps, and brands will earn credits. Miss the targets and they face fines… or will need to trade credits with rival companies.
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“We’re approaching New Vehicle [Efficiency] Standards as an opportunity to reset our business,” Toyota Australia vice president of sales and marketing Sean Hanley told CarExpert.
“When we say reset our business, it’s not to say we intend to drop our volume dramatically.
“We certainly have no plans afoot to stop selling LandCruisers, or Prados, or HiLuxes, but clearly we have to balance the ledger up of credits vs penalties, and how that looks, and what impacts that’ll have,” Mr Hanley said.
Although it’s planning for a decrease in volume, Toyota doesn’t appear to be in danger of losing its place atop Australia’s sales charts.
To date in 2024 it owns 19.9 per cent of the Australian new car market, compared to just 8.0 per cent for its nearest rival at Ford.
Mr Hanley said the brand is “trying to negate any volume drop, but the reality is there may be” a decline – “and you have to scenario plan for that”.
“We’re not going in with the idea we want to drop sales,” Mr Hanley explained, “but it may be that we have to for a period – particularly if your product cycle is a bit delayed” through the transition to the new rules.
What we won’t see from Toyota are dramatic price hikes to cover the cost of any fines incurred in the first few years of the emissions standards, with Mr Hanley suggesting big price rises in such a crowded market are “fraught with danger”.
“It’s a fine balance, but we’re approaching this in a positive way. We’re approaching this positively with our dealers, and we don’t see a dramatic volume drop at all because of NVES,” he said.
“And because we have a good hybrid mix, plus BEVs of the future, plus fuel-cell – which is tiny, I know – plus Lexus which is pretty well electrified … we’ve got some time to really put some good plans in place and get this right.”
We’ve already seen changes in the Toyota Australia lineup in the lead-up to NVES hitting, although the brand has denied the emissions rules have driven its decisions.
The LandCruiser 70 Series is now only available to order with a 2.8-litre four-cylinder engine, with the final examples of the V8 rolling down the production line over the coming months.
You can’t order a Yaris, Yaris Cross, Corolla, Corolla Cross, RAV4, Camry, C-HR, or Kluger with a petrol-only engine. Instead, they’re only available with hybrid power.
The brand also offers the bZ4X EV in Australia, although sales have been slow relative to the market-leading Tesla Model Y.
