Toyota Australia invests $100 million to trim new-car delivery times

In what is believed to be a world first, the former Toyota Camry factory site in Melbourne has been transformed to pre-deliver new cars on an industrial scale – to boost output and trim delivery times.

EXCLUSIVE

Toyota Australia has taken the extra-ordinary step of transforming its former car-assembly site in Melbourne into a $100 million pre-delivery mega centre that aims to trim delivery times for new vehicles.

Preparing a new car ahead of customer handover typically takes dealerships hours, days, or weeks depending on the options fitted to each vehicle.

However, with the pre-delivery process now on an industrial scale, Toyota Australia can put the finishing touches on up to 270 vehicles a day – one car every two minutes rolling off robotised inspection lines – before they are sent to showrooms ready for customer handovers.

The facility in Altona on Melbourne’s outskirts previously manufactured Toyota Camry sedans for Australia and the Middle East.

The site has since undergone a multimillion-dollar renovation and remodelling – including a parts and accessories fitment area and pre-delivery mega centre.

It is now also home to Toyota Australia’s largest parts warehouse – a 50,000 square-metre building that distributes 26,000 parts a day – and an 85,000 square-metre outdoor vehicle storage area as part of a major revamp of the Altona site following the end of local vehicle manufacturing in 2017.

The 25,550 square-metre pre-delivery building – previously the Toyota Camry body shop – is larger than the Melbourne Cricket Ground.

For now, the pre-delivery mega centre in Melbourne only supplies vehicles to Toyota dealers in Victoria and Tasmania, however the Japanese car giant says it is looking to establish similar facilities in other Australian states.

The pre-delivery mega centre has created more than 100 new jobs; fewer than 10 per cent of the workforce are former Toyota production-line workers.

The opening of the Altona facility in November 2022 allowed almost 50 dealers in Victoria and Tasmania to redeploy their pre-delivery staff to other parts of their businesses – and shorten service centre wait times.

The pre-delivery mega centre – officially known as Toyota Centralised Services – reduces the need for dealerships to maintain large holding areas for vehicles, and eases the pressure on their parts and accessories inventories.

Because the vehicles are centrally located, Toyota dealers can swap stock among themselves before a car has been delivered to their showroom, saving time and money – and avoiding double handling.

Toyota sells 16,000 to 20,000 cars each month in Australia, representing approximately one-in-five new vehicles sold nationally.

The Altona pre-delivery mega centre – which services Victoria and Tasmania – has outdoor parking space for 4400 vehicles, of which 3950 are under 85,000 square metres of hail nets, while the balance of 450 vehicles are in an open area ready for immediate transport.

A digital QR code on each parking spot – and at each accessory fitment station – enables workers to scan what parts are needed, where the car is, when it is ready to be fitted out, and when it is completed.

More than 1000 types of Toyota accessories are on site, though only genuine parts are available. Customers can still fit non-genuine accessories to their vehicles after taking delivery, or if the dealer is prepared to do so.

Dealerships complete the vehicle registration process – and conduct a final inspection – before the customer handover.

For now, dealerships still take care of window tinting and paint protection. However, Toyota says it may expand its offerings to include window tinting and paint protection in future if there is demand from dealers who don’t want the hassle.

Toyota Australia says having a team of experts repeat the accessory fitment process on an industrial scale will lead to better quality results – and streamline the process to trim delivery times.

As cars become more complex, Toyota Australia says the fitment of accessories will require more technical expertise and specialist equipment.

Before reaching the final inspection stage, the Altona site has 24 work bays to install bullbars and heavy-duty accessories on four-wheel-drives and vans.

Special hi-tech calibration equipment is used to reprogram sensitive radar safety sensors in a matter of minutes after a bullbar or nudge bar has been fitted.

The same calibration check in a dealership pre-delivery centre takes an hour or so to complete – after the accessory is fitted – because it is more of a manual process using basic equipment.

“As we progress to more connected and electrified vehicles … the pre-delivery process is going to become more and more complex, hence the reason we need to be able to offer consistent quality at every step before customer handover,” said Toyota Australia vice president, sales and marketing, Sean Hanley.

When it comes to resetting safety sensors after other parts have been removed and replaced – or bullbars and other heavy equipment have been installed – Mr Hanley said: “No-one can afford ‘near enough is good enough’ in this new world.”

The Toyota Australia executive said the company has been working on the idea of a pre-delivery mega centre since 2016 – a year before the closure of the Camry assembly line.

“As we explored better and fairer ways to allocate stock and improve the customer experience, we quickly realised we needed to take more management of our vehicle movements and logistics, and gain efficiencies in how quickly we could get cars to customers,” Mr Hanley told Drive.

“And then we realised we had this big block of land (the Toyota Camry factory site) becoming available, and it evolved from there.”

The senior Toyota Australia executive said the company plans to roll-out similar pre-delivery mega centres in Sydney, Brisbane and beyond – once the Melbourne site is up to speed.

“The purpose of this operation – which was a start-up for us – is to get the business model right, get the process right, get the quality right. When we’ve got this up to Toyota quality we then can expand,” said Mr Hanley.

“Our goal is to roll this out nationally. We understand there are different circumstances in different cities.

“We considered expanding capacity at the Altona site, but it’s not logical to send cars from here to Queensland, for example.”

The Toyota executive said the national roll-out of the pre-delivery mega centre will enable dealers to redeploy workers to other parts of their business where there may be staff shortages.

“We have a massive car park (of vehicles) out there that we need to keep servicing,” said Mr Hanley.

“We’re saying to our dealers, please use this capacity we’re creating to invest in other areas of the business. At the moment, most dealers are moving (pre-delivery specialists) into their service areas.”

While Toyota Australia is preparing to add hydrogen and electric vehicles to its future line-up, the company has also installed its own fuel bowsers so every new car leaves the pre-delivery mega centre with a full tank.

Toyota Australia says it pumps about 17,000 litres of fuel a day from two 55,000-litre tanks – one for diesel and the other for the three types of unleaded (91, 95 and 98-octane).

For now, Toyota’s pre-delivery mega centre – which includes every last detail right down to the correct tyre pressures, and headlight adjustment on vehicles equipped with heavy accessories – is exclusive to Victoria and Tasmania.

However, the company plans to expand to the next most-populous states – NSW and Queensland – before venturing into the Northern Territory, South Australia and Western Australia.

Given the cost of real estate, the infrastructure, and the technology required inside the facility, the investment in each new outlet is expected to be in the hundreds of millions of dollars, and therefore a national roll-out will likely be gradual.

“Dealers in other states are asking for this, but we need time to get the process 100 per cent right before we look to expand into other regions,” said Mr Hanley.

The investment in the revamped Altona site comes after global Toyota boss Akio Toyoda made a pledge to leave a legacy following the end of local car manufacturing in 2017.

In addition to the pre-delivery mega centre and new parts warehouse, Toyota Australia has so far invested in a new design studio, a new technical training centre, a hydrogen hub, a test track, and a new dedicated facility for the final assembly of the Toyota HiLux Rogue and upcoming Toyota HiLux GR Sport ute.

While the total investment in the site is in excess of $150 million, approximately $100 million of that covers the 25,500 square-metre pre-delivery mega centre, the 85,000 square-metre vehicle storage area, the new 50,000 square-metre parts warehouse, and the specialised Toyota HiLux Rogue and GR Sport final assembly facility.

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