AUSTRALIA'S car manufacturing industry has received a shot in the arm with the opening of a multimillion-dollar engine plant in Melbourne's west.
The Toyota petrol-electric hybrid engine plant is the first of its kind built outside of Japan and makes Australia one of only four countries capable of producing the AR-series four cylinder engines.
It is expected to turn out 108,000 engines a year, 15 per cent of which will be hybrid engines.
Speaking at the opening of the plant on Thursday, Prime Minister Julia Gillard said the new hybrid engine plant was good news for the environment and good news for industry.
"It's a great example of the opportunities for manufacturing that come from Australia's move towards a clean energy future," Ms Gillard said.
"This is a red-letter day for blue-collar workers."
The federal government contributed $63 million to the new plant from its Green Car Innovation fund.
Toyota Australia president Max Yasuda said the opening of the plant was part of the company's overall mission to transform their operations and build a more sustainable business.
"I am a true believer in local car making," Mr Yasuda said.
"Building a new engine plant in Australia is at the head of our manufacturing strategy."
Toyota's senior managing officer Seiichi Sudo warned that even with the new plant, Toyota Australia will face more difficult times.
However, the plant will make the company more sustainable, he said.
Victorian Employers' Chamber of Commerce and Industry said the plant was a vote of confidence in the Victorian industry.
Ms Gillard said it was a win for Australian jobs.
"We are one of the few countries in the world with the capabilities and skills involved in the manufacture of cars from the design stage right through to the production stage," she said.
Australian manufacturing competed on quality and innovation, as well as on price, the prime minister said.
Victorian Premier Ted Baillieu said Victoria was a global leader of automotive production and exports and the new plant built on that position.
Mr Baillieu said he'd sum up the occasion with the words "Oh, what a feeling".
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