Toyota Australia, which just built its 2,000,000th car Down Under, is worried about exports after the parent Japanese group’s new Chinese production plant starts making the Camry in 2006, president Ted Okada has said.

But Toyota was confident of maintaining market leadership in Australia, and the company’s profitability would improve, the Age newspaper reported.

According to the report, Okada, a former head of Toyota’s Chinese operation, sounded a clear warning: “We must ensure that Toyota Australia holds a competitive advantage over our Chinese affiliate, which is preparing for the start of Camry production in 2006.”

The Age said he gave no specifics about the threat, but noted that Toyota Australia’s exports to the Middle East are subject to wide fluctuations against the US dollar, while the Chinese currency is effectively pegged – this makes the company’s 65,000-car export trade vulnerable.

The newspaper noted that, last year, there was speculation about the future of the Altona plant in Melbourne when the trade agreement with the US was taking shape, on suggestions the Kentucky Camry plant might supply the Middle East more cheaply though Toyota Australia at the time dismissed the threat, saying it was competing “extremely effectively” globally.

Volkswagen Australia recently began importing the first of what is expected to be several hundred Chinese-made Polo sedans for 2004.