In an effort to encourage the manufacture of vehicles to tide over the current oil crisis, Australian Prime Minister Kevin Rudd yesterday announced a $35-million grant to help Toyota build hybrid Camrys at its Altona plant. This grant is part of the government's $500 million Green Car Innovation Fund to back manufacturers that are willing to invest in hybrid cars.

Toyota announced the start of hybrid production in Melbourne as Australian Prime Minister Kevin Rudd visited the automaker's headquarters in Nagoya, central Japan. It plans to build 10,000 Camry hybrids per year in Australia.

The existing Altona plant, which employs 4,500 people, will be the manufacturing base and the headcount may also go up in the near future, according to Toyota CEO Katsuaki Watanabe.

Standing next to the Australian prime minister, he added, "Due to Australia's high interest in global warming and environmental issues, we are confident that the Camry Hybrid will be welcomed there.''

Rudd said increased popularity of the hybrid would help Australia cut back on emissions blamed for global warming.

"This hybrid will use one-third less petrol than a standard car, one-third less emissions and therefore for an average family ... savings of up to 1,000 dollars a year," Rudd told reporters.

"Australia must do whatever we can to assist Australian motorists who are faced with the challenge of rising fuel prices and also... in our overall efforts to bring down greenhouse gas emissions," he said.

However, opposition lawmakers have derided the move as ''a $35 million photo opportunity'' for the prime minister, and said that comments from Toyota officials show the company would have begun hybrid car production at its Altona factory in Victoria even without the multi-million largesse from taxpayers' money.

Reports in some of today's newspapers say Toyota had already decided to build a hybrid version of its Camry sedan and the announcement was due to be made "within months".

"Whilst I'm sure Toyota welcomed the $35 million, it's now quite clear that it was not a decisive factor in their decision to build the hybrid plant in Victoria," Senator Abetz said. "It seems that the $35 million was a very expensive photo opportunity for the Prime Minister in Japan and has not done anything other than possibly brought forward the decision of Toyota."

Toyota has responded that the grant had been crucial in securing the manufacturing deal.