Toyota's decision to shut down local manufacturing, which is expected to cost thousands of jobs and billions in investment, comes despite the Japanese car maker receiving government grants of up to $492 million over the past four years.
The decision, which also comes despite Toyota swinging into profit last year after years of losses, will leave Australia without a local car maker.
Toyota to cease manufacturing in 2017
Dick Johnson a guided tour of Bathurst
Riding to Bathurst with Dick Johnson
Isle of Man TT wheelie record
Ford Falcon XR GT meets XR8 Sprint
Forza Horizon 3 vs the real world
Driving the first Aussie-made Ford
'Hoonigan' blocked from Sydney
Toyota to cease manufacturing in 2017
Toyota to follow Holden and Ford and end its local production.
Toyota's announcement on Monday that it would stop manufacturing cars in Australia by 2017 follows in the footsteps of Ford and Holden, and could spell doom for component manufacturers who depend on the car makers.
Last year, Toyota spent $1.5 billion on building cars in Australia, part of a $21.5 billion industry that now faces extinction.
Toyota has traditionally not disclosed how much taxpayers' money it receives, burying the figure among ''sundry income'' in its annual financial accounts.
However, in its most recent accounts Toyota revealed that over the past two years it reaped a total of $154 million under the federal government's Automotive Transformation Scheme, which is designed to help manufacturers become economically sustainable.
Toyota received about $72 million from the ATS in the 2013 financial year and about $82 million from the scheme in the previous year.
In both years, Toyota received tens of millions more in other sundry income from undisclosed sources.
Toyota's older accounts provide less detail, but reveal it received $127 million of sundry income in 2011 and an additional $126 million in 2010.
A Toyota spokeswoman could not be reached, but in the past the company has said it would be an ''overstatement'' to attribute the entire sundry amount to government grants.
And in a November submission to the Productivity Commission's review of the auto-manufacturing sector the company defended the handout.
''This meant for every $1 received from the government [under the ATS], Toyota Australia spent more than $20 in Australia in connection to local manufacturing,'' the company said.
Toyota declared a profit of $149 million in 2013.
This followed three years in which the company ran up losses totalling $153 million, due to payments it made to the Tax Office to settle a transfer pricing dispute.
Battered by a soaring Australian dollar and competition from low-wage countries, the manufacturing industry has endured tough times over the past five years.
The Australian Industry Group said the sector, in its current state, is not ready to absorb the tens of thousands of workers who could be displaced.
Chief executive Innes Willox said the government should help affected businesses find markets overseas.
''The automotive assembly companies have long held key roles in the development and diffusion of technological, process and design-led innovation in Australia,'' he said.
Diver Consolidated Industries chief executive Jim Griffin, who is also president of the Federation of Automotive Products Manufacturers, said Toyota's departure meant ''a demise of the complete industry''.
''We're not just seeing one or two companies leave,'' he said.
''There are still people in the industry who are 90 to 100 per cent dependent on the automotive business and that's going to be a problem.''
''It's imperative that the government works with industry to develop programs and plans to lessen the blow and facilitate a transitioning of the industry into new ventures,'' Mr Griffin said.
HSBC's chief economist for Australia Paul Bloxham said the Australian company could not compete with low-cost manufacturers.
''Had the Aussie dollar been lower, it would have taken the pressure off some of the manufacturers, but they still have to face a range of different challenges to do with the lack of productivity and competitiveness in many parts of the Australian economy.''
While the resources sector was central to Australia, the viability of the auto sector has remained questionable, RBS senior currency strategist Greg Gibbs said.
''It would be a bit rich to blame it all on the exchange rate but certainly the exchange rate, at close to US90¢, is historically very high from a manufacturer's point of view.''
With Glenda Kwek