Australia's first locally produced hybrid car is officially on the way.

Toyota Australia today marked the start of pilot production of the ultra fuel-efficient Hybrid Camry with a ceremony at the company's Altona plant in Melbourne's west.

Victorian Premier the Hon. John Brumby, Federal Minister for Innovation, Industry, Science & Research, Senator the Honourable Kim Carr and Victorian Industry and Trade Minister the Hon. Martin Pakula MLC joined Toyota executives to mark the historic event.

Premier Brumby and Federal Industry Minister Senator the Hon. Kim Carr, pushed a "power" button to officially commence pilot production.

They were flanked by Toyota Australia's president and chief executive officer Max Yasuda, senior executive director sales and marketing David Buttner and executive director manufacturing and purchasing Tatsuo Shinozaki.

In the pilot production phase, Toyota produces a small batch of vehicles to test all its processes, parts and assembly methods.

Full-scale production is due to begin in December and Hybrid Camry will go on sale in February next year.

Mr Yasuda said Toyota led the world in hybrid vehicles and was committed to remaining at the forefront of innovation and environmentally friendly technology.

He said introducing hybrid technology in Toyota's local manufacturing was one of the most significant developments in the company's 50-year history in Australia.

"This has the potential to change the automotive landscape forever," Mr Yasuda said.

Mr Yasuda said Toyota was working towards a sustainable local automotive industry that supported jobs, innovation and, ultimately, a prosperous low-carbon society.

"This aligns with Toyota's global strategy to accelerate the roll-out of eco-friendly vehicles.

"A practical demonstration of this is the introduction of new Hybrid Camry here at Altona."

Toyota plans to produce at least 10,000 Hybrid Camrys per year for the domestic market and 300 per year for export to New Zealand.

"The strong support of both the Federal and Victorian Governments was a critical factor in our ability to secure Hybrid Camry for local production," Mr Yasuda said.

"They helped Toyota Australia to make a convincing business case.

"A vital element was the strong desire of both levels of government to introduce new environmentally friendly technology and promote innovation within the Australian automotive industry."

The support of Toyota Motor Corporation in Japan was a great vote of confidence in the ability of the Australian company.

"It demonstrates that our manufacturing operations can compete with the best in the world.

"We have responded to the needs of Australian motorists by introducing fuel-saving and environmentally friendly technology as a mainstream option."

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