Kevin Rudd is expected to announce a new deal to make hybrid cars in Australia when he visits the headquarters of giant carmaker Toyota in Japan today.

There is speculation that Mr Rudd will use the trip to the Nagoya plant to announce a deal for the company to start producing Camry hybrid family sedans at its Altona plant outside Melbourne.

The Japanese media is tipping Toyota to make a big announcement on the expansion of its hybrid-manufacturing plants in Australia and Thailand.

The Federal Government has declined to confirm reports of the Altona deal.

Australian Manufacturing Workers Union spokesman Dave Oliver says the move would give the embattled local car industry a strong footing for the future.

"We need to consider the type of vehicles people will be driving in the next 10 to 20 years and positioning the Australian manufacturing industry of motor vehicles to be well-positioned to meet that - not only for the domestic market, but also position itself for import-export strategies," he said.

"For every one direct job that is produced, there's six or seven related others in in service sectors or auto component sectors, and the benefits will flow from there."

The Chamber of Automotive Industries says producing the new hybrid vehicle at Altona will help restore confidence in Australia's car industry.

Spokesman Andrew McKellar says he is keen to see the details of the announcement.

"It would be an extremely significant development and indeed a very exciting development," he said.

Later in the day, Mr Rudd will visit an exhibition in Tokyo of works by Aboriginal artist Emily Kame Kngwarreye.

The collection is believed to be the largest ever international show of works by an Australian artist.