Credit to haileyxstudios on YouTube for finding and sharing info on this costume.
Psycho Teddy, an animated bear known for the song named after him, had an animatronic costume. There's hardly anything documented about it publicly, other than what's in two blog posts from sixty40, the company that animated the music video.
The first blog post is here, and the second one is here.
The first blog post was made on the 17th of July, 2008. They mentioned they were animating a new single at the time, and that the mascot will be appearing in Australian shopping centers during the school holidays. The blog post has a photo of a large, brown maquette, and a picture showing what fur textures a 3D model of Psycho Teddy has (likely for reference when making the costume). The blog post also has two photos of the unfinished costume.
The costume has a white head and pair of ears, a brown nose, a large green eye, and a smaller purple eye. Its eyebrows are drawn in red (yet to be placed on, I assume), and there are red lines on its face. Its head is covered in small squares (I'm not sure what they are supposed to be?), and it has gray eyelids that can blink via remote control. Its arms, legs, and body are black. Also, a pair of sunglasses was being made for him.
The sunglasses are a reference to the music video for Psycho Teddy's cover of "You Should Be Dancing". The company began referring to Psycho Teddy as DJ Teddy Z instead, around the time they released that cover, and the later blog post from the 4th of August, 2008 refers to the head of the costume as a "Teddy Z head".
The later blog post had an image of the completed suit being worn at Sony, but it was not archived on the Wayback Machine.