A boss at car manufacturer Toyota has urged the Government to “lift the fog” surrounding Brexit negotiations and secure a deal to safeguard the competitiveness of its Derbyshire factory.
Speaking at the Tokyo Motor Show this week, the Japanese car-maker’s executive vice-president Didier Leroy said that uncertainty over the UK’s post-Brexit trading relationship with the EU was hindering its ability to plan for the future at its Burnaston plant.
The Derbyshire plant currently makes the Auris and Avensis – and around 85% of its output is exported to mainland Europe tariff-free.
But the fear is that once Britain breaks ties with Europe, Toyota and other UK car factories, will have to pay a levy of 10% on their exports, potentially damaging their competitiveness.
Do you want a job in manufacturing? You can search for one here
According to a report carried by the Financial Times, Mr Leroy said: “The UK government should … understand that we cannot stay in this kind of fog when we don’t know what will be the output of the negotiation.
“As quick as we can get clarity on that, better will be the way we can prepare (for) the future.”
The majority of cars made at Burnaston are exported
Mr Leroy added that any new import levy imposed on the cars made at its factory in Burnaston, Derbyshire, would have a “profound impact” on its business.
He said: “Today they (Burnaston) export 80-85% of their production to continental Europe, so if we move to something like an import tax, trade tax or any kind of additional penalty, it will create a big negative impact in terms of competitiveness for this plant.”
But Mr Leroy added that the company had trust in the plant and its workers and would fight hard to make it as competitive as possible, even if there are tariffs.
It follows similar comments made by Mr Leroy at the Frankfurt Motor Show last month in which he said that the lack of clarity over the Government’s position on Brexit left a “big question mark” over the company’s future spending in the UK.
Earlier this year, Toyota announced it would be investing £240 million in Burnaston, where it makes around 180,000 cars a year, to improve production processes.
Toyota’s Burnaston site (Image: Victoria Wilcox)
When approached by the Derby Telegraph, Toyota Motor Manufacturing UK, which as well as Burnaston has an engine-making facility at Deeside, North Wales, said its approach had remained unchanged.
It said: “We will closely monitor and analyse the impact on our business operations in the UK and how we can maintain competitiveness and secure sustainable growth together with the UK automotive industry and other stakeholders.
“We are supportive of our people and our operations. We are adopting a business as usual approach while the UK still remains within the EU.
“Our UK plants continue to be focused on making quality cars, safely, efficiently, flexibly to meet customer demand and at lowest possible cost. This is the same as before.
Toyota makes the Auris and Avensis models at its Burnaston factory
“For the longer term, the competitiveness of the UK automotive sector will be influenced by the result of the negotiations and the operating environment that develops at that time.
“At this point it is too early to speculate on the final outcome of those arrangements.”
The latest business happenings in our area
Mr Leroy’s comments come as the latest industry figures show the number of cars built in Britain went into reverse for a fifth month this year, with those destined for the UK market plunging by 14.2% in September as Brexit fears hit consumer and business confidence.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, of which Toyota is a member, said: “Brexit is the greatest challenge of our times and yet we still don’t have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought.
“Leaving the EU with no deal would be the worst outcome for our sector so we urge government to deliver on its commitments and safeguard the competitiveness of the industry.”
Source: Derby Telegraph