Toyota chief wants to turn car maker into a British 'home brand'

Toyota's UK car manufacturing operations increased profits by 20 per cent last year, confounding the gloom in many other parts of the British motor industry.

The Japanese car maker said yesterday that its Burnaston assembly plant near Derby and its Deeside engine factory in north Wales made a pre-tax profit of £60.2m in the year to March 2006, compared with a £50.4m profit in the previous 12 months.

The improvement is in stark contrast to the plight of other UK-based car makers, with Peugeot closing its Ryton factory, Vauxhall cutting production at Ellesmere Port and Ford having put Jaguar up for sale after years of heavy losses.

Hein van Gerwen, the new managing director of Toyota's UK manufacturing operations, said he wanted the Japanese car maker to be treated as a "home brand" in the way that MG Rover and Ford once were.

Contrasting the way in which German and French motorists were more patriotic in their car-buying habits, Mr Van Gerwen said: "I think that maybe if we were perceived more as a UK car maker then we could sell more cars in the UK. We have to be seen as more of a local company."

Toyota sponsors its local football team, Derby County, and every car which rolls off the Burnaston production line is stamped "Made in the UK". Mr Van Gerwen, a former goalkeeper with the Dutch team PSV Eindhoven, said his longer-term aim was to double Toyota's UK market share to 10 per cent. At present, 85 per cent of Burnaston's output is exported.

Production of the Corolla and Avensis at Burnaston will reach about 280,000 this year and Mr Van Gerwen said Toyota had the capacity to increase that to more than 300,000 without going to a third shift.

He said Burnaston was now on a par with Toyota's manufacturing plants in Japan in terms of productivity and efficiency but that it had to keep driving out cost to be favoured for new model investment in three or four years.

Mr Van Gerwen said a third model could be built at Burnaston and that he would lobby hard for the UK to be chosen as the manufacturing location should Toyota decide to produce its Lexus cars outside Japan.

Toyota's aim is to sell 1.2 million cars a year in Europe by 2010 - of which 800,000 would be built locally. It seems almost certain to beat that target with European sales hitting 964,000 last year, of which 638,000 were locally produced at four plants in Europe.

Last year's profit improvement came despite a 30 per cent rise in raw material costs. Mr Van Gerwen warned profits would fall this year because of higher input prices, particularly for copper, aluminium and energy.

Toyota is aiming to improve the efficiency of its UK operations at an annual rate of 4-5 per cent while seeking to improve the cost effectiveness of its supply chain. It buys in £550m of components from UK suppliers, accounting for 45 per cent of its total needs.