Toyota issues warning over no-deal Brexit as it slashes profit forecast

‘We cannot avoid negative impact no matter how much we prepare beforehand if Britain leaves EU with no deal,’ senior managing officer Masayoshi Shirayanagi says

Toyota slashed its profit forecast for 2019 and warned that it will be impossible to avoid the harmful effects of a no-deal Brexit.

“We cannot avoid the negative impact no matter how much we prepare beforehand if Britain leaves the EU with no deal,” the firm’s senior managing officer Masayoshi Shirayanagi said on Wednesday.

He said Toyota “will monitor the situation, hoping that it will not happen”, adding it was not currently considering production changes.

His comments come just days after Nissan said it would build its new X-Trail in Japan rather than at its plant in Sunderland.

Toyota, Japan’s biggest car manufacturer, employs about 3,000 people in the UK, mostly at its vehicle manufacturing plant in Burnaston, Derbyshire, and an engine factory in Deeside, North Wales.

Toyota warned in December that a no-deal Brexit would cost the company $10m (£7.7m) a day through delays to its supplies. That followed comments in October from Marvin Cooke, managing director of the Burnaston plant.

“My view is that if Britain crashes out of the EU at the end of March, we will see production stops in our factory,” he said at the time.

Toyota said on Wednesday that net profits would fall by a quarter this year due to losses on investments in other companies and was not due to falling profits in its core vehicle-making business.

The company said it now expected net income of 1.87 trillion yen (£13.2bn) with a steeper profit decline than the manufacturer predicted in November, when it announced expectations for 2.3 trillion yen in net income, down 7.8 per cent from its 2018 financial year.

Toyota left its projections for sales and operating income unchanged at 29.5 trillion yen and 2.4 trillion yen, respectively.

The company is forecasting that its consolidated global vehicle sales will hit 10.55 million, up 50,000 units from the previous fiscal year. Toyota updated its foreign exchange rate projections.