Toyota to cut UK costs as sterling takes its toll

Toyota, the Japanese car maker is redoubling efforts to cut costs at its Burnaston plant in Derbyshire after its UK operations plunged into loss last year because of the strong pound.

Three quarters of Burnaston's output is exported to the Continent and the strength of sterling is thought to have wiped out profits in 1997. In 1996, Toyota Motor Manufacturing UK made pounds 10m, up from pounds 1m the year before.

The cost-cutting measures are likely to take the form of raising productivity levels further at Burnaston and driving down component costs. Bryan Jackson, the director of TMMUK responsible for finance, declined to give details of Burnaston's financial performance last year.

But he said: "Like many exporters, we have been hit by the strong pound. Because we cannot raise prices we have to tackle our production costs.

Production costs at Burnaston are 10 per cent higher than those of Toyota's car plants in Japan and the US and a priority will be to reduce this gap.

Last year Burnaston, which employs 2,650, raised productivity levels by 5 per cent. Production will increase from 105,000 to 160,000 this year with production of a second Corolla model beginning in September. But Toyota only plans to take on an extra 300 workers to cope with the increase. Output from the plant next year will rise to 220,000.

Burnaston's component purchases will double from pounds 500m last year to pounds 1bn in 1999. Half of its 200 suppliers are British and they account for 60 per cent of the components bought by value.

Toyota said it did not expect this ratio to change even after the introduction of the single European currency. Mr Jackson said TMMUK had not yet decided whether to follow Rover's lead by requiring all its suppliers to deal in euros from 1 January next year. A study team is examining the impact on Burnaston of the launch of the single currency.

Toyota aims to raise total European sales to 520,000 this year from 470,000 in 1997 as part of a global strategy of increasing world wide sales to five million.

It expects the overall European market to grow by only 2-3 per cent this year but expects its own sales to grow much more strongly in Germany, France, the UK, Italy and Spain.

Meanwhile, Toyota appeared to rule out joining the auction for the luxury car maker Rolls-Royce, which has been put up for sale by its parent company Vickers. Asked whether Toyota had requested a copy of the memorandum of sale from Rolls' financial advisers, Lazards, the president of Toyota Motor Europe, Tatsuo Takahashi, said: "To my knowledge we have had no discussions, no negotiations, nothing."

ebooksAn unforgettable anthology of contemporary reportage
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
Oscar Pistorius is led out of court in Pretoria. Pistorius received a five-year prison sentence for culpable homicide by judge Thokozile Masipais for the killing of his girlfriend Reeva Steenkamp
voicesThokozile Masipa simply had no choice but to jail the athlete
Arts and Entertainment
James Blunt's debut album Back to Bedlam shot him to fame in 2004

Singer says the track was 'force-fed down people's throats'

Life and Style
The Tinder app has around 10 million users worldwide

techThe original free dating app will remain the same, developers say

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album