Toyota warns no-deal Brexit would stop UK production

Vauxhall also said leaving the EU with no agreement in place would impact its operations in the UK

Toyota has warned that a no-deal Brexit would lead to a temporary stoppage in UK production, and hit investment in Britain.

The Japanese car group employs more than 3,000 people across two manufacturing plants in the UK, one at Burnaston, in Derby, and one at Deeside, in Wales.

Toyota’s Europe president, Johan van Zyl, told the BBC at the Paris Motor Show this week that if the UK were to leave the EU without a deal, it would cause a disruption that would force the company to halt production.

Because Toyota, like many other car makers, follows a “just-in-time” production system, it only keeps four hours’ worth of parts on-site at its Burnaston plant.

This means the company requires constant restocking, with an average of 50 trucks delivering components from the EU each day.

As such, Mr van Zyl said, it is difficult to predict how long any stoppage period would last. Toyota’s warning follows BMW’s decision to bring a planned maintenance stoppage at its Oxford plant forward to coincide with the beginning of Brexit.

Meanwhile, Vauxhall owner PSA told Reuters that a departure with no agreement would “necessarily” hit production.

Maxime Picat, executive vice president for Europe at PSA, said: “We’ve been doing all we can to develop our UK business, restore Vauxhall and Opel profitability, reinvesting in Luton and improving our sites’ competitiveness in order to help them face up to an uncertain future.

“But there are limits. Those limits are customs barriers, and the loss of freedom of movement, for people and goods. If we get to that point, we will be obliged to take measures.”

Mr Picat added: “If we suddenly have to start manufacturing for the UK in the UK, and for Europe in Europe, there will necessarily be an impact on UK production.”

“We’re not going to be dogmatic about it, and there’s no question of punishing the UK. We’d take a look at our two factories, the state of our business, and look for a solution. But I don’t know where that will lead us in terms of the sustainability of our sites.”

A number of other car makers have stated that a no-deal Brexit poses a threat to the UK motor industry.

Honda has said that a no-deal Brexit would cost it tens of millions of pounds, while Jaguar Land Rover has moved workers at its Castle Bromwich plant to a three-day week because of “continuing headwinds impacting the car industry”.

Ralf Speth, Jaguar’s boss, has previously warned that tens of thousands of jobs in the UK motor industry are at risk if a no-deal Brexit goes ahead.

He also said the current lack of clarity around Brexit means he does not know if his plants will be able to function after 29 March 2019, and added that interruptions to production could cost up to £60m a day.

Additional reporting by newswires