Toyota urges tariff-free trade with Europe as it puts £240m into Derbyshire car plant

Toyota plant
Toyota is investing £240m in its factory at Burnaston in Derbyshire

Japanese car giant Toyota has called for the UK to be able to continue to trade tariff-free with the European Union after Brexit as it announced a £240m investment in its only British factory.

Johan van Zyl, who runs the company's European arm, added his voice to earlier industry calls to protect British cars from tariffs within Europe following the end of the upcoming two year 'Article 50' extrication process which is set to be triggered by the end of this month.

“Continued tariff-and-barrier free market access between the UK and Europe that is predictable and uncomplicated will be vital for future success,” he said.

Toyota's investment will be seen as a vote of confidence in the UK despite fears that the car sector could be hit with punitive export tariffs after exiting the European Union. 

It comes at a tricky time for the British car industry, following concerns about Vauxhall's factories in Ellesmere Port and Luton after Peugeot's acquisition of General Motors' loss-making European arm last month, and concern about BMW's Mini plant in Oxford amid ongoing wrangling over the closure of its final salary pension scheme.

The new cash will be used to upgrade its Burnaston site in Derbyshire over the next 18 months so that the vehicles can be made using a new state-of-the-art system that should the manufacturing process more efficient.

The investment also includes up to £21.3m of support from the Government for training, research and development and to improve the plant’s environmental credentials.

Mr van Zyl added that the investment demonstrates Toyota’s willingness to do “all we can to raise the competitiveness of our Burnaston plant”, saying that it is a "sign of confidence" in its UK workforce. 

The factory, which employs some 3,400 staff, produced 180,398 Toyota Auris, Auris hybrid and Avensis models last year. 

Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, welcomed Toyota’s decision to invest further in the automotive sector. 

“Toyota is one of the world’s largest car producers and this inward investment underlines the company’s faith in its employees and will help ensure the plant is well positioned for future Toyota models to be made in the UK,” he said.

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Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: "It's essential that investment continues in plants across the UK to maintain our global competitiveness and put us in the best position to secure new models in the future.

"After a decline in investments in the sector last year, Government must continue to collaborate with industry and, as we leave the EU, deliver a deal that safeguards as many of the trading benefits we currently enjoy."

However, Professor Nigel Driffield, an international business specialist at Warwick University, said the £240m investment is dwarfed by the proposed $10bn (£8bn) that Toyota intends to invest in the US over the next five years.

"It is an amount that is not much more than 'ticking over'," he said. "Still, this announcement is further evidence that the car industry is confident that even in the event of a hard Brexit it will get the type of support that it needs from the Government to remain competitive.

"It is likely that tariffs in the car industry will be low between the UK and Europe."

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