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Toyota to Upgrade UK Car Plant as Brexit Decision Looms

March 16, 2017
“We are very focused on securing the global competitiveness of our European plants,” said Johan van Zyl, chief executive officer of Toyota Motor Europe.

Toyota Motor Corp. (IW 1000/6) plans to upgrade its U.K. car-making plant in a sign that concerns about Brexit won’t derail its investments in the country for now.

The world’s second-biggest auto manufacturer will spend 240 million pounds (US$294 million) to update equipment and technology at a factory in Burnaston, England, to allow the production of models on its latest platform, Toyota said on Thursday. Pending due diligence, the U.K. government will supply an additional 21.3 million pounds for training, research and development.

“We are very focused on securing the global competitiveness of our European plants,” Johan van Zyl, chief executive officer of Toyota Motor Europe, said in a statement. However, he warned that “continued tariff-and-barrier free market access between the U.K. and Europe that is predictable and uncomplicated will be vital for future success.”

Carmakers are concerned that the U.K.’s exit from the European Union may lead to costly trade barriers, hampering the free movement of components and vehicles between production sites and end consumers across Europe. Toyota rival Nissan Motor Co. has said it wants the government to spend 100 million pounds to help build the country’s supply base and pledged to expand production at its Sunderland plant only after receiving assurances about Britain’s policies toward the industry.

Ford Motor Co. is planning to cut costs at its Bridgend engine plant in Wales, which could mean job losses, and BMW AG is reportedly weighing whether to build its electric Mini in Germany rather than the existing factory near Oxford, after Brexit.

Toyota’s investment is part of a global upgrade of facilities and is not related to Brexit, a spokesman said. More than 75% of the 180,000 Auris and Avensis vehicles that came out of that factory last year were exported to mainland Europe.

The upgrade of the factory will enable production of new vehicles using the so-called Toyota New Global Architecture, or TNGA, which debuted on the Prius hybrid in 2015. Toyota says the TNGA program aims to trim manufacturing costs by as much as 30%. 

By Subramaniam Sharma

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