A worker assembles a Toyota Motor Corp. vehicle on the production line at the company's factory in Burnaston, U.K., on Friday, Feb. 18, 2011. Toyota Motor Corp. is aiming to post an operating profit at its parent company level on a monthly basis by the end of next fiscal year, said Executive Vice President Atsushi Niimi. Photographer: Simon Dawson/Bloomberg
© Bloomberg

Toyota’s car plant in Derbyshire will close for an unknown period of time if Britain leaves the EU without a deal, the facility’s manager has warned.

The Japanese group becomes the latest carmaker operating in the UK to warn of hits to production from a no-deal Brexit, after BMW’s Mini opted to move a planned shutdown to coincide with the weeks immediately following Britain’s departure.

Toyota’s Burnaston site, which employs around 2,500 people, will close because it will be unable to source the parts needed from Europe to build its cars, plant director Marvin Cooke told the BBC.

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

The stoppages could last “hours, days, weeks — even months,” he added.

More than half the parts that go into the 144,000 vehicles made at the site come from mainland Europe, often arriving just hours or even minutes before they are assembled into the vehicles, under the “just in time” delivery system.

Any hold up at the border would make operating such a system difficult.

Additionally, Toyota exports more than 80 per cent of the models it makes at the site to the EU, and these vehicles would face a 10 per cent tariff if the UK reverts to World Trade Organization rules after it has left.

That would make its products less competitive compared with European-built rivals, and would hurt the long-term prospects of the site, Mr Cooke said.

“In the longer term the burden of import and export costs would add permanent costs to our business, it would reduce our competitiveness. Sadly that would reduce the number of cars made in the UK and that would cost jobs.”

Toyota invested £240m into its site last year — aided by a £21.3m grant from the government — and announced earlier this year it would build the next generation of its Auris family car at the site.

Nissan, Honda and BMW have all opted to build new models in the UK since the Brexit referendum, in spite of the potential challenges posed by Brexit.

But as the date of Britain’s departure approaches with little sign of a deal to allow free trading with the EU, carmakers have increased their warnings about the impact on the sector.

Jaguar Land Rover, the UK’s largest carmaker, said a bad deal would cost “ tens of thousands” of jobs.

The industry is reliant on exports, with around 80 per cent of UK-made cars sold internationally, with more than half going to the EU.

Investment across the sector has fallen sharply since the vote, dropping to £1.1bn in 2017 from £1.7bn in 2016 and £2.5bn in 2015, according to the most recently available annual figures.

The Department for Exiting the European Union said it was determined to ensure that the UK continued to be one of the most competitive locations in the world for automotive manufacturing. “We are confident of securing a good deal and look forward to continuing to engage with the EU Commission on our proposals,” it said.

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