Toyota Warns on Hard Brexit

The chairman of Toyota has reacted cautiously to a speech by the British prime minister Theresa May in which she tried to reassure companies about the implications of the Brexit.

The speech included an offer of support for international auto makers, such as Nissan and Toyota, which use their British factories to export to Europe.

The prime minister said she would seek special terms for automotive companies during negotiations on Britain’s withdrawal from Europe’s Customs Union, which ensures that goods move freely between its member countries. For car makers like Toyota, whose components cross borders many times during the manufacturing process, the customs union is an attractive aspect of EU trade.

When questioned about Mrs May’s speech at the World Economic Forum in Davos, Toyota’s Chairman Takeshi Uchiyamada told the Financial Times that the Brexit is likely to impact his company’s UK operations.

He suggested that the Toyota factories in Burnaston and Deeside – which employ 3,000 workers – would need to raise their level of competitiveness.

“As a UK company, if the situation changes, it is important for that company to make efforts so that they can maintain their competitiveness and continue their business,” Mr Uchiyamada told the FT.

Around 75 percent of the Toyota cars made in Britain are exported to Europe.

Even though Mrs May promised to seek special terms for car-makers, she said membership of the customs union was incompatible with Britain’s goal of global trade.

She also committed to take Britain out of the single European market, which has previously benefitted Japanese companies which use the UK as the base for their European operations.

Nearly all Japanese business leaders surveyed by the Japanese Chamber of Commerce and Industry (JCCI) last year said that they were against Britain’s exit from the European Union. Japan’s Prime Minister Shinzo Abe also indicated he was in favour of Britain remaining in the EU.

After the initial shock of the referendum, the British economy has grown faster than most economists expected and Japanese investment into Britain has risen.

Nissan, which has a large factory in the North of England, was among the Japanese companies which agreed to raise investment in the UK following the Brexit vote. Its decision followed talks between managers and senior British ministers.

Mrs May strongly advocates increased trade between Britain and nations outside the EU.

She said the Brexit presents an opportunity “to build a truly global Britain.”

Her speech included a commitment for Britain “to get out into the wider world and to do business around the globe.”

She said continued membership of the EU’s single market would restrict Britain from taking independent decisions about immigration.

EU rules state that countries which subscribe to the free movement of goods within the single market must also accept the free movement of labour, which allows people from any European country to move to another EU country for work.

Leave a Reply

Your email address will not be published. Required fields are marked *