You are here

Toyota says Brexit may lead to 10% duties on UK-built cars

38716847 - 15_06_2016 - AUTOS-TOYOTA_.jpg
Toyota Motor Corp, the world's largest automaker, warned a withdrawal by Britain from the European Union may lead to levies of as much as 10 per cent on the cars it builds in the UK.

[TOKYO] Toyota Motor Corp, the world's largest automaker, warned a withdrawal by Britain from the European Union may lead to levies of as much as 10 per cent on the cars it builds in the UK.

Brexit would challenge Toyota to cut costs or make its cars more expensive and hurt sales, the automaker said in a letter Monday to its UK employees. Toyota provided a copy of the letter, which says the company exports almost 90 per cent of the vehicles it builds in the UK, and three-quarters of the cars are sold in the EU.

"Continued British membership of the EU is best for our operations and our long term competitiveness," Toyota said in the letter, signed by two executives at its UK manufacturing unit and a trade union representative.

"We will face significant business challenges as a result of a decision to withdraw from the EU."

Having invested US$59 billion in the UK, Japan Inc has been vocal in its support of Britain staying within the 28-nation trading bloc ahead of Thursday's referendum.

Nissan Motor Co chief executive officer Carlos Ghosn has said Britain staying part of the EU makes the most sense for jobs, trade and costs, while Hitachi Ltd Chairman Hiroaki Nakanishi has said Brexit may force the company to "rethink" its UK operations.

Carmakers and their suppliers share "widespread concern" with Brexit jeopardising jobs and investment, the Society of Motor Manufacturers and Traders said Monday in an e-mailed statement.

Advocates in the remain camp quoted by the trade group include Ian Robertson, BMW AG's head of sales, and Ken Gregor, chief financial officer of Tata Motors Ltd's Jaguar Land Rover.

Toyota said it's committed to its factories and employees in the UK, where it built more than 190,000 Avensis and Auris cars from its Burnaston plant in 2015.

Another factory at Deeside, where more than 200,000 engines and 35,000 components were produced last year, is set to build new 1.8-litre hybrid engines for the upcoming C-HR crossover.

BLOOMBERG