No-deal Brexit would be ‘disastrous’ for Toyota and could cost £10m a day, MPs hear

Advertisment

Toyota has given a warning to the MPs that a no-deal Brexit would become “disastrous” to its car-making operations in the United Kingdom, and could cost the firm approximately £10 million per day.

Toyota’s deputy managing director in Europe, Tony Walker, said that it was “unimaginable” that it would be able to change its customs procedures to meet the rules of the World Trade Organisation (WTO) overnight, if the United Kingdom crashed out of the European Union at the 29th of March 2019 without a deal.

During a speech that was addressed to the business select committee, he said that the draft withdrawal agreement of Theresa May, the British Prime Minister, was “much better than the confusion we have had. I don’t think I am alone in business in saying that.”

He continued: “To say because it is not perfect we should go back to square one is not understandable to us as business people.”

His comments come after similar sentiments from firms such as Airbus, whose senior vice president for the United Kingdom described the deal as a “step forward” which could enable the company to restart frozen UK investment if the MPs voted it through.

Walker added that imposing different emissions rules on cars in the United Kingdom as to those in the European Union would push the prices up for its buyers.

He stated: “If we were to have different emissions regulations, the costs would be huge and that cost would be passed on to the market.”

He added: “It means that the UK consumer would pay for the R&D costs of those additional or more stringent regulations.”

Toyota has established its operations in the United Kingdom 30 years ago on the invitation of then-PM Margaret Thatcher to use the country as its European hub. Walker said that as a result, Japanese firms were “disappointed” with the decision to withdraw from the European Union.

Walker reemphasised the concerns that the company has asserted in the past months over how a no-deal Brexit scenario would hurt the UK supply chain of the company.

He stated: “Toyota have 50 trucks a day coming through the tunnel and hold just 4 hours of parts. Everything has to be in sequence.”

He added: “It would be very very difficult for us to cope with. The supply chain across Europe is integrated, it’s also collecting parts for other plants in Europe.”

He continued: “The value of the cars we make is £10 million a day. If we lose that sort of value, it’s very very challenging for us.”