The president of Toyota stressed that the British government should avoid “at all costs” a no-Brexit deal. This is the latest episode of an influential Japanese investor commenting on the future of the UK economy.
The industry leader Akio Toyoda lamented that leaders from the UK and the European Union failed to come to an agreement earlier this year about the terms of trade between the block and the country after Brexit. The comments were issued on the website of the Japan Automobile Manufacturers Association.
“Apprehension is therefore growing that a withdrawal without agreement may become a reality,” said Toyoda, who is also chair of the manufacturers association.
Toyoda said, “it is necessary that an unimpaired trade environment between the United Kingdom and the European Union be maintained and that the automobile industry’s activities remain predicated on shared standards, including those regulating vehicle certification” for allowing Japanese carmakers to continue with contributing financially to the economies and job markets of both the UK and the EU.
14 production plants and 17 research and development and design centres are operated by Japanese car makers in the EU. 1.5m vehicles were manufactured by them last year and 170,000 people were employed.
If there is no agreement on trade between the UK and the EU, it would significantly negatively impact the Japanese car makers and their customers all across the EU because of “suspended production activities resulting from failed just-in-time logistics operations, declines in revenue and revised vehicle sales prices caused by spiralling logistics and production costs”, Toyoda said.
He said: “We hope that both the UK and EU governments will continue to make maximum efforts to reach a satisfactory settlement and that a withdrawal without agreement is avoided at all costs.”
Toyoda is the latest Japanese business leader who has issued a warning about possible hit in production and a revisiting of investments because of a no-deal Brexit.
Since the 1980s, more than £40bn has already been invested in the UK by Japanese companies like Toyota, Nissan and Hitachi. In the manufacturing, pharmaceuticals and financial services about 140,000 people in Britain have been employed by over 1,000 Japanese companies combined together.
Earlier in the month, warnings of very serious disruption of manufacturing operations in its north-east England plant was issued by Nissan in case of a no deal Brexit. More than 8000 people are employed by the company mostly in its plant near Sunderland. The UK companies that are Nissan’s suppliers employ an additional 30,000 people.
Reservations about a no-deal Brexit has also earlier been expressed by Toyota and has said that in such a situation there can be a temporary halt in output at its plant in Burnaston, Derbyshire. Last year, that plant, manufactured about 150,000 cars which was almost 90 per cent of the company’s total exports to the EU.
(Adapted from TheGuardian.com)