Toyota, Honda and BMW Warned to Exit from UK

JAKARTA (TheInsiderStories) – Amid the protracted and energy-consuming “British Exit” (Brexit) negotiations, international car producer Toyota Motor Corp warned might to end manufacturing in the United Kingdom (UK) if the country left the European Union (EU) without the mutual agreement.

“If the business environment becomes very difficult to operate, of course such decisions must be on the agenda,” Chairman of Japanese companies in Europe Johan van Zyl, told media at the Geneva Motor Show, on Wednesday (03/07).

He said Toyota would overcome a short-term problem at the Burnaston car factory near Derby, like logistics, which caused by leaving without an agreement. But the preparation for not making a transaction is expensive and in the long run these things can be “very difficult”.

“The long-term effect is if (Brexit) is very negative, the results are possible,” he said.

This Toyota executive statement follows the decision of Nissan Motor Co. which last month worked to build an X-Trail sports vehicle in the UK and the announcement of Honda Motor Co. which plans to end production in the country by 2021.

As known, Britain has long been the land of the Japanese car industry for European car production, where Honda, Nissan and Toyota have three of the six largest factories in the country.

Toyota has pledged an investment of 240 million pounds (US$316 million) in 2017 to produce a new version of Corolla in the UK and upgrade its vehicle platform, and now produces around 180.000 cars per year in Burnaston.

Toyota employs more than 3.000 peoples at its two factories in the UK, which include motorbike makers in Wales.

Therefore, Toyota still hopes that Britain and the EU will reach an agreement on Brexit requirements. Next week, the British Parliament will vote the final version of the proposed exit agreement. But if Member of Parliaments rejects again, it will choose whether to leave without agreement or delay Brexit.

“If there is bad Brexit, we need to see investment in the future,” Zyl said.

Previously, BMW board member Peter Schwarzenbauer also said that if the “worst case” scenario without an agreement occurred, BMW would need to consider the future investment in the country. So far, BMW has produced Mini at Cowley near Oxford.

BMW chief executive Harold Krueger said that the automaker was preparing “for many scenarios” and “very flexible” in its approach to production.

He said the company had ordered several air flight capacities to transport larger materials and had prepared its suppliers.

Meanwhile, Japanese companies such as Sony, Panasonic and Hitachi have stepped up operations in the UK ahead of the country’s departure from the European Union.

In Indonesia, on 2015-2017 Toyota has invested Rp22.9 trillion through PT Toyota Motor Manufacturing Indonesia (TMMIN) to build a factory in Karawang, West Java. Totally,  since the last 40 years, Toyota has invested Rp26 trillion in the production of cars.

With a warning to leave the UK, it’s an opportunity for Indonesia if Toyota occasionally is intends to add its investment in the country.

Written by Daniel Deha, Email: daniel@theinsiderstories.com