The president of Toyota has said a no-deal Brexit should be avoided “at all costs”, in the latest intervention by a major Japanese investor in the UK economy.
In comments posted on the website of the Japan Automobile Manufacturers Association, Akio Toyoda noted that British and European Union leaders had failed to reach an agreement this week on the terms of Britain’s withdrawal from the EU.
“Apprehension is therefore growing that a withdrawal without agreement may become a reality,” said Toyoda, who is also chair of the manufacturers association.
For Japanese carmakers to continue contributing to the economies and job markets of Britain and the EU, 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”.
Japanese carmakers operate 14 production plants and 17 research and development and design centres in the EU. Last year, they produced 1.5m vehicles and employed 170,000 people.
Toyoda said a no-deal Brexit would adversely affect Japanese car firms and their customers throughout the EU due to “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”.
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 to warn that a no-deal Brexit could hit production and force a rethink of investments.
Companies such as Toyota, Nissan and Hitachi have invested more than £40bn in the UK since the 1980s. More than 1,000 Japanese firms together employ about 140,000 people in Britain in manufacturing, pharmaceuticals and financial services.
This month, Nissan warned of serious disruption to its manufacturing operation in north-east England if Britain failed to avoid a hard Brexit. The carmaker employs almost 8,000 people, mostly at its plant near Sunderland. A further 30,000 are employed in UK companies supplying Nissan.
Earlier, Toyota said a no-deal Brexit could temporarily halt output at its plant in Burnaston, Derbyshire, which employs 2,500 people and produced almost 150,000 cars last year, 90% of them for export to the EU.
Japanese banks have already announced plans to scale down their presence in London, while the Japanese homeware company Muji is considering moving its European headquarters out of Britain, possibly to Germany, according to Bloomberg.
The consumer electronics firm Panasonic reportedly plans to relocate its European headquarters from Bracknell, Berkshire, to the Netherlands.
In an interview with the Financial Times this month, Abe said Britain would lose its role as a gateway to Europe after Brexit but would still be “equipped with global strength” – remarks that are likely to have emboldened staunch leavers who argue that a clean break would allow Britain to strike free trade deals with countries outside the EU.
However, Abe encouraged London and Brussels to avoid a “disorderly” deal that would affect Japanese businesses with investments in Britain.