Toyota anticipates halting production at its UK factory if Britain leaves the European Union without a trade deal, the plant's managing director, Marvin Cooke, told the BBC.
Toyota's factory in Burnaston, central England, produced 150,000 vehicles last year, with about 90 percent of the units shipped to the EU, while components come the other way, the BBC reported..
In February, Toyota said it will build the next generation of its compact car in Burnaston to replace the current model there. The new generation will change its name from Auris to Corolla when it goes on sale early next year.
“My view is that if Britain crashes out of the EU at the end of March, we will see production stops in our factory," Cooke said in an interview with the BBC posted on its website. “It could be hours, days, weeks -- even months."
On Tuesday, Toyota Europe President, Johan van Zyl, said in an interview with Bloomberg that a hard Brexit risks disrupting the weekly revenue of about 60 million pounds ($78 million) that Toyota generates from its plant in England. He also echoed Cooke's remarks that no trade agreement would lead to stoppages at the plant.
“We make 600 cars a day in the UK, five days a week,” van Zyl said. “At around 20,000 pounds revenue per car, you can work it out. If you disrupt that, it’s very concerning."
“We are hopeful there will be a deal” on Brexit, van Zyl said. “We have a bit of breathing room before the next major investment decision that will come within the next three years, but not a lot.”
On Monday, van Zyl said that due to the nature of Toyota’s just-in-time production system, the Burnaston plant only has four hours of parts on hand and must constantly restock those in sequence, with an average of 50 trucks carrying components into the UK from the EU each day. Holding more parts to offset logistics delays would increase costs, he said.
UK businesses are getting increasingly skittish about the prospects a no-deal Brexit, with less than 200 days until the country is set to leave. BMW and Jaguar Land Rover have warned about production disruptions if the the UK leaves without an agreement. The British Chambers of Commerce warned Friday that most businesses have yet to carry out a risk assessment on the impact of Brexit.
Toyota’s warning comes as the ruling Conservative party holds its annual conference. The party fault-line on how how best to deliver Brexit was further highlighted when former foreign secretary Boris Johnson set out his own Brexit plan while rubbishing Prime Minister Theresa May’s own vision.
Prime Minister Theresa May’s proposal was rejected by European leaders last month, forcing her to come up with a new Brexit plan that both the EU and the warring factions in her party can accept.