Toyota Motor Corp. (NYSE: TM) plans to invest £ 240m in progressing its UK factory which comprises of the Auris and Avensis models. Toyota's investment in the Burnaston plant near Derby will allow the manufacture of vehicles by operating its new global manufacturing system. The factory employs about 2,500 people, while another 590 work at Toyota's engine plant at Deeside, North Wales.
Burnaston produced approximately 180,000 vehicles last year, most of which are distributed to Europe and other markets. Johan van Zyl, chief executive of Toyota Motor Europe, mentioned the investment that the company was making extreme efforts for Burnaston to gain a competitive edge. However, he warned: "Continued tariff-and-barrier free market access between the UK and Europe that is predictable and uncomplicated will be vital for future success."
Industry trade body the SMMT mentioned in January that ambiguity around Brexit and the UK's future trading engagements had sparked investment in the sector car. Investment obligations in the UK automotive sector last year totaled £ 1.66bn, a decrease from £ 2.5bn in 2015. Business Secretary Greg Clark stated Toyota's investment "underlines the company's faith in its employees and will help ensure the plant is well positioned for future Toyota Models to be made in the UK ".
The government is delivering £ 21.3m in funding for training, research and development, and improving the Burnaston plant's environmental performance. In 2016, competitor carmaker Nissan stated it would build both the new Qashqai and the X-Trail SUV at its Sunderland plant after government "support and assurances". The decision to enhance the plant to take Toyota's New Global Architecture, its new system for manufacturing vehicles worldwide, implies the company sees the UK as part of its long-term future.
But the UK's automotive industry acknowledges that Brexit is arriving and with it the probability of tariffs and complex customs engagements. That threatens the competitiveness of carmakers that rely on the kind of just-in-time manufacturing that Toyota pioneered.
The common secretary of the Unite union, Len McCluskey, stated Toyota workers "need to know that the government has their back and will do whatever is necessary to ensure new models and new investments keeps coming to Britain". "With discussions set to start on the replacement of models such as Vauxhall's Astra and decisions due to BMW's electric Mini, it is vital that ministers calm by stating they will secure tariff-free access to the European single market and customs union in Brexit negotiations . "
In January, Toyota declared it was planning to spend $ 10bn (£ 8.2bn) in the US in the course of the next five years.
The firm is no longer the world's largest carmaker to Volkswagen last year.
Last month, Toyota mentioned it anticipated to report net profits of 1.7 trillion yen ($ 15.1bn; £ 12.1bn) for the 2016-17 financial year. However, that was lower than the 2.1 trillion yen profit it recorded a year earlier.