Toyota is to invest £240m into upgrading its car plant in Derbyshire in a major boost for the automotive industry after Britain’s vote to leave the EU.
The Japanese carmaker will modernise the plant in Burnaston with new equipment, technology and systems with the help of £21.3m from the government.
Greg Clark, the business secretary, said Toyota’s investment demonstrated its faith in employees at the site.
However, the European boss of Toyota warned tariff-free access to Europe was vital to the future success of the plant.
Johan van Zyl, president and chief executive of Toyota Motor Europe, said: “Continued tariff- and barrier-free market access between the UK and Europe that is predictable and uncomplicated will be vital for future success.”
Bosses in the automotive industry have consistently warned the government that leaving the EU and the single market could have a damaging impact on UK plants because of the number of cars that are exported and the high proportion of car parts that are imported. On average just 41% of the parts in a car assembled in the UK are made in this country, meaning leaving the single market could add time and cost to production.
However, since the referendum last June Nissan has committed to expanding its factory in Sunderland while Jaguar Land Rover has also pressed ahead with investments in its factories.
However, there are concerns that General Motors’ Vauxhall plants at Ellesmere Port, Merseyside, and Luton, Bedfordshire, could be downsized or even closed after the business was bought by Peugeot. BMW has also warned it could make the new electric Mini in Germany rather than its factory in Oxford.
Van Zyl said: “This upgrade of Toyota Motor UK is a sign of confidence in our employees and suppliers and their focus on superior quality and greater efficiency. We welcome the UK government funding contribution for this activity.
“Our investment demonstrates that, as a company, we are doing all we can to raise the competitiveness of our Burnaston plant in Derbyshire.”
The government backing is subject to an independent assessment and due diligence. It is designed to support training and research and development.
Clark said: “Our automotive sector is one of the most productive in the world and Toyota’s decision to invest £240m upgrading its Burnaston plant is a further boost to the UK auto sector.
“Toyota is one of the world’s largest car producers and this inward 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.
“As we prepare to leave the EU, this government is committed through our industrial strategy to ensuring the UK remains one of the best places in the world to do business and we are able to help businesses seize on economic opportunities.”
