Dr Johan van Zyl, president and CEO of Toyota Motor Europe, has sounded a Brexit trade deal warning
The boss of Toyota in Europe says a No Deal Brexit would be a ‘disaster’ that could put the brakes on the chances of the Japanese giant building future planned electric cars in the UK.
Ultimately it could threaten the viability of their UK factories altogether, he suggested.
The warning comes as the Japanese carmaker unveiled plans to build its first fully electric car – a crossover sports utility vehicle – with five more zero-emissions vehicles in the pipeline by 2025, the bulk of them battery-powered.
No Deal would bring in tariffs and increase the cost of the firm exporting its UK built vehicles – of which nine out of ten go to the European Union, he said.
And any failure by the UK government to properly invest in infrastructure – including sufficient charging points and leading battery technology – would also risk stopping ministerial ambitions for electric cars in their tracks, he warned.
Toyota employs around 3,000 people in the UK with a car assembly plant at Burnaston, in Derbyshire and an engine plant on Deeside. It currently builds the Corolla and Corolla Touring Sports estate hybrid models, with production this year expected at around 130,000.
That will continue until 2027, before which a decision on the next model – also expected to be a hybrid – must be taken.
But beyond that, and with a 2035 UK ban on even hybrid cars looming, the decision on a Brexit deal would play a large part in determining whether one of the six new planned electric Toyota cars would come to the UK to be built ‘locally’ and close to its market.
A lack of local battery supply for the electric cars would also be a factor, he warned.
Speaking to the This is Money and MailOnline Dr Johan van Zyl, president and CEO of Toyota Motor Europe said of Brexit negotiations: ‘If there’s a No Deal it will be a disaster.’
He said: ’The disaster would be no free trade. It would be very difficult to compete from the UK into Europe.
‘We don’t want any duties. Some 90 per cent of what we produce in the UK we export to Europe.’
Hefty tariffs under trade terms without a deal would make the exported cars uncompetitive, he said.
‘On Brexit we’ve a very clear view. We want frictionless trade.’
Toyota is planning a new platform to form the basis for a generation of electric cars
He remained optimistic that a deal will still be done, but warned: ‘It’s not just the deal. It’s also the detail. It’s a deal that facilitates trade. It’s infrastructure. Charging points. The supply of raw materials and batteries.’
Given the time scales, it is unlikely the next car into Burnaston could in any case be a fully-electric model. But the one after that could be – if the plant were still economically viable.
Car firms like Toyota make their investment decisions years ahead of production – and rival factories have to complete for the business on economic grounds.
Asked what his message would be to Prime Minister Boris Johnson, Dr van Zyl said: ‘I’d like him to finish the Brexit negotiations. We don’t have a lot of time left.’
Dr Van Zyl said Toyota had a great UK workforce and that Japan had already invested £2.75billion in its operations here. He added: ‘We are still for continuing in the UK.’
Until now Toyota has prioritised investing heavily in producing petrol-electric hybrid cars, But these face being banned in the UK from 2035 and some with a short electric-only range will be blocked from as early as 2030, when the Government’s ban on petrol and diesel cars comes into effect.
Toyota is heavily invested in hybrid vehicles – widely seen as a ‘gateway’ for consumers on the road to fully electric vehicles.
Dr van Zyl said: ’The transition needs to be supported. We’re pleased it will be up to 2035. But it’s still not enough to be ready for battery electric vehicles.’
Toyota’s own hybrids run 50 per cent of the time in electric-only mode, he said.
He said he had not been in direct talks with the Government about giving more flexibility to hybrids.
Toyota has revealed outline sketches of what a new electric SUV could look like
Toyota has announced it is to build its first pure electric sports utility vehicle ‘in the coming months’.
Based on the firm’s new flexible platform chassis, Toyota said: ’The first model has already been developed and is being readied for production.’
It will be built initially at Toyota’s ZEV (Zero Emissions Vehicle) factory in Japan.
A new electric Lexus is also in development.
Toyota has also just unveiled its hydrogen powered Mirai electric fuel-cell car on sale next year.
In a speech to Toyota’s ‘Kenshiki Forum held online, Toyota CEO Dr van Zyl said that already rapid change towards greater ‘electrification’ had been accelerated by the Covid pandemic: ’And for Toyota, that electrification story is strongly rooted in hybrid.’
The firm, on track to sell 1.1 million vehicles across Europe next year, will launch 60 new or updated electrified vehicles by 2025, of which ‘at least 10 ‘ will be battery electric or fuel-cell zero emissions vehicles.
In the next few months Toyota will launch a new seven-seater Highlander hybrid SUV, with a Yaris Cross to follow soon after.
It is creating in Japan a hydrogen fuel-cell conurbation called Woven City using the gas to power homes as well as cars.
By 2025 he said 70 per cent of Toyota cars would be hybrid, 10 per cent plug-in hybrid, and more than 10 per cent zero emissions (battery and fuel-cell).
Rival Japanese car giant Nissan last month denied rumours that it and its French partners Renault were about to announce within days that they were shutting down their Sunderland plant over Brexit and pulling out of the UK.
With the deadline looming, reports were swiftly and flatly denied by Nissan. It has invested £400million in production at Sunderland of the new third generation Qashqai from next year.
Nissan bosses have however warned that a No Deal Brexit and tariffs could threaten the longer term sustainability of the Sunderland factory.
At a Financial Times Future of the Car summit last week, Nissan’s chief operating officer Ashwani Gupta side-stepped the issue when asked about the firm’s view, saying only: ’Let’s wait and watch. Let’s move onto the next question.’
Bentley chief executive Adrian Hallmark spoke of its preparations for either a deal or No Deal scenario. He said: ’We are ready in that we are ready to jump off a cliff with a parachute we think works but haven’t yet tested.’
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