Tuesday 02 October 2018 10:27 am | Updated: Tuesday 21 May 2019 4:25 pm

Car manufacturers warn no-deal Brexit would hit UK production

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A number of leading car manufacturers have warned a no-deal Brexit could seriously impact the production of their vehicles in the UK.

Toyota has said a no-deal Brexit is likely to impact its investment decisions.

It follows the manager of its facility in Burnaston, Derby warning a no-deal Brexit would lead to the factory halting production, potentially for a number of months.

Speaking to the BBC, Toyota boss Johan van Zyl repeated the firm's warning, saying if the firm is unable to sell into the EU market duty free, it will hit UK operations.

"If we have anything that has an impact on your competitiveness of manufacturing in the UK, it will definitely have an impact on future investment decision," van Zyl said.

"The reason for many manufacturers being in the UK is the fact that they could export to the European market duty free – and that is a critical one."

Toyota has recently announced it would invest £240m in the Burnaston plant to start production of its Corolla model alongside the Auris and Avensis, which are already made there.

But van Zyl said a "very bad deal" would affect its decisions to invest in the plant.

"The UK market in itself is not big enough to justify a plant that size," he said. "If we cannot sell into the European market, it will have an impact on the future of our plant."

BMW to move more production to Netherlands in 'no-deal' scenario

Separately, the boss of BMW has also said the company would shift more of the production of its Mini model to the Netherlands if the UK crashes out the EU without a deal.

Harald Krueger, BMW chief exec, told journalists at the Paris Motor Show:

I told Theresa May and the European Union that if there is a hard Brexit, both sides are losers. We will no longer fulfil trade agreements and then we are forced to build the car in the Netherlands.

Hard Brexit is currently not our main scenario but we are preparing for it. We see a 50:50 chance.

Vauxhall owner sends Brexit warning

PSA Group, the French firm which owns Vauxhall, also said the loss of customs barriers and freedom of movement from a no-deal Brexit would hit the company.

"We've been doing all we can to develop our UK business, restore Vauxhall and Opel profitability, reinvesting in Luton and improving our sites' competitiveness in order to help them face up to an uncertain future," vice-president of PSA Maxime Picat told Reuters.

"But there are limits. Those limits are customs barriers, and the loss of freedom of movement, for people and goods. If we get to that point, we will be obliged to take measures.

"If we suddenly have to start manufacturing for the UK in the UK, and for Europe in Europe, there will necessarily be an impact on UK production."