Japanese auto giants to ‘demand payback’ in event of no-deal Brexit
Two of Japan’s auto giants will ask the UK to pay them back for any additional custom charges levelled against their cars if it fails to agree a free trade deal with the EU.
The Nikkei reported that Toyota and Nissan will want payments to cover the extra 10 per cent of tax that will be levied against automobile imports from the UK should no agreement be reached.
The carmakers declined to comment on the reports, but Nissan urged the two to work together to mitigate the potential impact on business.
In a statement, it said: “We urge UK and EU negotiators to work collaboratively towards an orderly, balanced Brexit that will continue to encourage mutually beneficial trade”.
Roughly 1.3m vehicles were made in the UK last year, almost half of which were manufactured by Japanese companies.
Exports to the EU accounted for 44 per cent of British car sales, with trade body the Society of Motor Manufacturers and Traders (SMMT) estimating that higher tariffs would cost car makers an additional £4.5bn a year.
Currently, Nissan operates a plant in Sunderland which employs 7,000 workers. However, in June it said that in the event of no trade deal being agreed the factory would be “unsustainable”.
Last year fellow Japanese firm Honda pulled out of the UK, with up to 7,000 people at risk as a result of the move.
Toyota, which runs a factory in Derbyshire, has also hinted that it may also be forced to pull out of the country in the event of a no deal Brexit.
The threats came after new car sales sunk to their lowest ever levels in September, a key month for the auto industry.
Just 328,041 cars were registered last month, down 4.4 per cent lower year-on-year, new figures from the SMMT showed.
That’s the weakest performance since the introduction of the dual number plate system in 1999 and ranks 15.8 per cent lower than the 10-year average of around 390,000 units for the month.