Reuters FRANKFURT (Reuters) — Deepening uncertainties over the direction and timetable of Brexit negotiations may force Toyota to shift some British production elsewhere if they are not addressed, the Japanese carmaker warned on Tuesday.
Early government assurances that free trade with the European Union would survive Britain’s departure have been replaced by talk of transition periods, Toyota Executive Vice President Didier Leroy said.
“A few months ago the U.K. government was saying, ‘We’re sure we’ll be able to negotiate [a deal] without any trade tax,’” Leroy said in an interview at the Frankfurt car show. “They are not saying that any more.”
He added: “It’s clear that if we have to wait two to three more years to have a clarity on this topic, we will have a big question-mark about our future investment in the country.”
Brexit talks have become bogged down in recent weeks, with the EU’s chief negotiator saying not enough progress had been made to begin discussing a free trade deal, amid differences over the size of the “divorce settlement” London should pay.
Britain’s car industry is increasingly anxious that its exports could face tariffs and other barriers after 2019.
Toyota announced plans in March to begin upgrading its Burnaston plant in central England in preparation for future models at a cost of £240 million ($318 million), after receiving written assurances from London.
But Leroy, Toyota’s top foreign executive, said the company could not wait indefinitely before deciding whether to build a new model after production of the aging Avensis model ends.
“We cannot take this kind of decision before we have clarity on the future trade relationship,” said Leroy.
“We will not close the plant tomorrow morning, but if in two to three years we have to decide some future investments, of course the key point will be the competitiveness of this plant in future.”