Japanese manufacturers Nissan and Toyota have demanded that the UK government reimburses them for tariff costs if the UK can't agree on a Brexit deal with the European Union (EU).
As first reported by business publication Nikkei Asia, the companies are preparing themselves for a 10% tariff on cars exported from the UK to the EU that could come into place from 1 January 2021. If such market conditions do arise, they want the UK government to bear the brunt of the tariff costs.
Both make cars in Britain, with Toyota producing the Toyota Corolla and the heavily related joint-venture project, the Suzuki Swace, at its Motor Manufacturing plant in Burnaston, Derbyshire. It has an annual production capacity of 180,000 cars.
Nissan’s Sunderland plant is larger, with the capacity to produce 500,000 cars a year. It currently build the Nissan Juke, Nissan Leaf and Nissan Qashqai for supply in the UK and Europe primarily and is Britain’s biggest car factory.
Employees remain at work within the Swindon factory of another Japanese firm, Honda, but that the facility will be closed next year.
Last month, bodies that represent the car industry both in the UK and Europe called on both sides to urgently agree a free trade agreement. It warned that if this isn’t done, it could cost the sector €110 billion (just under £200bn) In lost trade over a five-year period.
The World Trade Organisation tariffs, which would be imposed in the event of a no-deal Brexit, would add 10% to the cost of a car and up to 22% for larger trucks and vans.
READ MORE:
Car makers risk losing out in zero-tariff Brexit trade deal
Worst 'new plate' September on record for new car sales
The car industry's 2021 Brexit timebomb
Join the debate
Add your comment
Toyota and Nissan are "sabre
Toyota and Nissan are "sabre rattling" for a reason. They want to give the government a chance to fix this for them or they will no doubt say we are off. That will be a huge blow in leave voting Sunderland. The problem however is how to compensate ALL UK car makers (inc JLR) when workers at Cineworld are getting laid off. Taxpayers will cry foul.
For that reason they will need to consider large tariffs on EU made cars in retaliation. That could be a huge boost to JLR, Nissan and Toyota, though it may anger Petrol heads. JLR indeed could benfit from people giving them a chance based on price.
Jagdavey
Exactly right!
Good Idea.
Give all the WTO tariffs collected from EU made Audi's, BMW's, Mercs, Fords & Vauxhall's sold in the UK to British manufacturers to keep them building cars in the UK for export to mainland Europe!! Great Idea. solves the problem of a no deal Brexit
jagdavey wrote:
Makes perfect sense.
jason_recliner wrote:
Makes zero sense as it ignores the complex supply chains of modern manufacturing. Making UK factory goods uncompetitive from a price point of view can't be fixed through subsidies.
Unfortunately UK government is hell bent on a dogmatic approach.