Toyota, Nissan to seek compensation from UK in no-deal Brexit

Japanese brands demand British government covers additional tariff costs if UK and EU cannot agree on a free-trade agreement

Japanese manufacturers Toyota and Nissan have demanded that the British government reimburses them for tariff costs if the UK cannot agree on a Brexit deal with the European Union. 

As first reported by business publication Nikkei Asia, the two makers are preparing themselves for a 10 percent tariff on cars exported from the UK to the EU which could come into place from Jan 1st 2021. If such market conditions do arise, they want the government to bear the brunt of the tariff costs. 

Both companies make cars in Britain, with Toyota producing the 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 there. It currently build the Qashqai, Juke and Leaf for supply in the UK and Europe, primarily, and is Britain’s biggest car factory. Employees remain at work within Honda’s Swindon factory, despite the fact that the facility will be closed next year.    

Last month bodies that represent the car industry both in the UK and Europe calling or both sides to urgently agree a free trade agreement. It warns that if this isn’t done it could cost the sector €110bn (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 see 10% added to the cost of a car and up to 22% for larger trucks and vans. 

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