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Toyota plans to boost UK manufacturing more cars starting next year as the group seeks to increase flexibility in responding to the disruption caused by US tariffs.
The world’s largest automaker said on Friday that it will move production of its Grocorolla high-performance hatchback in Derbyshire from Japan to its Burnaston plant, making it the first plant to produce GR vehicles.
Toyota did not provide details on the scale of the investment or the number of vehicles produced.
This investment will help maintain Toyota’s manufacturing footprint in the UK, coming before the government announces its industrial strategy.
UK Business Secretary Jonathan Reynolds said Toyota’s announcement was “a vote of confidence in our economy and is based on this government’s plan to make the UK an investment option.”
Burnaston Plant currently produces around 98,000 vehicles per year and employs around 2,300 people. Those close to the discussion said it is unlikely that investment will lead to new jobs being created.
In an interview in March, Toyota’s chief corporate officer Matt Harrison in Europe showed that the Burnston plant could retain more “export potential” if the UK negotiates better terms and conditions with the US.
Toyota said Friday that its decision reflects “an effort to optimize the global production footprint and produce and deliver vehicles to customers as quickly as possible.”
President Donald Trump’s 25% tariffs on imports of foreign-made cars forced car manufacturers to redraw their supply chains by increasing production in the US and other countries.
Although preparations for the move to Burnaston are ahead of tariffs, vehicles produced by Toyota in the UK will benefit from a 10% reduction in tariffs negotiated with US counterparts by the Keir Starmer government.
The trade agreement will reduce the 27.5% tariffs on the first 100,000 cars shipped from the UK to 27.5%. The new quota accounts for almost all of the 101,870 vehicles exported to the US last year.
However, automotive executives say it remains unclear how quota systems are managed and allocated between different brands. Therefore, it is not certain that all GR Corolla vehicles that may be exported to the US will be involved in 10% tariffs.
One important reason for boosting production in the UK is to ease the burden on Toyota’s Motomachi plant in Japan, where it struggles to meet the high demand for vehicles such as the popular hybrid model led by the Prius.
Brexit has made a major contribution to darkening the UK’s appeal as a hub for Japanese auto companies to export vehicles to the EU. Burnaston’s production fell from a peak of 190,000 units in 2015 to below 100,000 last year.
The future of Burnston, Toyota’s main negotiation card with the UK government, was boosted by the UK’s decision to allow British-style hybrids to be sold until 2035 as part of a gradual revision of British fueled vehicles.
Toyota has invested more than £2.755 billion and employs 300 billion in the UK, including a vehicle engine plant in Deeside, North Wales.
