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Toyota plans £240 million investment in Burnaston plant

Mar 26, 2017 10:50 PM EDT

Japanese automaker Toyota plans to invest £240 million in upgrading its car plant that makes the Auris and Aventis models. The company, however, will remain a tariff-free access to EU markets due to Brexit's crucial status.

Toyota will be investing in Burnaston plant near Derby that will allow the production of vehicles using its new global manufacturing system. The factory houses 2,500 people and another 590 people work at Toyota's engine plant in Deeside, North Wales. About 180,000 vehicles were made in Burnaston last year and most of which were exported to Europe and other markets.

Johan van Zyl, chief executive of Toyota Motor Europe, believes that the company is doing all that it could do to make Burnaston more competitive. It must be noted that only 41 percent of the parts in British-built cars are made within the country on average and this is less than the typical 50 to 55 percent local content requirement which Britain would agree to in some bilateral trade deals. He, however, warns that continued tariff-and-barrier free market access between UK and Europe will be significant for future success despite its predictability and simplicity.

Due to Brexit and UK's future trading arrangements, investment in the car sector has become difficult according to industry trade body the SMMT. Notably, investment in the UK automotive industry amounted to £1.66 billion, which is down from £2.5 billion in 2015. Business Secretary Greg Clark has said that Toyota's investment "underlines the company's faith in its employees and will help ensure the plant is well positioned for future Toyota models to be made in the UK".

Meanwhile, the government promises Toyota that it will provide £21.3 million in funding for training, research, and development, and improve the Burnaston plant's environmental performance. An industry correspondent notes that Toyota's decision to upgrade the plant suggest that the carmaker sees the UK as part of its long-term future. But it cannot be also denied that with Brexit coming, UK's automotive industry need to prepare well. That becomes a threat to the competitiveness of automakers that rely on just-in-time manufacturing, which Toyota pioneered.

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