Toyota and Honda UK Factories Could Face Closure

Toyota and Honda UK Factories Could Face Closure

A number of car factories in the UK are facing an uncertain future after Britian’s vote to leave the European Union, with Toyota and Honda factories most at risk, according to research by PA Consulting Group.

The PA study addressed the concerns of the UK auto sector that fears the prolonged uncertainty that may affect trade agreements between the UK and Europe after the Brexit vote.

The consulting company said that prolonged uncertainty during talks between the EU and the UK over Brexit could result in some carmakers taking their investments away from UK factories and upgrade their models in sites across the world.

PA also found that if the UK’s access to the single market is said to be inadequate, then come factories in the UK could face closure as they would be deemed uncompetitive, with the research suggesting that Honda and Toyota plants are most at threat of closure.

Each year, the UK exports more than 1.2 million cars, over half of which go into the EU and research suggests that if we see a continuation of the high levels of uncertainty in the wake of the Brexit vote, demand and sales may see a slump of 5-10%.

PA believes that Toyota and Honda are at the highest risk of closure because they are among those most reliant on exports to Europe and have relatively low profitability and margins, although between them they account for around one fifth of vehicles produced in the UK.

Head of Manufacturing at PA Consulting Group, Tim Lawrence, commented: The current lack of certainty about tariffs places a question mark over the future of a significant number of UK plants and jobs. As the supply chain investment tends to move with Original Equipment Manufacturers’ volumes, the impact on UK jobs and the economy will be felt beyond the automotive industry.

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