Nissan and Toyota Claim UK Compensation for No-Deal BrexitOctober 6, 2020
Japanese auto companies are demanding tariff compensation from the government if the UK and the EU cannot agree on a free trade agreement.
Japanese manufacturers Nissan and Toyota have demanded that the UK government reimburse them for tariff costs if the UK fails to negotiate a Brexit deal with the European Union (EU).
As first reported by the business publication Nikkei Asia, the companies are preparing to introduce a 10% tariff on vehicles exported from the UK to the EU, which could take effect from 1 January 2021. If such market conditions do arise, carmakers want the UK government to shoulder the bulk of tariff costs.
Both companies make cars in the UK: Toyota makes the Corolla, and also has a Suzuki Swace joint venture at its Motor Manufacturing plant in Burnaston, Derbyshire. Its annual production capacity is 180,000 vehicles.
Nissan’s Sunderland plant is larger, with a capacity of 500,000 vehicles per year. It currently produces Juke, Leaf and Qashqai for deliveries primarily to the UK and Europe and is the UK’s largest car plant. There is also a Honda plant in Swindon, but that plant will be closed next year.
Last month, organizations representing the auto industry in the UK and Europe called on both sides to urgently negotiate a free trade agreement. Failure to do so could cost the auto sector € 110 billion in lost trade over a five-year period, experts warned.
The World Trade Organization tariffs, which will be imposed in the event of no-deal Brexit, will add 10% to the car’s value and up to 22% for large trucks and vans.
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