Daily Management Review

No Cars To Be Built At British Factory By Toyota From The Day After Brexit


Japanese auto giant Toyota has decided not to manufacture any new cars at its production unit in the United Kingdom from the very next day after the UK leaves the European Union. The company described this move as a part of its plans to take care of any disruption that could take place because of a possible messy departure of the UK from the EU. 
While businesses in general have been vocal against a no-deal Brexit, one of the most vocal in this regards was the British auto sector which is also the biggest export sector of the UK. British’s autos sector had warned that some of the possibilities of a disorderly verdict such as tariffs, border delays and new bureaucracy would impinge the process of production and that would completely diminish the viability of factories of the auto companies.
After replacing Teresa May as the British prime minister, Boris Johnson had pledged that the UK would be exiting the EU on the pre-fixed date of October 31 even without a proper trade deal with the EU.
Last year, about 8 per cent of the total production of 1.52 million cars in the UK was  accounted for by Toyota, all of which were churned out from its Burnaston factory in Derbyshire. The company had also started the manufacturing of the new Corolla model at the facility earlier this year.
"We will have a production pause on the first day of Brexit, which is Friday 1st, and... then we will restart production on the Monday and the Tuesday," said a spokesman for the company. "We don't know what the actual situation will be like. We've already pulled forward a couple of days of extra inventory which we will then use on the Monday and Tuesday and we will have to see what the situation is after that," he said.
The auto companies of the UK and their factories have deeply entrenched supply chains that can extend all around the world. The supply chains and the production systems function on the just-in-time manufacturing concept wherein most of the parts that are supplied reach the production units just minutes before they are to be used in the production process on to vehicles in the production lines.
No volume would be lost from the pause in output, Toyota said.