LONDON (Reuters) - Toyota (7203.T) said on Wednesday it will build the next generation of its Auris car in England in a welcome boost to Prime Minister Theresa May as Britain leaves the European Union, confirming a previous Reuters report.
The Japanese carmaker will make its new Auris hatchback at Burnaston, Derbyshire, replacing the current run of the model made there, the company said in a statement.
Sources told Reuters last year that Toyota planned to build the model in Britain on the assumption that ministers will secure a transitional Brexit deal designed to maintain current trading conditions until at least the end of 2020.
The automaker said free trade was important for the future.
“With around 85 percent of our UK vehicle production exported to European markets, continued free and frictionless trade between the UK and Europe will be vital for future success,” said Toyota Europe President and CEO Johan van Zyl in Wednesday’s statement.
Business minister Greg Clark hailed the announcement and said Britain’s automotive sector was one of the most productive in the world, adding “this government will continue work to create the best possible environment.”
Carmakers are worried that without the right Brexit deal, their factories could be subject to tariffs and trade barriers, adding to costs and risking the long-term viability of sites.
Toyota’s Burnaston plant churned out 144,000 models last year, down 20 percent from 2016 according to industry data, as its current line-up of models neared the end of their product life cycle.
Nearly one in five of those cars were Avensis models, according to a source familiar with the situation. The firm did not comment on the future of the model in its statement on Wednesday.
A Toyota spokesman later declined to comment or speculate on the Avensis.
Editing by Stephen Addison