Business / Corporate

Toyota joins rival carmakers BMW and Honda in sounding Brexit alarm bell

Bloomberg

Toyota Motor Corp. has added its voice to warnings about potential Brexit fallout as the deadline for an agreement on the U.K.’s exit from the European Union looms less than four weeks away.

Possible disruption to trade between the U.K. and the EU is Toyota’s “biggest concern,” the company’s Europe chief, Johan van Zyl, said in an interview at the Geneva Motor Show on Tuesday.

BMW AG, which moved forward a planned four-week production stop to coincide with the U.K. leaving the EU, would consider moving some Mini brand production from its plant near Oxford, England, it said in a statement, reiterating previous comments about contingency planning. The company is also stockpiling parts, CEO Harald Krueger told reporters on the sidelines of the event.

“We’re working with several scenarios,” Krueger said. “If Brexit is delayed, we’re going to plan flexibly, delay some plans, but we’ve also stocked up our parts in case of a disruption in our supply chain.” The German company has between two days and a week’s worth of supply, depending on the part, he said.

A no-deal Brexit is a danger and would force Mini to weigh moving production out of the U.K., board member Peter Schwarzenbauer told Sky News earlier. “We at least have to consider it,” he said. “We cannot absorb 10 percent costs on top of it.”

The latest warnings from the global car industry come after Honda Motor Co. said it would shutter its U.K. plant and Ford Motor Co. warned of catastrophic consequences in a no-deal split from the EU, although that extreme scenario appears to be off the table for now.

U.K. Prime Minister Theresa May has promised Parliament that it will be able to vote to extend the exit deadline until the end of June should a deal not be reached, and EU officials signaled they would be open to an extension. Meanwhile, two of May’s ministers traveled to Brussels on Tuesday to seek concessions to help win Parliament’s backing for her divorce deal.

In the run-up to Brexit, carmakers with U.K. operations have been trying to limit the pain. Nissan Motor Co. reversed an earlier plan to build the X-Trail sport utility vehicle in northern England, while BMW, which makes the iconic Mini and Rolls-Royce cars in the U.K., said it could move manufacturing elsewhere if tariffs and border checks disrupt business.

“We can’t prepare any more than we have” for Brexit, BMW’s purchasing chief, Andreas Wendt, said in an interview in Geneva on Tuesday, adding that the German company is committed to the U.K. market long term.

BMW buys about €700 million ($793 million) worth of parts in the U.K, compared with components worth €2 billion that it imports into the country, Wendt said.