- Toyota will produce the GR Corolla at its UK Burnaston plant - first GR model made outside Japan.
- The move supports tariff savings under a new UK-US trade deal and eases Japan plant load.
- About ¥8 billion (£41M) will be invested to make 10,000 units, some for U.S. export.
Toyota plans to increase vehicle production in the UK starting next year and wants to enhance manufacturing flexibility in response to increasing trade and tariff challenges from the United States, the Financial Times has reported.
Toyota stated that it would relocate some of the high-performance GR Corolla hatchback production from Japan to its Burnaston factory in Derbyshire, signifying it as the first manufacturing location outside of Japan to build a GR model.
As reported by Financial Times, and two individuals knowledgeable about the situation indicated that, Toyota plans to invest about ¥8 billion (£41 million) to improve production at its Derbyshire manufacturing location in the UK, and is expected to build around 10,000 GR Corolla cars, some of which will be exported to the US, which is the primary destination for this model.
UK business secretary Jonathan Reynolds stated, “another vote of confidence in our economy and builds on this government’s plans to make Britain the destination of choice for investment.”
The funding arrives before the government's forthcoming industrial strategy announcement and is anticipated to support Toyota’s manufacturing operations in the UK. The Burnaston plant presently produces roughly 98,000 vehicles each year and has a workforce of about 2,300 employees. During a March interview, Matt Harrison, Toyota's chief corporate officer for Europe, indicated that the Burnaston plant may have greater "export potential" if the UK secures improved trading agreements with the US.
Toyota announced that this decision demonstrates its “efforts to optimise its global production footprint to produce and deliver vehicles to customers as swiftly as possible.”
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US President Donald Trump has implemented 25 percent tariffs on imported foreign vehicles, prompting car manufacturers to restructure their supply chains by increasing production in the US and other countries with reduced duty rates.
Moving production to Burnaston would enable Toyota to benefit from the 10 percent tariff cut obtained by Sir Keir Starmer’s administration during trade negotiations with the US.
The trade agreement will reduce US tariffs from 27.5 percent to 10 percent for the initial 100,000 cars exported from the UK. The updated quota considers nearly all the 101,870 vehicles shipped to the US in the previous year.
However, it remains unclear how the quota system will be used and allocated between each brand, so it is still unknown if all GR Corolla vehicles could be shipped to the US with a 10 percent tariff.
One major reason for increasing output in the UK is to reduce the burden on Toyota's Motomachi factory in Japan, which is under pressure to fulfil the demand for desirable hybrid models, particularly Prius.
Since Brexit, the UK has been less attractive to Japanese car manufacturers exporting to the EU and Burnaston's production has reduced from 190,000 in 2015 to below 100,000 last year.