Toyota to build more cars in Britain in free trade boost
Toyota is to begin building sports cars for the US market in Derbyshire, delivering a boost to British manufacturing weeks after Sir Keir Starmer struck a free trade deal with Donald Trump.
The Japanese carmaker is poised to spend about $56m (£41.3m) on a production line used to make GR Corollas for American buyers, Reuters said on Tuesday.
The move would help the company bring down wait times for the car in North America. About 10,000 cars a year will be made at Toyota's existing factory in Derbyshire, where output has fallen in recent years.
Mr Trump announced plans to hit Japanese carmakers with a 25pc tariff in April. The government in Tokyo has been pushing to have this repealed amid worries it could hammer the nation's automotive industry. Roughly 9m cars are built in Japan annually, of which about 1.5m are exported to the US.
The US president initially hit British-made cars with a 25pc tariff when he kicked off his global trade war in April. However, the rate was reduced to 10pc for 100,000 cars per year after Sir Keir Starmer signed a trade deal with Mr Trump earlier this month.
Toyota declined to comment when approached by The Telegraph. Sources familiar with the situation told Reuters the company's decision was not directly linked to high tariffs imposed on Japanese carmakers by US president Donald Trump.
Regardless, the decision to establish a manufacturing hub in Britain to serve the US is likely to be seized upon as a benefit of the US-UK free trade deal.
The GR Corolla, which costs about $40,000 in the US, has proved popular with sports car enthusiasts, outselling every other manual Toyota model in the US in 2023. The company is reportedly battling to keep up with demand for the model.
While it sells in lower numbers than other mass market models, Toyota is thought to make a higher margin from the cars.
It is among a handful of cars currently being built at Toyota's Motomachi factory in Japan, where about 8,000 were made last year. It can take several months for a car made there to reach its destination in the US.
It comes after separate reports in April that Toyota could begin producing the next version of its RAV4 SUVs in the US to mitigate the impact of Mr Trump's tariffs.
The current model of the SUV is currently made in Kentucky, Canada and Japan, but Toyota had been planning to export the new version to the US from Canada and Japan.
As well as 25pc tariffs on cars, Mr Trump has imposed a 24pc 'reciprocal' tariff on other Japanese goods, although both rates have been paused until July while negotiations take place.
Ryosei Akazawa, Japan's economic revitalisation minister, was in Washington last week for a third round of negotiations about a potential trade deal.
He has called the tariffs 'regrettable' and said Japan will 'strongly demand' that they are reviewed.
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