Honda, Toyota, Nissan Will Leave UK If Doing Business There Becomes Unprofitable

BY Michael Karkafiris | Posted on

Japan’s UK ambassador fired a warning shot to Prime Minister Theresa May, saying that Japanese automakers would have to leave Great Britain if the imposed trade barriers after Brexit make their business there unprofitable.

The ambassador’s comments were regarded as an unusually blunt warning on the risks of trade barriers, Reuters reports.

“If there is no profitability of continuing operations in the UK – not Japanese only – then no private company can continue operations,” Koji Tsuruoka said when asked how real the threat was to Japanese companies of Britain not securing frictionless EU trade.

“So it is as simple as that,” he said. “This is all high stakes that all of us, I think, need to keep in mind.”

All three bosses from Nissan Europe, Honda Europe and Toyota Europe were among the executives from 19 Japanese businesses who met with UK Prime Minister Theresa May to voice their concerns over the country’s departure from the EU.

Japan, which is the world’s third largest economy, has voiced its strong concerns about the impact of Brexit on the UK, which is also the second-most important destination for Japanese investment after the United States.

“The point about frictionless trade and tariff-free trade was made in the meeting [with the Japanese businesses] and acknowledged by the government and all sides as being important but nothing firm,” said an anonymous source familiar with the discussions.

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  • Craig

    Gosh! What a brilliant business decision. lol Of course you should leave if business becomes unprofitable.

  • YUDHA BAGASKARA

    RIP UK Car industry

  • Jorge Salazar

    just put the same hurdles for japan co. as japan imposes on everyone else…fair is fair. what educated diplomats cant understand when a country wants to protect itself from a major deficit like japan does with many countries. why do certain countries feel they cant just export but protect their own country from imports. japan and trading partners probably do a 75/25 but in the first case WHO says YES to this.

    • Skip

      the product also has to fit the market. Not a whole lot of people in Japan want or could afford and F150.

  • RDS Alphard

    Who purchase Japanese cars anyway?

    • Jorge Salazar

      if they have a deficit and manufacturing there, somebody… whats the sales chart say?

    • no25

      most of the world since Japanese cars outsell most countries.

  • BernardP

    It’s gross anti-Brexit propaganda and fear-mongering. Has the UK indicated it will impose trade barriers? On the contrary, the UK wants to leave the EU while maintaining open commercial exchanges.

    This being said, my money is on Brexit never happening. Politicians and established interests will subvert the process, negotiations with the EU will end up in a new referendum and this time, the UK will chose to remain in the EU.

    • LWOAP

      I imagine that will make a lot of people angry as a result.

  • SteersUright

    Stupid comment and just makes Honda seem afraid and weak. I feel this is more of a public statement from this exec, a thinly veiled message to the UK to play ball and keep tariffs low. However, the UK needs to do whatever is good for their citizens.
    And if they don’t keep tariffs low, just raise the prices of your cars, Honda! Duh! Tariffs would make all cars more expensive in the UK except maybe for Bentley’s, Rolls, Jags, and Mini Coopers. Don’t see those brands being able to supply the entire UK with the vehicles it needs.

  • SteersUright

    hmm, fair point. Did not know this about the UK market. Shame though, the Japanese do make the most reliable economy cars out there and Honda, especially makes some of the best.

  • liams92

    As in indispensably country, the Uk will set the tariffs on imported cars up to a maximum of 10% as stated by WTO. The government will set tariffs at 0% if it is reciprocated in the country in question. The EU has a lot more to loose if the UK starts adding 10% onto German and French cars. The UK manufacturers on the other hand sell vast amounts more to the USA, Middle East and China than Europe due to fact that the likes of; Jaguar, Land Rover, MINI, Rolls Royce, Aston Martin and Bentley are premium brands. Those countries previously mentioned either don’t have free trade with the EU or a deal that isn’t good for automotive sales. Worth noting that supply chain of parts between EU and UK will not incur tariffs as they are only required on finished products. See Teslas factory in the Netherlands as an example of this, they literally bolt on the battery pack to get around the tariffs.

  • BernardP

    What you say is true. However, there is nothing preventing the UK from entering into a free trade agreement with the EU, as part of the Brexit deal. Same goes for trade with other countries. A tall order, of course. that’s why I think that ultimately, Brexit won’t happen.

  • brn

    If we can’t make money exporting products to your country, you’ll need to give your money to local industry.

    Not much of a threat.

  • Cobrajet

    The Norway solution is the best solution.