Nissan, Toyota cars built in UK could face tariffs in EU content threshold dispute

While the content dispute will not lead to tariffs on automakers with high domestic and European sourcing, it would affect Japanese companies such as Nissan, which brings in more content from elsewhere than some of its peers.

“We want our UK team of 7,000 people to have the best possible chance of future success,” Nissan, which operates Britain’s biggest car factory, said in a statement.

There is a particular risk around electric cars with key elements, such as batteries, sourced from outside the bloc.

Toyota is also worried about how rules of origin will affect its UK manufacturing.

Toyota builds the Corolla and the related Suzuki Swace compact cars in its plant in Burnaston, central England.

“Rules of origin are very, very important,” Johan van Zyl, the head of Toyota Motor Europe, told Automotive News Europe in an interview in November last year.

Van Zyl estimated local content of cars built in Burnaston at around 30 percent. Parts sourced from Japan include the hybrid battery, which the executive said was a “substantial” part of the car’s value.

Toyota sources parts from Turkey. “Turkey over the years has become quite a big components player,” Van Zyl said.

Key parts from Turkey include tires, lead-acid batteries and wheels. Data from Turkey’s investment agency shows the UK is the country’s fourth largest market for automotive components after Germany France and Italy. Bosch is the country’s biggest automotive supplier by revenue according to 2017 data, followed by Bridgestone tire maker Brisa and Japanese electrical component supplier Yazaki.

Turkey is outside the EU, but the UK currently trades tariff free with the country because of Turkey’s customs union with the EU.

Honda is also likely to be affected, although the automaker has said it will close its plant in Swinton, which builds the Civic compact car, next year.

The SMMT has previously drawn attention to the importance of maintaining the relationship with Turkey thanks to UK’s strong automotive trading links with the country. In 2018, 31 percent of Britain’s engines were exported to Turkey, largely diesel engines from Ford’s Dagenham plant heading to the company’s Transit plant there. The Turkish-built Transit meanwhile is the UK’s biggest selling van.

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