Toyota, the world’s largest car manufacturer, is actively evaluating the “export potential” of its UK factories to deal with potential tariff challenges brought by US President Trump. If the plan is implemented, Toyota aims to minimize trade risks and increase market flexibility amidst global supply chain changes.
Matt Harrison, Chief Executive Officer of Toyota Europe, stated in an interview with the Financial Times that the company is monitoring changes in US trade policy and will study the feasibility of exporting to the US through its UK factories if business conditions allow.
The US government plans to implement “reciprocal tariffs” on April 2nd, which would allow the US to impose tariffs on imported products based on the levels set by trading partners on American goods. Currently, the EU imposes a 10% tariff on US cars, while the US only levies a 2.5% tariff on European cars, potentially leading to retaliatory measures against the European car industry by the US.
If the UK can successfully avoid US tariffs while Trump imposes tariffs on other trading partners such as the EU and Mexico, the export potential of Toyota’s Burnaston factory in the UK will significantly increase.
However, Harrison emphasized that due to the difference in consumer preferences between the small car models produced by the UK factory and the preference for larger car models in the US market, even if successful, the export quantity would still be limited.
According to The Guardian, Toyota has had a factory in the UK since 1992 with approximately 3,000 employees producing Corolla hatchbacks. Additionally, Toyota has announced plans to produce electric vehicles in the UK and will maintain its operations at eight factories in Europe to strengthen its regional manufacturing capabilities.
Based on its financial data, the company experienced a 13.1% sales growth in the European market in 2024, exceeding one million vehicles, while the overall European market growth was only 0.9%, highlighting Toyota’s strong competitiveness.
With the changing demand in the global electric vehicle market, Toyota is actively promoting electrification and enhancing global production capacity to adapt to regional market needs.
Reuters reported that Toyota announced on Wednesday, March 12th, its plan to launch nine new all-electric vehicle models in the European market between 2025 and 2026, covering both the Toyota and Lexus brands to address the growing electric vehicle demand in the region.
In the Chinese market, Toyota is increasing its investment to enhance competitiveness. The company plans to establish a wholly-owned electric vehicle and battery production plant in Shanghai with an annual production capacity of 100,000 vehicles and intends to start producing Lexus brand electric vehicles in 2027. This move will help Toyota compete more directly with strong local competitors in the Chinese market such as BYD and NIO.
Simultaneously, Toyota continues to invest in the US market to ensure its competitiveness in North America. Toyota has invested $14 billion in building a battery production facility in North Carolina, which is ready for production and plans to start supplying electric vehicle batteries to the North American market in April 2025.
In recent years, Toyota has benefited from the strong demand for hybrid vehicles, particularly in the US market. This strategy has allowed Toyota to maintain steady growth amidst a slowdown in global electric vehicle demand.
Despite a brief slowdown in global electric vehicle sales in 2024, Toyota has maintained its dominance in major markets like the US and Europe by offering a “multi-pathway approach” with both hybrid and all-electric vehicles.
In 2024, Toyota sold 10.8 million vehicles globally, securing the title of the world’s top-selling automaker for five consecutive years. However, the company’s sales in the Chinese market have declined due to intensified competition from local electric car brands. With fierce price competition in the Chinese electric vehicle market, Toyota is adjusting its strategy to seek a more effective market position.
Simon Humphries, Chief Brand Officer and Board Member of Toyota, stated last week at the company’s annual product strategy event: “Providing choices and opportunities is at the core of continuous improvement in cars and everything we do – including the path to sustainable development.”