By Naomi Tajitsu
TOKYO (Reuters) - Britain's decision to leave the European Union may dent Toyota Motor Corp's (T:7203) competitiveness in the region, but the Japanese automaker did not see it as a trigger to shift production away from the country, a senior executive said.
Speaking to reporters in Tokyo this week, Chief Competitive Officer and Executive Vice President Didier Leroy said he had "trust in the UK government that it will offer fair treatment" for all companies when negotiating agreements to mitigate the impact of Brexit.
Businesses operating in Britain are concerned the country is heading towards a so-called "hard Brexit" which would leave it outside the European Union's single market and facing tariffs of up to 10 percent to export cars to the trading bloc.
Having produced nearly half of all cars made in Britain in 2015, Japanese automakers are facing decisions on how they can stay competitive in a post-Brexit Britain, as they will be exposed to any rise in tariffs.
Leroy, who also serves as chairman of Toyota's European operations, said the world's largest-selling automaker would have to improve overall performance to offset increases in tariffs "because the customer would not accept paying that.
"It will be a big negative impact in terms of competitiveness if we have a trade tax," Leroy told reporters in comments for Thursday publication. Maintaining competitiveness and free access to the EU market is crucial for operations in Britain, he said.
"But at the same time, does it mean that we should give up (producing in Britain)? ... I can tell you that we won't give up and move to another country just because it will be easier. We have a fighting spirit and have trust in the people at our UK plant."
Toyota produces the Avensis saloon and the Auris hatchback at its plant in Derbyshire, central England, which produced about 190,000 cars last year. Of that, 75 percent went to the European Union, and only 10 percent was sold within Britain.
Nissan Motor Co Ltd (T:7201) has said it may halt investment in its British factory unless it receives a guarantee of compensation for Brexit-related costs. Japan's second-biggest automaker said it would decide next month whether to build an upcoming vehicle model at its plant in the country.
NOT SEEKING CONSOLIDATION
Leroy said that while Toyota has been increasing partnerships with rival automakers to develop new vehicle technologies, it was not focussing on takeovers at the moment.
Toyota earlier this month said it was considering cooperating with compact carmaker Suzuki Motor Corp (T:7269), just months after completing a buyout of Daihatsu Motor Co Ltd. The company also has partnerships with Mazda Motor Corp (T:7261) and Germany's BMW (DE:BMWG).
"We are not talking about consolidation in this case for us, we are really talking about partnership," Leroy said, referring to talks with Suzuki.
While Toyota hoped to leverage partnerships to increase competitiveness, Leroy said it had enough firepower to keep up with the rapid pace at which the industry is developing self-driving and eco-conscious cars.
"Some carmakers around the world believe that they will never be able to do this alone. That's why they are sometimes talking about consolidation," he said.
"But we have the appropriate scale for that. We don't have any problem."