Car manufacturers call for customs reimbursements from UK if Brexit talks fail

Two major foreign car manufacturers have called on the UK government to reimburse them for additional customs charges if it failed to reach a Brexit deal with the EU.

Japan's two biggest car makers, Toyota and Nissan, want the government to cover an expected 10% tax on car imports from Britain that the EU could impose in the event of a no-deal Brexit, the Nikkei financial daily reported on Monday, without citing sources.

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Officials from both companies declined to comment on the report. Nissan did, however, express alarm over the potential impact of a no-deal on its business.

"We urge UK and EU negotiators to work collaboratively towards an orderly, balanced Brexit that will continue to encourage mutually beneficial trade," Nissan said.

According to Reuters, the Nikkei report shows how a failure to grasp a deal could prompt foreign companies in Britain to "reconsider" their operations in the face of extra tariffs that threaten profitability and custom checks and regulations that could slow operations.

Toyota has a plant in Derbyshire and produced 8% of the 1.52 million cars made in Britain in 2018 and also had an engines factory in Wales.

Nissan operates a manufacturing plant in Sunderland which employs 7,000 people. The company said the factory would become "unsustainable" if Britain left the EU without a deal back in June.

The Japanese firm will push ahead with plans to build its latest Qashqai sports car in Sunderland - an investment worth £52 million - after it won reassurances from the government that Brexit would not affect its competitiveness.