UK: Toyota's Currency Decision Piles Pressure on UK Auto Suppliers, According to just-auto.com
The decision by Toyota to pay its UK-based suppliers in euros rather than sterling will put added pressure on the company's suppliers to bear the exchange rate costs that have resulted from sterling's strength against the euro, says just-auto.com. A number of car companies manufacturing in the UK have expressed concern at the decline of the euro against sterling since the currency's launch in 1999, including Ford, Nissan, Toyota, Honda and BMW (through its former subsidiary, Rover). The decline of the euro against sterling has hit the profitability of UK operations as UK-made cars have become more costly to build expressed in euros -- and margins have therefore been eroded. Exports to the eurozone of continental Europe are at the core of UK manufacturing strategies in the auto industry.
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