• To spend EUR265m concentrating new generation C-segment Auris hatchback output in UK and sedan production in Turkey
  • Strategy intended to optimise European plants’ efficiency and increase production 'localisation'
  • Adds up to 1,500 jobs in UK (500 initially) and 400 in Turkey
  • Move to take place within 2 years
The TMMUK plant in Burnaston, Derbyshire

The TMMUK plant in Burnaston, Derbyshire

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Toyota on Thursday (24 November) said production of the next generation Auris [Corolla] hatchback for Europe in petrol, diesel and hybrid versions would be consolidated at Toyota Motor Manufacturing UK (TMUK) in Derbyshire, England while the sedan is built in Turkey alongside the seven-seat Verso MPV [minivan].

The current Auris is made both at Toyota Motor Manufacturing Turkey (TMMT) in petrol and diesel forms and at TMUK (petrol, diesel, hybrid). TMMT has also built previous generation Corolla sedans and wagons.

"These production changes will lead to new investments and higher employment levels at both factories," Toyota Motor Europe (TME) said in a statement.

"The combined additional investment to implement the change will be around EUR265m for both factories. TMUK expects to recruit up to 1,500 additional workers, with a first recruitment phase of around 500 from the middle of 2012. TMMT expects to recruit an additional 400 workers within two years, starting in the latter part of 2012."

Toyota said consolidating production of the next generation hatchback at TMUK would allow a higher utilisation ratio of the existing production capacity at the plant, leading to higher efficiency. TMUK will continue producing the D-segment Avensis on the same line.

The British plant, opened in 1992 to make the D-segment Carina II (Corona) for Europe, has had a troubled couple of years. Last year, after Auris and Avensis sales did not meet expectations, the plant operated a series of short-time and downtime measures and offered incentives to encourage up to 750 employees to leave as it consolidated two final assemly lines into one and, later, added the Auris Hybrid to the schedule.

The ending of various European scrappage schemes in 2010 also affected demand.

Last April, with the restructuring barely completed, the plant's output was curtailed temporarily by parts shortages caused by the 11 March north-east Japan earthquake and tsunami which led to more short-time working in April and May and normal output was not resumed until June.

"This change of production strategy is set to take place within the next two years. It will increase the total volume of C-segment cars produced in Europe," TME said.

"This announcement further endorses the importance of TMUK and TMMT as production centres for Toyota in Europe and is in line with our plan to increase local production for cars sold in Europe," said TME president and CEO Didier Leroy.

"The C-segment hatchback is a core vehicle for Toyota, competing in a strategic segment of the European automobile market, while sedans are stronger sellers in eastern Europe, Turkey and other countries in that region. We are confident that our factories in UK and Turkey, supported by committed workers and suppliers, will continue to deliver superior quality vehicles and contribute to Toyota's sustainable growth in Europe in the future."

TMUK deputy managing director, Tony Walker, said: “This is great news for Burnaston [Derbyshire] and Deeside [Wales]. It will safeguard our current employment levels and create up to 1,500 additional jobs in the next two years, with the first phase of recruiting 500 members starting in the middle of next year.

“The decision to bring all production of new generation C-segment hatchbacks to Britain reflects on the excellent work done by our members in delivering the highest standards in productivity and quality. Going beyond our own operations, there will also be benefits for our local communities and regions, safeguarding thousands of jobs in the UK supply chain.”

About 85% of TMUK engine and vehicle production is shipped to Europe and other markets.

Toyota said it would spend around GBP100m (EUR116m)on tooling and equipment at Burnaston, taking total spend on its UK manufacturing business to over GBP2.1bn since it was established as the company’s first European production centre in 1989. In addition, a further GBP85m will be spent in the UK supply chain.

Toyota Europe also has a factory in northern France, building the Yaris, and engine and manual gearbox plants in Poland.

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