Toyota Motor Manufacturing today (4/1/00) confirmed earlier newspaper reports that it is to increase production at its Derbyshire plant from the current annual level of 170,000 cars a year to 220,000.

The 30% boost in production will be achieved by transferring assembly of European market specification three-door Corolla hatchbacks from Japan by the end of 2001.

The factory currently assembles all European market versions of the medium-size Avensis and the Corolla five-door hatchback. Most models are fitted with engines made in Toyota’s second UK plant in Wales.

The move means that Toyota will hire more production-line workers, creating 250 new jobs at Burnaston near Derby and 50 at the engine plant on Deeside.

“This is positive news for Toyota Motor Manufacturing UK,” said senior director Bryan Jackson. “Though not actually further investment in the UK plant, it does confirm our parent company’s faith in the UK operation as a vital and fundamental part of its European strategy.

“We believe that this latest initiative will help limit the economic impact that the strength of the pound against the weakness of the euro continues to have on our UK operation.”

Toyota’s move comes just weeks after General Motors announced the planned closure of its British Vauxhall Vectra plant at Luton in Bedfordshire with the loss of 2,200 jobs. Ford’s Fiesta plant in Dagenham, east London, is also scheduled to close, axing 1,400 posts.

A few months ago, Honda Motor Co. announced that it would transfer the assembly of US-market CR-V sports utility models from Japan to its newly-expanded UK manufacturing operation in Swindon, Wiltshire.

Meanwhile, a report in The Times newspaper said that the increase in production at the UK Toyota plant would offset fixed overhead costs for plant and equipment but would not make Burnaston profitable on its own.

Toyota has long wanted Britain to ditch the pound for the euro and there had been concerns the company might rein back on investment in the UK while the government remained uncommitted.

While Burnaston is Europe’s second most productive car plant, it still made a £52 million loss last year, largely because of sterling’s relative strength against the euro, the Times said.

In a radio interview, Toyota’s Jackson said that Toyota remains committed to the UK, but acknowledged the current difficulties facing car manufacturers.

He told the BBC: “We have a long-term future here, but I don’t want to underestimate the difficulties that all manufacturers are facing with the relationship of the pound to the euro.”

Jackson said Toyota acknowledged its “long-term responsibility to make sure the plant survives”, but admitted it was “very difficult to be profitable given the current exchange rate”.