Toyota plans to build its next generation Auris car at its Burnaston plant in Derbyshire, based on the assumption a transitional Brexit deal will be secured, according to reports.
Two sources familiar with the matter told Reuters that the Japanese car firm was set to make the decision based on the understanding that the government will carve out a transitional deal for Britain's departure from the European Union.
The final decision is due to be made by the end of the year, according to a government briefing document Reuters obtained via a freedom of information request.
Toyota builds the current generation of Auris hatchbacks at its plant, and in March, it said it will invest £240m into upgrading its Derbyshire plant, but warned that tariff-free access from the UK to the continent was essential to its future success.
In a statement, Toyota said:
Toyota announced investment upgrades for its vehicle plant at Burnaston some time ago, which shows we are doing all we can to ensure our UK operations are as competitive as possible.
The company’s position on Brexit has remained consistent since the UK referendum – that a competitive environment for the UK automotive sector must be maintained in the future. This means continued tariff and barrier-free market access between the UK and Europe that is predictable and uncomplicated.
There are no imminent investment decisions to take on our UK manufacturing businesses. With regard to specific models, Toyota has never commented on future production plans as a matter of course.
The car industry has been vocal of Brexit risks to its success, though Nissan has issued plans for continued investment in the UK, first announcing it would make its next Qashqai SUV and X-Trail SUV model at its Sunderland plant, and last month that the new Nissan leaf plant will be built there too.
The Society of Motor Manufacturers and Traders (SMMT) has warned that investment in the UK could be at risk due to ongoing uncertainty over whether Britain will face new tariffs.
The SMMT's chief executive Mike Hawes said in June that a transitional deal was imperative to stop the automotive sector falling off a cliff edge.
"It is time to stop playing with words," he said. "Soft or hard Brexit and now open mean nothing. It's time to be brutally honest; our sector needs a comprehensive and bespoke trade agreement."