Toyota Motor Corp. said it will build a hybrid version of its Auris hatchback car at two U.K. factories, as lawmakers warned the government that Britain’s auto industry may fail without urgent help. Toyota’s factory in Deeside, Wales, will make engines for the cars, which will be assembled in the company’s Derbyshire, north England, plant. The company has sold 370,000 Auris cars in Europe since introducing them in 2007.
Business Secretary Peter Mandelson, who has urged British industry to move toward specializing in green technologies, welcomed the move. His department was criticized in a Parliamentary report today for being inconsistent and slow to act in its support for the industry.
“This will secure production jobs for the future in a very important sector for our manufacturing base in Britain,” Mandelson told Sky News. “There are hundreds of component suppliers around the U.K. that will be benefiting from this production in future.”
Toyota employs around 4,100 people in the U.K. The Business Committee, comprising members of Parliament from the three biggest parties, said in a report that the future of the car industry in Britain “depends on the government taking the right actions now to ensure that the industry is sustained through this period of crisis.”
It urges the Business Department to ease its criteria for applicants to its Automotive Assistance Program, which offers 2.3 billion pounds ($3.7 billion) of loan guarantees to companies in the industry. The program has been “slow to produce results,” with no funding yet given out, it said.
The government has announced another 620 million pounds of programs aimed at supporting the U.K. car industry, which it estimates directly employs 180,000 people. The committee said the government’s 300 million-pound scrappage scheme, announced in April, is showing “encouraging signs.” The government said yesterday 110,800 orders for new cars had been placed since it was announced.
Mandelson said his department was in talks with as many as 20 auto companies about possible loan support for their investment plans and that the scrappage scheme is providing “a huge boost” to the industry.
Toyota had told him the plan, which offers consumers a 2,000-pound subsidy to trade in old vehicles for new ones, had been “received well, used well and is popular with those buying new cars,” he said in a British Broadcasting Corp. interview.