Japanese manufacturers to move vehicle certification out of Britain

24 October 2018

Japanese manufacturers to move vehicle certification out of Britain

24 October 2018

Japanese vehicle manufacturers Toyota and Nissan are preparing to obtain vehicle certification in other European countries as concerns over Brexit continue.

Both companies currently have their vehicles type approved in the UK, as EU rules state that certification obtained in one member country is valid throughout the continent. However, with Britain leaving the EU next year, such a procedure could render those obtained in the country invalid if sold in Europe.

Carmakers are required to ensure their vehicles are certified by clearing standards in areas such as safety and fuel efficiency before they can be authorised for sale within the bloc. 

Currently, the UK’s Vehicle Certification Agency (VCA) can sign-off models to be used across Europe. However, its powers following the Brexit transition period, which ends in December 2020, remain unclear.

These powers are likely to be discussed as part of a final agreement between British and European diplomats as part of final negotiations. However, for manufacturers, this may be too late as they start to plan for a future that may also include import and export tariffs on vehicles and parts.

Toyota is already discussing the suspension of production at the company’s Burnaston plant to avoid creating bottlenecks over parts supply, while Nissan recently broke its silence on Brexit to warn that frictionless trade is key to its factory in Sunderland.

Japanese companies operating plants in the UK include Toyota, Nissan and Honda Motor, which together manufactured about 800,000 vehicles there in 2017. Toyota and Nissan both exported about 80% of their British production to elsewhere in the EU, while the figure for Honda stood at about 30%.

Both companies would join Skoda in sourcing Type Approval in another country within the continent. The company has used the VCA for all its recent models except the Karoq, Kodiaq and Citigo and will now use the Czech ministry of transport for all future vehicles, a spokesperson said.

‘As long-term certainty is required for developing and manufacturing new models, as well as making ongoing changes and modifications to them, it has become necessary for Skoda to find a type approval authority who will have authority to function within the European Union,’ they added.

As an example of the costs and problems involved should companies have to move type approval to a different market, Mark Wilson, chief financial officer at Aston Martin, said last year that the company would face a ‘stark picture’ and a large bill from both stopping factory work and seeking regulatory approval in another country if the current system ended.

‘We need to make sure that [VCA] type approval carries over, it has validity, and it has recognition, and it has the equivalence it has today. Otherwise, there are significant costs involved for us, not only in resourcing to another type approval, but also the semi-catastrophic effect of having to stop production because we only produce cars in the UK.’