Tuesday, September 26, 2023

News: Automotive giant, Toyoda Gosei, to dissolve UK subsidiary hit by Brexit and COVID


Japanese-owned auto parts manufacturer, Toyoda Gosei has made the decision to dissolve its subsidiary in the UK, Toyoda Gosei UK Ltd. (TGUK), as a part of its restructure of the company’s European business.

Rothbiz reported in 2021 on the company's decision to close the business in the UK with both plants at Rotherham and Swansea affected. The decision was due to changes in the global automotive sector and reduced demand in the UK and 458 jobs have been lost.

Having already moved som European manufacturing to the Czech Republic, bosses said it would now aim to grow its business in Europe centered on Toyoda Gosei Czech (TGCZ).

A statement from the company said: "As the automotive industry undergoes dramatic changes, Toyoda Gosei is restructuring its business globally as one part of efforts to grow sustainably into the future. The decision to close TGUK was made against the background of the changing business environment as automakers decrease or end production in the UK, leaving little expectation for growth in the business of TGUK.

"Manufacturing operations had been transferred to TGCZ and other companies, and production at TGUK ended in July 2023. Liquidation of TGUK is scheduled to be completed by around the end of 2024."

Toyoda Gosei Co., Ltd, which is based in Kiyosu, Japan and celebrated its 70th anniversary in 2019, opened in the UK in 1999, manufacturing weatherstrips for a range of car makers. The Rotherham site at Templeborough was its first in Europe.

2019 accounts for TGUK reported that: "The potential impact of Brexit, further associated customer shutdowns and the new challenges of COVID will impact sales and profitability." Production turnover in 2020 was 23% down on the previous year and this dropped another 10% for 2021.

The company reported that Brexit impacted "turnover, profitability and appropriation of lead-times of goods and services," adding that leaving the EU had increased administration, cost, and pressure on on-time deliveries which led to post-production delays at customers.

In the 2022 accounts, TGUK reported that turnover was down from £42m in 2021 to £35.4m in 2022. Losses before tax increased year on year by £26.1m from £5.2m to £31.3m. This was due to a combination of the closure costs of £24m, reduced impairment (£0.4m) and increased staff costs (£1m) along with the reduction in turnover.

The company had been kept trading by loans from the parent company - £8m came through group loans in 2022. As at 31 March 2022, the company had net current liabilities of £34m and net liabilities of £172m. At the time, Toyoda Gosei Co Ltd said that it remained committed to continue to support Toyoda Gosei UK Ltd and it would provide adequate funding to enable the company to meet its obligations as they fall due.

Toyoda Gosei Co Ltd website

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