Toyota is latest car giant to boost UK

TOYOTA yesterday provided a £100 million shot in the arm for British industry but experts warned the manufacturing sector remained stuck in the slow lane.

The Japanese car giant said it had chosen its Derbyshire plant to be its sole European manufacturing centre for a new family hatchback. It plans to take on 1,500 workers over the next two years as production is ramped up.

However, news of the fresh jobs boost for Britain’s resurgent motor industry came as the CBI published a grim snapshot of the wider manufacturing sector.

According to the business group’s latest industrial trends survey – seen as a reliable benchmark of activity – export demand has slumped to its lowest level for nearly two years.

Chief economic advisor Ian McCafferty warned that the crisis in the eurozone and subsequent slowdown in consumer demand was “clearly hitting the UK manufacturing sector”.

Howard Archer, chief UK and European economist at IHS Global Insight, said the sector was now “finding life very challenging as it battles against serious domestic and international headwinds”.

The survey fuelled concerns that the UK economy was in “serious danger” of contracting in the fourth quarter, Archer added.

Economic growth in the third quarter was yesterday left unchanged at 0.5 per cent in revised official data.

The Toyota investment – made as Prime Minister David Cameron toured the Burnaston factory – is the latest piece of good news for the UK car-making industry, which generates annual turnover of about £50 billion.

Figures this week from the Society of Motor Manufacturers and Traders showed that output last year rose by 27.8 per cent, reaching pre-recession levels, while the number of vehicles exported was up 31 per cent. Fast-growing economies in the Far East have helped bolster sales.

In the past year, Jaguar Land Rover has unveiled plans to take on an extra 3,500 workers, including corporate roles in financing and purchasing, thanks to strong global demand for its model line-up.

Toyota has seen its production recover after being hit by the economic downturn and March’s devastating earthquake and tsunami in north-east Japan.

The Burnaston plant has been forced to shed hundreds of jobs in the past three years as the industry struggled in the wake of the credit crunch. The plant currently produces the Auris and Avensis models and employs some 3,100 staff.

During his visit, Cameron said that despite the country facing difficulties in its economy the UK car manufacturing industry was seeing a “renaissance”. He said he hoped the recovery in the automotive sector could be part of a “broader recovery” and a “rebalancing of the economy”.