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Japan firms alarmed over possible no-deal Brexit

  • January 16, 2019
  • , Jiji Press , 10:24 p.m.
  • English Press

Tokyo, Jan. 16 (Jiji Press)–Japanese companies are increasingly alarmed after Britain’s House of Commons rejected a deal on the country’s exit from the European Union on Tuesday.

They are particularly concerned about possible supply-chain disruptions that will have a major impact on their operations in Europe.

 

Toyota Motor Corp. <7203>, Honda Motor Co. <7267> and Nissan Motor Co. <7201> assemble vehicles in Britain, making over 800,000 units together in 2017, about half of total vehicle output in the country.

The three automakers export finished vehicles to the EU, where they procure auto parts for supply to their British plants.

“A no-deal Brexit will lead to plant suspensions within 24 hours,” a Toyota official said, expressing concerns over possible supply-chain snags.

Honda plans to suspend production at its plant in southern England for six days in late April to prepare for a possible delay in parts supply, apparently considering the Brexit deadline at the end of March.

Hitachi Ltd. <6501> expects its railway car factory in central Britain to operate fully for the time being, backed by robust demand. 

 

But a Hitachi official said the company is looking at mid- and long-term risks. “We’re examining impacts on our business in terms of business climate, securing human resources and currency fluctuations,” the official said.

Banking groups, whose European bases are mainly located in Britain, are preparing for Brexit.

The EU has a system that allows a financial company to operate across the region if it gains approval in one EU member country.

Mitsubishi UFJ Financial Group Inc. <8306> has gained securities business approval in the Netherlands, while Mizuho Financial Group Inc. <8411> has done the same in Germany.

Sumitomo Mitsui Financial Group Inc. <8316> is set to open a banking subsidiary in Germany by the end of March.

The Japanese government will make all-out efforts on information gathering and analysis and provide information to Japanese firms and keep them updated, officials said.

Chief Cabinet Secretary Yoshihide Suga said Wednesday that the government will monitor related developments, listen to companies operating in Britain and take full measures to prepare for a possible no-deal Brexit.

The Japanese embassy in Britain plans to hold an explanatory session for Japanese firms operating there as early as next month.

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