Toyota and Nissan plan to ask the UK government for reimbursement in the event that the latter fails to reach a Brexit trade deal with the EU by the end of this year, according to various media reports.
Various companies in the European automotive industry also recently urged both sides to reach a trade agreement soon so that they could avoid trading under World Trade Organization and incur 10pc tariffs.
Toyota, which operates a factory in Derbyshire, produced around 8pc of the 1.52mn cars made in Britain in 2018, while Nissan employs around 7,000 workers at its Sunderland factory. If a deal fails to materialize, a number of foreign auto companies, like Toyota and Nissan, operating in the UK said they will reconsider maintaining factories in the country to avoid paying extra tariffs and erode their profitability.