Toyota Plans to Move Production of GR Corolla to Britain

Toyota Motor Corporation TM is reportedly planning to shift some of its GR Corolla production to the United Kingdom. This move is aimed to take advantage of excess capacity in Britain and reduce delivery times in North America, where demand for the petrol-powered hot hatch remains strong.

TM will spend around $56 million to set up a dedicated production line for North America’s exports in its Burnaston plant in Derbyshire. The U.K. plant witnessed a fall in production after the country separated from the European Union, leaving some idle capacity. Moreover, the plant already produced the base model of the GR range, the Corolla hatchback, which would result in an uncomplicated production of the GR Corolla. The new line is expected to add an annual production of around 10,000 cars. To make the line operational by mid-2026, TM will be sending engineers from Japan to share expertise.

GR Corolla’s current production facility at Toyota's Motomachi Plant is already at full capacity and falling short in serving the high demand. The plant produced roughly 25,000 vehicles last year, including 8,000 GR Corollas, and can no longer meet growing global demand for high-performance models. US Toyota plants are also focused on catering strong demand for hybrids in the country, making it difficult to accommodate GR Corolla production.

Another key factor in Toyota’s decision is the recent trade agreement between the United Kingdom and the United States. The trade deal to cut tariffs on car imports from the United Kingdom from 25% to 10% on up to 100,000 vehicles a year is also beneficial for TM. This makes the United Kingdom a more cost-effective export base compared with Japan, which still faces 25% U.S. auto tariffs. However, Japan is also negotiating a reduction of the 25% tariff imposed on car imports.

TM stock has lost 12.7% over the past year compared with the industry’s 16.8% decline.

TM’s Zacks Rank & Key Picks   

TM currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto space are Rivian Automotive RIVN, Standard Motor Products SMP and Luminar Technologies LAZR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Rivian’s current-year loss is pegged at $2.49 per share, implying a 38.37% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters while missing the rest. Rivian delivered an average earnings surprise of 10.81%.

The Zacks Consensus Estimate for SMP’s current-year earnings is pegged at $3.57 per share, indicating a 12.62% year-over-year rise.Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 38.55%. SMP’s shares have gained 4.8% in the past year.

The Zacks Consensus Estimate for Luminar’s 2025 loss is pegged at $4.29 per share, indicating a rise of 53.57% from year-ago levels. The company’s earnings beat the consensus estimate in each of the trailing four quarters, with an average surprise of 11.79%.

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This article originally published on Zacks Investment Research (zacks.com).

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