The UK “would regret it forever” if it lost its status as a world leader in car manufacturing after Brexit, Business Secretary Greg Clark has said.
He added it was “concerning” that Toyota UK had told the BBC that if Britain left the EU without a deal it would temporarily halt production at its factory in Burnaston, near Derby.
“We need a deal,” Mr Clark said.
The Japanese carmaker said the impact of border delays in the event of a no-deal Brexit could cost jobs.
The Burnaston plant – which makes Toyota’s Auris and Avensis – produced nearly 150,000 cars last year of which 90% were exported to the rest of the European Union.
“My view is that if Britain crashes out of the EU at the end of March we will see production stops in our factory,” said Marvin Cooke, Toyota’s managing director at Burnaston.
BMW, for example, says it will close its Mini plant in Oxford for a month following Brexit.
The main concerns relate to what carmakers say are supply chain risks in the event of a no-deal Brexit.
Toyota’s production line is run on a “just-in-time” basis, with parts arriving every 37 minutes from suppliers in both the UK and the EU for cars made to order.
If the UK leaves the EU without a deal on 29 March, there could be disruption at the border which the industry says could lead to delays and shortages of parts.
It would be impossible for Toyota to hold more than a day’s worth of inventory at its Derbyshire plant, the company said, and so production would be stopped.