"Apprehension is therefore growing that a 'withdrawal without agreement' may become a reality," Akio Toyoda said in a rare statement to the Japan Automobile Manufacturers Association.
The statement warned that a no-deal Brexit could lead to suspended production, rising vehicle costs and declining profits due to increasing production costs, creating a nightmare scenario for automakers.
Japanese automakers provided 170,000 European jobs, Toyoda said, adding that companies needed "an unimpaired trade environment between the United Kingdom and European Union." He also urged "flexible responses" after Britain leaves the EU so that businesses could transition smoothly.
The comments come after European officials issued warnings that Britain would no longer receive concessions over the ongoing impasse in negotiations. UK prime minister Theresa May suggested that Britain received a longer transition period but contentious gridlocks over Northern Ireland could derail talks, EU chief Brexit negotiator Michel Barnier cautioned.
"I believe we need a deal. I'm not yet sure we'll get one. It is difficult, but possible," Barnier said.
Japanese automaker Nissan also issued stern warnings after company chairman Carlos Ghosn reminded British leaders that its Sunderland plant is the UK's largest and employs over 8,000 jobs there, in addition to exporting roughly half of all production to the European continent.
CEOs from Jaguar Land Rover, Britain's biggest automaker, French conglomerate Groupe PSA, German automakers Volkswagen and BMW and others also demanded that the UK government avoid a no-deal Brexit or face production cuts, with some threatening to relocate manufacturing to Europe.