Honda boss says no-deal Brexit will cost the car company 'tens of millions'

Honda boss says no-deal Brexit will cost the car company 'tens of millions'

Tuesday, September 18, 2018

A no-deal Brexit would cost car manufacturer Honda tens of millions of pounds, the company’s European boss has warned.

However, Ian Howells, the senior vice-president of Honda Europe, said the company remains “right behind” its production facility in Swindon.

He added that the company is not considering moving the plant out of the UK after Brexit.

The Japanese company employs about 3,500 people at its plant in Wiltshire, building around 160,000 Honda Civics last year, more than 90% of which were exported to Europe and the US.

Mr Howells said that falling back on world Trade Organisation terms would cost Honda “tens of millions”, in addition to more red tape if Britain leaves the EU without a trade deal.

He told BBC Radio 5 Live’s Wake Up to Money: "From an administrative point of view... we'd probably be looking at 60-odd thousand additional bits of documentation we would have to provide to get product to and from Europe.

"If we end up with WTO tariffs, we'd have something like 10% of costs in addition of our shipped product back into Europe and that would certainly run into tens of millions.

"And likewise, when we're looking at componentry coming the other way, again tens of millions in terms of tariffs potentially coming into the UK.

"That impacts our productivity, certainly in terms of the flow of product, but also it does hit potentially our competitiveness. Of course if we are shipping and competing against a European manufacturer in Europe, they're not incurring those tariffs."

 

‘We are right behind our Swindon approach’

Mr Howells said Honda had made "adjustments" to its procedures to allow it to store more components on-site, and is considering changes to production schedules if no deal is reached.

But he played down the prospect of a move away from Swindon, where the firm has operated since 1985.

Mr Howells said: "The UK forms part of our global network of manufacturing plants, it's not just for the European market.

"The only place we produce the vehicle we produce at Swindon is in Swindon itself. So from that point of view it's a very big decision to take a different approach.

"Certainly we are right behind our Swindon approach, and really it hasn't come up that we would have to look at putting Swindon somewhere else.

"The logistics of moving a factory the size of Swindon would be huge, and as far as we're concerned from a European (perspective), and as far as our Japanese head office is concerned, we're right behind supporting continued production at Swindon and indeed our whole European operation to continue there.

"In terms of the impact of Brexit, I think we are looking at hopefully relatively short-term disruption as we get used to the new rules and new ways of doing business."