Head of Honda Europe Ian Howells said a no-deal Brexit would increase costs and documentation ©Honda
Head of Honda Europe Ian Howells said a no-deal Brexit would increase costs and documentation ©Honda

Honda's Brexit warning over 60,000 pieces of paperwork

18 September 2018

A no-deal Brexit could add 60,000 additional pieces of paperwork to Honda’s supply chain, its European head has said.

Ian Howells, head of Honda Europe, said the UK leaving the EU without a deal would both increase costs and the administrative burden on the company.

Speaking to BBC 5 Live Breakfast today, Howells said: “We’d probably be looking at something like sixty-odd-thousand additional bits of documentation we’d have to provide to get product to and from Europe.”

He added if the UK were to trade with the EU under WTO rules it would add around 10% on the cost of components coming into the UK and on the finished vehicles being shipped back into the EU. “That would certainly run into tens of millions,” he said.

“What it does impact is our productivity, certainly in terms of the flow of product, but also it does potentially hit our competitiveness. Of course if we are shipping and competing against the European manufacturers in Europe then they’re not incurring those tariffs.”

Also speaking to Breakfast, Eric Chabot, director of logistics at Honda Europe, said the single market helped Honda run a just-in-time supply chain. “Just-in-time requires adequate planning and in-time delivery against predefined service levels, and [so] you can reach those service levels, you want to minimise the stock so have the service level as compact as possible.

“In a customs union or single market you eliminate part of the hassle by frictionless flow between all those countries, which seem virtually one, and that is a big benefit in any kind of just-in-time operation.”

However, Howells said he expected the impact of Brexit to be a “relatively short-term disruption” as the industry adjusts to any new rules.

While it would be better for Honda if the regulations were the same across the UK and Europe, Howells said the company was more focused on addressing other industry developments including electrification, autonomous vehicles and new environmental requirements. “There’s a whole raft of things that are coming into play here so those are the things that we’re turning our attention to,” he said.

“As far as we’re concerned we’re right behind supporting continued production at Swindon,” Howells added.

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