No-deal Brexit causing heavy cost concerns for Honda

Company - Mohit Shah - Sep 21,2018

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no deal brexit causing heavy cost concerns for honda

According to Ian Howells, senior vice president at Honda Europe, the company would be impacted with a cost of tens of millions of pounds due to no-deal Brexit.

Honda Europe vice president Ian Howells stated that a no-deal Brexit will result in costly trade barriers, with a further disruption to the company’s supply chain.

According to the senior official, the Japanese automobile firm was making plans for a no-deal outcome but didn’t discuss the relocation of its Swindon plant. Looking at these concerns, the competitiveness of Honda across Europe tends to hang in mid-air.

Similar to other carmakers across Britian, the company only stocks about an hour's worth of machineries at its Swindon plant for keeping the costs down.

In its place, Honda is dependent on about 350 truckloads carrying parts which are delivered from Europe each day.

As per Mr. Howells, the damage to "frictionless trade" in the supply chain will surely impact the production output together with the firm’s effectiveness.

A number of carmakers across Britain, such as Nissan and Jaguar, have already sent a warning related to a no-Brexit deal causing the downfall of the UK car industry.

It is noted that, EU customers purchase about €15bn worth of cars made in Britain on an annual basis. This accounts to 53% of the overall vehicle exports in the UK.

Still, regardless of the uncertainty over any future trade deal, a variety of carmakers like BMW, Nissan Toyota have devoted to intensifying production in Britain right after the Brexit vote.