Honda has said that a no-deal Brexit could cost the Japanese carmaker tens of millions of pounds in additional tariffs.
Ian Howells, the European boss of Honda, said the group remains committed to its Swindon factory but costs could rise by ten percent if the UK fails to reach a deal.
“We’d probably be looking at something like 60,000 additional bits of documentation we would have to provide to get product to and from Europe,” said Howells.
“If we end up with WTO tariffs, we’d have something like 10 per cent costs in addition of our shipped product back into Europe and that’d 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.”
The car manufacturer employs 3,500 people at its plant in Swindon. Although Brexit would impact productivity and competitiveness, it would be a “very big decision to take a different approach”.
“The UK forms part of our global network of manufacturing plants, so the only place we produce the vehicle we produce at Swindon is in Swindon itself. The logistics of moving a factory the size of Swindon would be huge and as far as we’re concerned, we’re right behind supporting continued production at Swindon,” he said.
The warning from Honda comes following Jaguar Land Rover‘s announcement to move 2,000 staff to a three-day week at its Castle Bromwich plant until Christmas.
The three-day week is due to “continuing headwinds impacting the car industry”.
The carmaker also warned “tens of thousands” of jobs that could be axed in the sector if the government does not reach an agreement with Brussels.
Shares in Honda (TYO: 7267) are trading up 2.08 percent at 3.284 (1007GMT).