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Gloucestershire Business News

Brexit trade barriers would undermine UK car industry

The head of one of the region's largest employers has warned of serious consequences for the car industry if the UK leaves the EU Customs Union after Brexit.

Ian Howells, senior vice-president of Honda Europe, is reported to have said that trade barriers could increase costs for car parts suppliers to such an extent that supply chains would be threatened.

Honda builds around eight per cent of the UK's cars at Swindon.

Ian Mean, (pictured) Gloucestershire director for the business organisation Business West said: "Honda is one of the largest employers in our region and Swindon is the home of Honda's only UK plant, so these comments from Honda are of direct relevance to our economy.

"It is extremely rare for Japanese companies to make public statements concerning a foreign government, so we should take this speech seriously. It is an indication of the issue's importance to the firm and of their underlying concern about the current direction of travel of Brexit negotiations."

The request for the UK to remain in the Customs Union reflected a worry that leaving it will create additional paperwork and compliance issues that would hurt Honda's competitiveness and ability to operate.

"Automotive manufacturing depends on 'just in time' supply chains which stretch across the whole of the EU," said Mr Mean. "If done badly, leaving the Customs Union will mean having to fill in forms for every part that criss-crosses the UK border. This is likely to make it much more burdensome to operate and lead to a sharp increase in unproductive administrative costs.

"Honda's concern about leaving the Customs Union is matched by the concerns of hundreds of small and medium sized exporters across the region. When we surveyed our business members, they identified "the ability to trade without additional paperwork" as their number one priority for Brexit negotiations.

"We also found that 51 per cent viewed the prospect of leaving the customs union as 'negative' or 'very negative'; while only 14 per cent viewed it as 'positive' or 'very positive'. For many smaller firms, the additional forms required to export to Europe after Brexit could prove a significant problem for their competitiveness and export performance.

"It also reflects a broader concern within the business community that government simply hasn't been listening - and does not understand the difficulties that many firms will have in adapting.

"For example, we have yet to see a robust cost-benefit analysis by government of the impact of leaving the Customs Union on the economy. It is now time for the government to shift its negotiating position and also to start to address the practical obstacles that many firms will face post Brexit."

What do you think? Email mark@moosemarketingandpr.co.uk 

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