LONDON, June 20 (Reuters) - Britain’s departure from the European Union’s customs union would ramp up costs for small and medium-sized car part suppliers to such an extent that supply chains could seize up, a senior European executive at Honda said on Tuesday.
Ian Howells, Honda’s European senior vice president, told an autos conference that the company had discovered more complexity and cost as it delved further into the impact an exit from the customs union would have on the British car industry.
“Leaving the customs union will only imply extra costs to SMEs,” Howells said. “The administrative costs become prohibitive. Put very simply the supply chain will start to seize up with obvious impacts on our ability to manufacture vehicles efficiently.”
Honda builds around 8 percent of Britain’s 1.7 million cars at its Swindon plant in west England.
British Prime Minister Theresa May has proposed a clean break from the EU: leaving its single market, which enshrines free movement of people, goods, services and capital, and losing full access to the customs union in favour of a bespoke deal.
Reporting by Costas Pitas; writing by Kate Holton; editing by Michael Holden