HONDA has warned MPs that a single 15-minute delay at its Swindon plant after Brexit could add £850,000 a year in costs. The automaker gave a stark assessment of the impact that trade barriers and tariffs could have on its manufacturing plant in South Marston.

MPs who visited the site concluded that the delay would be a “significant sum” in view of the Japanese brand’s reported pre-tax profits of £9million between 2016 and 2017 at the site.

Honda is also “actively looking” at moving type approvals – confirmation that production samples meet performance standards - to another EU country, according to a committee attached to the Department for Business, Energy and Industrial Strategy (BEIS).

However the automobile giant said that it remains “committed to its UK and European operations” and was pleased by the committee’s emphasis on frictionless trade.

The evidence follows a warning from Japan’s ambassador to the UK, speaking after a trade summit at Downing Street last month, that the country’s leading firms will leave Britain if there is no seamless trade agreement with the rest of Europe.

The parliamentary committee described the car industry Brexit negotiations as an “exercise in damage limitation” with hundreds of thousands of jobs hanging in the balance.

The report found that there were no benefits from Brexit, only costs, and urged the Government to keep the closest possible relationship with the existing EU regulatory and trading framework to give UK volume car manufacturing “a realistic chance of survival”.

Around 4,000 ‘associates’ are employed at the South Marston site, which produces around 600 cars every day. MPs found: “We heard from Honda their estimate that a 15-minute delay could add around £850,000 per year in costs – a significant sum in the context of reported pre-tax profits of £9m in 2016–17 at the Swindon manufacturing site.”

Under a section headed “the impact of delays”, the report referred to manufacturers using a strict ‘just-in-time’ delivery system. MPs witnessed trucks arriving at the Honda plant “every seven minutes” and the “seamless delivery” of parts to the assembly line.

The report found: “Because of the reliability of transportation across the Channel at Dover, warehouses held only one day’s worth of stock from EU countries.”

Other major automakers had similar calculations and concerns about the impact of Brexit on their operations. Honda was also said to be looking at the possibility of gaining approvals for new products outside of Britain. The committee found: “Companies considering where to manufacture new models in the next 2–5 years will need to decide imminently whether or not to risk staying in the UK and trusting that the Government will secure an outcome which allows future type approvals in the UK to be accepted in the single market.

“We understand that Honda are actively looking at moving type approvals to another EU country; other companies will no doubt be doing the same if current uncertainty continues.”

The gloomy outlook comes ahead of the Society of Motor Manufacturers and Traders’ regional forum at STEAM on March 15, where a speaker from Honda is due to address delegates.

Mike Hawes, the society’s chief executive, said: “UK and EU automotive industries are deeply integrated and it is vital we maintain all the conditions that have made us globally competitive.

“As echoed in the report, this means tariff-free trade, frictionless borders, access to talent and harmonisation of regulations. In the short term, any transitional agreement must retain membership of the customs union and full participation in the single market, while vehicle type approvals issued in the UK must remain valid across Europe.”

Patrick Keating, European Government Affairs Manager, Honda Motor Europe, said: “We were pleased to have an opportunity to provide evidence to the BEIS Select Committee’s enquiry into the impact of the UK’s exit from the EU on the automotive sector.

“Honda is committed to its UK and European operations and continues to engage with Government and parliament to ensure the best business conditions after the UK exits the EU. The BEIS Select Committee report is an important contribution to the debate, and we’re pleased to see that the committee has recognised the importance to the automotive industry of ensuring continued frictionless trade between the EU and the UK, while minimising regulatory divergence.

“As the committee rightly notes, a transition period following the UK’s exit from the EU will give the industry the time it needs to prepare for the new EU-UK trading relationship.”