Japanese automotive giant Honda has called on the government to make a “fast decision” over Brexit and secure a free trade agreement with the rest of the European Union.
Honda Motor Europe general manager Jean-Marc Streng’s comments came as the firm launched its latest Swindon-built model. They also coincided with a major new report which lists Honda as one of two UK car manufacturers most likely to make future investments outside the UK following Brexit. 
Mr Streng insisted the firm remained committed to manufacturing in Swindon, where it has invested £200m in its giant plant to produce its 10th generation Civic, pictured.
But in an interview with the BBC he also pointed out that the life cycle of any new model was five or six years – flagging up the need for the terms of Brexit to be thrashed out by the UK government as soon as possible.
Standing in front of the newly revealed Civic at the Paris Motor Show, he said: “The commitment of Honda is very clear. We have invested £200m to develop this car. We are in the UK and will stay in the UK for a long time.”
But he added: “What we need is a fast decision. Uncertainty is never good for business and then what we need is free trade because that will help our business.
“As soon as we have a clear statement on Brexit, the better it will be for us.”
Production of the new Civic has just started in Swindon and around half the output will go to Europe.
Mr Streng’s comments also coincided with a clear signal from the UK motor industry that it wanted to maintain strong trade links with the EU following Brexit.
In a show of the sector’s strength – and a clear message to the government to heed its warnings – eight of the UK’s major car brands united at the Eiffel Tower in Paris on the eve of Paris show to demonstrate the diversity and quality of cars currently produced in the UK, pictured below.
Senior executives from Honda were joined by those from BMW Mini, which makes most of the body panels for the iconic car at its Swindon pressings plant, along with representatives of Aston Martin, JaguarLand Rover, McLaren, Nissan, Toyota and Vauxhall.
Industry body, the Society of Motor Manufacturers and Traders (SMMT) pointed out that car manufacturing in the UK achieved a 10-year high last year and British-built cars have never been so popular, with a record 1.2m exported to more than 100 countries. That total looks likely to be beaten this year, with exports reaching almost 900,000 vehicles – 13% ahead of the same period in 2015.
It also said the UK’s biggest trading partner is the EU and 57.3% of UK-produced cars have been exported to the rest of the EU so far this year, followed by 12.1% to the US and 7.1% to China. 
SMMT chief executive Mike Hawes said: “The UK automotive industry is respected globally for its rich heritage, iconic brands and engineering excellence. More than £10bn of investment has gone into new facilities and models over the past five years and we’re proud to see so many rival brands coming together to promote the strengths of UK Automotive ahead of a key international motor show.
“The future success of this sector will hinge upon the ability of the UK to maintain the business and trading conditions that make the sector so competitive globally.”
The risk to future investment in the Honda and BMW plants in Swindon was highlighted today by respected global industrial consultants PA Consulting Group.
Its head of manufacturing Tim Lawrence put Honda and fellow Japanese car giant Toyota – which makes cars near Derby – at the top of a list of motor manufacturers likely to invest in new model development elsewhere once Brexit kicks in.
These firms, he said, are highly reliant on exports to Europe and have relatively low margins and profitability. And any decision to scale down UK production would also have consequences outside the auto industry.
“These companies will have to make key investment decisions in the next two to three years when trade arrangements for Brexit may still be unclear.
“If companies decide to shift production to mainland Europe, it would be a massive blow for the UK automotive industry – combined, Honda and Toyota account for approximately 20% of the vehicles made in the UK.
“As the supply chain investment tends to move with original equipment manufacturers’ volumes, the impact on UK jobs and the economy will be felt beyond the automotive industry.”
The risk of BMW Mini, along with Vauxhall, investing outside the UK was not as high, said PA.
But it added: “Although they have a strong British heritage, especially Mini, they have several European options they can flirt with. BMW could for instance divert production to the Netherlands, where it opened a production line for Minis in 2014, and last year added a line for Mini convertibles.”
Mr Lawrence said that investment decisions were typically made across a two-to-five year time frame, so he did not foresee an immediate reversal of investment decisions already made,
However, he added that decisions taken in next 12 months would impact investments that come into effect from 2018 onwards.
Japanese car firm Nissan, which makes cars near Sunderland, yesterday became the first UK manufacturer to warn it may scrap a major investment without more clarity on the government’s plans for post-Brexit trade relations with the EU.
Speaking at the Paris motor show, chief executive Carlos Ghosn said the firm would not “make an important investment decision in the dark,” referring to where it would produce a coming version of its Qashqai sport-utility vehicle.
Mr Ghosn also said the government should guarantee the auto maker compensation if tariffs were imposed as part of the UK’s separation from the EU. “If the British government cannot respond…we will not go ahead,” he added.
