Honda, Aston Martin Outline `Stark' Brexit Car-Certificate Limbo

Honda, Aston Martin Outline `Stark' Brexit Car-Certificate Limbo

Luxury vehicle maker Aston Martin said that production in the United Kingdom may have to be put on pause if Britain doesn't manage to strike a Brexit deal with the European Union.

That scenario would create "significant costs", Mark Wilson, chief financial officer at Aston Martin, told a committee of MPs on Tuesday, according to an FT report.

He added the result could include "the semi-catastrophic effects of having to stop production because we only produce cars in the UK".

"We're a British company".

"Otherwise, there are significant costs involved in gaining another type approval, but also the semi-catastrophic effect of having to stop production, because we only produce cars in the United Kingdom".

"But re-certifying to a new type of approval, be that federal US, Chinese or even retrospectively applying to use the European Union approval, would mean us stopping our production".

The Vehicle Certification Agency (VCA) provides British cars with certifications for vehicles, their systems and components. "During that transition we would have to look to see how Aston Martin could recertify under a non-VCA approval structure". That will cease to be valid after March 2019 and no one yet knows what system will be in place after that date.

Aston Martin Tokyo
Aston Martin Tokyo Aston Martin

Mr Keating said Honda imports two million components every day from the Continent on 350 trucks and has just one hour of stock on its shelves.

All three executives called for clarity on a transition deal with the EU.

"We're thinking about increasing the amount of warehousing and the amount of stock we would have to hold if friction entered the border", he said. About seven in 10 vehicles sold in the United Kingdom come from the EU.

Free trade agreements require that about 60% of goods must originate from within the countries making the agreement.

Also giving evidence at the select committee evidence hearing were SMMT chief executive Mike Hawes and Patrick Keating, Honda Europe's government affairs manager.

"The figure is more like 25%, which is a long way from the 60% threshold you would need to qualify for a free trade agreement".

They warned that vehicle companies may also struggle to benefit from new free trade agreements with other nations that insists on 60 per cent of a product being made up of "original" or home-made content.