Honda confirms that it’s closing its only UK plant

Tokyo – Honda announced on Tuesday that it would shut its sole British plant by 2021, a decision the Japanese carmaker said was not related to Brexit but which Britain deemed deeply disappointing.

Honda, which said the decision was based on changes in the global vehicle market, will also stop making its popular Civic sedan at its plant in Turkey from 2021, although it plans to continue its operations in that country, Chief Executive Takahiro Hachigo told a news conference in Tokyo.

The closure of the Swindon factory in southern England is expected to result in 3500 job losses and marks a big symbolic blow to British manufacturing amid the tumult of Brexit. The plant closure will be one of several by carmakers reassessing their presence in the UK and Europe.

Hachigo’s comments that the decision was not related to Brexit are unlikely to take the sting out of the job losses for the British public, or politicians.

"It is deeply disappointing that this decision has been taken now," UK Business Secretary Greg Clark said.

"This is a devastating decision for Swindon and the UK," he said. "This is a commercial decision based on unprecedented changes in the global market."

For Honda, declining demand for diesel vehicles, tougher emissions regulations and uncertainty over Britain’s expected departure from the European Union next month have clouded its manufacturing prospects in the region.

Two weeks ago bigger Japanese rival Nissan cancelled plans to build its X-Trail sport utility vehicle in Britain. 

Last month, Britain’s biggest automaker Jaguar Land Rover, and Ford Motor Co separately announced sweeping job cuts in Europe. 

3500x1965? - Honda confirms that it's closing its only UK plant
General view of the entrance to the Honda car plant in Swindon. File picture: Eddie Keogh / Reuters.

Honda announced in October 2017 it would stop making vehicles at its Sayama plant in Japan by 2022 as it grapples with a shrinking domestic market.

Like many of its global rivals, Honda is trying to streamline its operations as it invests heavily to develop electric vehicles and self-driving cars, transforming itself from simply a manufacturer of cars into a mobility company.

Japan has repeatedly warned it could pull investments in Britain, which it had seen as a gateway into Europe, if London does not secure a Brexit deal favourable for trade.

The recently agreed EU-Japan trade agreement means tariffs on cars from Japan to the continent will be eliminated, while Britain is struggling to make progress on talks over post-Brexit trade relations with Tokyo.

Nissan’s move

Honda’s announcement would come just over two weeks after bigger Japanese carmaker Nissan cancelled plans to build its next X-Trail SUV in Britain.

In January, Britain’s biggest carmaker Jaguar Land Rover said it would cut 10 percent of its workforce, mainly at home, due to sluggish sales to China and a slump in European diesel demand.

"The car industry in the UK over the last two decades has been the jewel in the crown for the manufacturing sector – and now it has been brought low by the chaotic Brexit uncertainty," said Des Quinn, national officer for the automotive sector at Unite, Britain’s biggest trade union.

Honda said last month it would shut its British operations for six days in April to help counter any border disruption from Brexit. It was also preparing to front-load some production at its plant to ship overseas or build up inventories.

Nissan, Honda and a third Japanese car maker, Toyota Motor Corp, together account for roughly half of the cars built in Britain.

Honda, which has been building more cars for sale outside of Europe in recent years, said earlier this month its production volumes at Swindon would be reduced to 570 cars per day and that it would make job cuts.

"This reduction in volume will not have any impact on our permanent resource levels, and is in line with our current production plans," the company said. 


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