Honda Announces British Auto Plant Closure in 2021

Tokyo, Feb. 19 (Jiji Press)--Major Japanese automaker Honda Motor Co. <7267> said Tuesday that it will close its Swindon automobile manufacturing plant in southern Britain in 2021. Weak sales in Europe led to the decision to shut the company's only four-wheel vehicle factory in the region. The closure is expected to deal a blow to Britain, already at risk of an economic disaster due to its planned exit from the European Union, or Brexit. "What was announced this time has nothing to do with" Brexit, President Takahiro Hachigo told a news conference. The global auto industry is boosting production of electric vehicles, prompted by tighter environment regulations. "It is considered difficult to make electric vehicles in Europe in terms of cost competitiveness," Hachigo said, explaining the reason for the closure. British Business Secretary Greg Clark expressed deep regrets over the closure. "This is a devastating decision" both for Swindon and Britain, he said. Finished vehicle production began at the Swindon plant in 1992. Last year, 160,000 units of the Civic mainstay passenger car were built there. Vehicles made at the plant are exported mainly to other EU member countries and the United States. Honda's auto sales in Europe totaled slightly over 140,000 units in 2018, accounting for only 3 pct of its global sales. In 2001, Honda boosted the annual production capacity of the Swindon plant to 250,000 units. But the operations were partially halted in 2014 because the plant utilization was sluggish. "We'll build up the foundation of the Honda brand in Europe," Hachigo said, showing his eagerness to strengthen the company's business in the region. Honda will export electric vehicles to Europe from Japan and China. Future models of vehicles currently made in Britain will be manufactured mainly in North America. On Feb. 1 this year, Japan's economic partnership agreement with the EU came into force. The EU's 10 pct tariff on vehicles made in Japan will be removed in the eighth year of the EPA's effectuation, giving a tailwind to Japanese auto exports to the region. Meanwhile, uncertainties are growing over post-Brexit trade arrangements with Britain. Among Japanese automakers, Nissan Motor Co. <7201> has scrapped its plan to produce the next-generation X-Trail SUV at a factory in Britain. The new model will be made in Japan. END