Honda Motor in 2021 will close its British factory and stop the production in Turkey

19 February 2019

Honda President says he's leaving England not Brexit, but only because of falling sales

Today on a press-conferences in Tokyo the President of Honda Motor Mr. Takahiro Hachigo said that in 2021, the company will close its British plant in Swindon (in Wiltshire in the South West of England), completely abandoning car production in Europe, as the impending implementation of Brexit seems to exacerbate the problems of the Japanese automaker on the continent. The company aims to start the production of environmentally friendly transportation to the actuator and arranges a global restructuring of production processes.
 

The only European car plant of Japanese automaker Honda Motor in Swindon working with a large underutilization of capacity because of falling sales in the UK market

In 2018, the plant in Swindon, 85 kilometres West of London, produced approximately 160 thousand cars, including a major European bestseller of the brand Honda – Civic mid-size model, which is much lower than the estimated annual production of 250 thousand cars.

The closure of the Honda plant in England dedicated to changing the generation of the most popular models of the Civic

Honda also plans to stop production of the Civic model at its Turkish plant in 2021.

To avoid sequestration and the Turkish division of the Honda Motor, also produces model Civic current-generation FC/FK

Mr. of Hachigo said: "This decision has nothing to do with Brexit. We were looking at a production site for the release of the next generation models of the Civic and made the decision with regard to the environmental standards in the U.S. and in Europe."
The closure of the English factory Honda will lead to the layoff of 3,500 workers. European sales of the crossover Honda fell to just over 100 thousand cars per year, with market share around 1% this puts the Japanese brand following compatriots such as Mazda Motor and Suzuki Motor.
President Hatago also said: "Today we will start the discussion with our employees at the factory in the UK. We would like to do for them as much as possible". As they say – much more!

In the 2020s Honda Civic (pictured sedan) will no longer be considered British products

The UK authorities have already announced that deeply disappointed by the decision of Honda. The Minister for business, energy and industrial strategy of the UK Greg Clark said: "the UK is one of the leaders in the development of automotive technologies, and is therefore deeply disappointing that the decision is still pending".
Date "preassessment" Brexit, scheduled for March 29, became even darker for a local business, which is already mired him in a variety of problems. While other automakers (such as Toyota) are planning more moderate measures such as temporary suspension of production in the light of uncertainty about Brexit, it is Honda boldly went even further, simply by closing your the only production site in Europe (which just swore not to do on the eve of voting for Brexit). The biggest shock was that such a radical and irrevocable decision, somewhere reminiscent of a lockout.

Most of the production Honda (photo hatchback Civic) was exported, and now fall under the customs tariffs of the EU

By the way, Honda has suspended production at one of two production lines of the plant in Swindon in 2014 and has concentrated all its efforts on the Civic for markets such as Japan and the United States. Previously, the automaker is still looking for a way to retain its European production capacity after Brexit.
The plan was to start production of new generation model Civic at the factory in the UK in the early 2020's. However, as the growing prospects of "success" Brexit, the viability of Britain as an export base has become less certain. Closing the factory, Honda seeks to boost profits in its European operations (of course, only business and nothing personal – ed.).
In the absence of progress on the agreement on the continuation of preferences on trade in cars between Britain and "the continent", the British autoproduction will be immediately imposed a 10 percent tariff and will become again necessary customs clearance, which will inevitably lead to chaos in a complex supply chain of finished vehicles and components. To preserve maximum effectiveness of production plants in the UK are now forced to store the excess number of parts for a few hours production (tE. the system of deliveries "just in time" partially minimized), as more than thousands of trucks with components for local Assembly plants every day crossing the Eurotunnel.
At the same time the Honda will retain its European headquarters of Honda Motor Europe in English Branle and after Brexit. Denying that Brexit was a decisive factor in the decision about the closure of the factory, Mr. Hachigo acknowledged that he certainly has created uncertainty for plans for the preservation of the British production company. He said: "the greatest risk of disruptions in supply of parts".
Another senior representative of a major carmaker said: "the Current circumstances do not allow us to make the decision associated with major investments."
So, anxiety for the same reason made, for example, Nissan Motor to abandon plans to release the next-generation crossover (X-Trail) in the UK.
In turn, Toyota Motor is considering a temporary suspension of its plant in the event of non-delivery of components for Brexit. According to LMC Automotive, the company ships approximately 90% of the cars produced in Britain for export to Europe, while Nissan exports is approximately 60%.
Worried not only Japanese automakers, so BMW could move some production from its factory in Oxford in the Netherlands, and Ford Motor, according to British media reports, calculates the possibility of ending production of the engines in the UK.
However, Toyota has previously warned that it may be forced to suspend production in the UK if the country will leave the EU without a formal agreement on the conditions of your release. The company's factory in Burnaston Central England, which last year produced 130 thousand vehicles, uses for the production of 150 vehicles per day components imported trucks, a third of which comes from continental Europe.
These supplies will likely fall under the new customs tariffs and border checks in the event of Brexit. In the factories of Toyota stock components originally designed only for a few hours, so the delay of supply would adversely affect production. Toyota executives said that the UK should at any cost to avoid a "Brexit without agreement on output".
Re-introduced duties on EU cars Toyota, manufactured in the UK, can lead to the fact that the company will reconsider its position on maintaining the country's auto industry.
The loss of competitiveness may create a situation where Toyota is "very serious about business and future investments," said last year, the President and CEO of Toyota Motor Europe Johan van Zyl (Johan van Zyl).
Other international companies, including Japanese consumer electronics manufacturers Panasonic and Sony are also planning to move some manufacturing operations from the UK to the continent.

Britain shocked by news of the closure of the Honda plant
Reaction to the news that one of the main employers and taxpayers of the United Kingdom – Honda Motor will close its local car plant by 2022, has caused in the UK almost a political explosion that gave rise to the opposition in the Parliament to present the government of Prime Minister Theresa may account for the departure of the companies, caused by the divorce with the European Union. So, a member of the labour party, Rachel Reeves, who chairs the Committee on business strategy, energy, and industrial in the house of Commons, criticized the efforts of Ms. Mae for the withdrawal of great Britain from the customs Union and the single market.
She wrote in her blog: "Terrible news for the workers of Honda and supply chains, as well as a crushing blow to production in the UK. It just can't continue. The Prime Minister must immediately find a solution to save us in the common market and the customs Union with the EU to protect the freedom of trade".
The British government is trying to mix the consequences of the decision, Honda Motor. The Secretary of state for international trade Liam Fox, for example, refused to comment on the rumors about closing the plant ahead of the official announcement of the Honda Motor. Thus, according to the BBC, he referred to "a significant drop in demand" for cars because of new European rules on emissions from diesel engines, probably thinking that should be associated with the closure of the plant with failure of negotiations on Brexit.
The representative of the ruling Conservative party Mr. Justin Tomlinson told the Reuters news Agency that the planned closure of the Honda plant has nothing to do with Brexit: "It is a reflection of the situation on the world market. They only seek to consolidate production in Japan"..