Honda set to announce closure of Swindon car plant

Japanese carmaker Honda is set to announce the closure of its Swindon plant in 2022, putting 3,500 jobs at risk.

The Japanese carmaker will shut the plant in 2022 but retain its European headquarters in Bracknell, Berkshire.

Honda is set to make the official announcement on the future of the company on Tuesday morning.

Honda produces more than 100,000 Civic cars in Swindon for the global market. It is the firm’s only factory in the EU.

Brexit fears

The move will see Honda likely to relocate the facility to its home market of Japan.

Brexit is understood to be a factor in the decision, with the carmaker concerned about the imposition of new tariffs after the UK leaves the EU.

Rival Japanese carmaker Nissan also cited Brexit as one reason for cancelling plans to build its X-Trail SUV in Sunderland earlier this month.

Ford and Jaguar Land Rover have also expressed concern about the risk of a potential no-deal Brexit.

Last month, Honda has said it would shut down the factory for six days in April as part of its preparations for any disruption caused post-Brexit.

The company said the move was to ensure it could adjust to “all possible outcomes caused by logistics and border issues”.

The firm said it would help in recovering lost production if shipments of parts were held up at borders.

Last year, the senior vice-president of Honda Europe warned that if the UK left the EU without a deal, it would cost his company tens of millions of pounds.

Ian Howells told the BBC that quitting the bloc without an agreement would affect the carmaker’s competitiveness in Europe.

He said the Japanese firm was preparing for a no-deal outcome, but had not discussed relocating its Swindon plant.

Christian Stadler, professor of strategic management at Warwick Business School, said: “Car manufacturers have repeatedly warned the Government about the threat Brexit poses to British industry.

“We have already seen job losses at Jaguar Land Rover and Nissan has scrapped plans to build the new X-Trail at its factory in Sunderland.

“Reports that Honda plans to close its Swindon plant, which makes more than 10,000 cars every year, would be another huge blow for British car manufacturing and thousands of workers whose jobs depend on it.

“Honda faces the same challenges as fellow Japanese car maker Nissan. The global economy is slowing down, which has hit key markets such as the US and China.

“The crackdown on diesel engines has also hit sales and will continue to do so as car manufacturers face fierce competition to bring a new generation of greener vehicles to market as quickly as possible.

“These difficult conditions will put pressure on companies to be more competitive with their prices. That is bad news for British car manufacturing if vehicles are subject to new tariff after Brexit, as Japan’s new deal with the EU could soon make it cheaper to build cars elsewhere.

“Add the fact that the supply chain for most British-made cars crosses the Channel several times as parts are shipped back and forth, so any delays at the border after Brexit could severely disrupt the industry’s ‘just in time’ production method, and the UK starts to look like a less attractive place for international companies to build cars. There could be more bad news in store for Britain’s automotive industry.”