Honda to close its Swindon factory

Honda has announced that it will close its Swindon factory in 2021, blaming “unprecedented change in the global automotive industry”.

The closure of the factory, which currently produces 150,000 examples of the Honda Civic annually (a long way short of the factory’s 250,000 capacity), would mean the loss of 3500 UK jobs.

Honda insists the decision has nothing to do with Brexit, with Katsushi Inoue, Honda’s chief officer for European regional operations, instead pointing to the need to “accelerate [Honda’s] electrification strategy and restructure global operations accordingly”.

Compared with rivals, the company has been slow to react to the increased demand for electrified vehicles. It launched its latest hybrid, based on the CR-V SUV, last year, but it won’t have a fully electric model in its range until the production version of its Urban EV concept (below) arrives later in 2019.

The threat of import tariffs for European-made cars being imposed by the Trump administration is also likely to have been a factor in Honda’s decision to end production at Swindon, because the US is one of the main export markets for the Civic.

Meanwhile, the Japanese government recently struck a deal with the EU that means tariffs on Japanese-made cars coming into 27 EU countries will be phased out this year, reducing the financial benefit of Honda having a UK factory.

The company’s intention is to consolidate much of its manufacturing back to its home country of Japan, from where it can ship fairly easily to China – a market where high sales volumes are expected.

Honda UK Manufacturing was established in Swindon in 1985, with the factory producing more than 230,000 cars annually back in 2008. However, sales failed to recover following the financial crisis, leading to half of the factory being mothballed.

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