Honda to cease production at its Swindon factory in 2021

More than 3,500 people work at Honda's Swindon plant

The struggles of the British vehicle industry in the past two years have been well documented, and today we are expecting confirmation of the latest blow: the exit of Honda manufacturing from the UK.

The company will also stop making its Civic auto model at its Turkey plant from 2021 but plans to continue its operations in the country, Honda Chief Executive Takahiro Hachigo told a news conference in Tokyo.

"We still don't know what sort of changes Brexit will bring at this point", he said.

Honda said under the proposed restructure, the current role of its United Kingdom manufacturing business (HUM) as a global manufacturing hub may no longer be viable. Just two weeks ago, Nissan officially gave up on its plans to produce its X-Trail in the country.

But it has struggled in Europe in recent years, and the industry faces a number of challenges, including declining diesel demand and tougher regulations, alongside the uncertainty over Britain's departure from the European Union, due in March.

Hachigo said the company immediately would begin discussions with affected workers at the factory in Swindon.

The threat of import tariffs for European-made cars from Donald Trump's administration will also be a significant factor in the plant's future, because the USA is one of the Civic's main markets.

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. The closure of this factory will be the first time they have shut down on of their manufacturing plants in their 71 years of operations. "The global automotive industry is facing fundamental changes: technological, commercial and environmental, as well as escalating trade tensions, and all manufacturers are facing hard decisions. They are seeking to consolidate production in Japan".

Honda announced plans for a six-day closure, in an effort to prepare for any Brexit-related issues, just last month.

The Swindon plant, which now employs 3,500 people and produces engines and the Civic sedan, is not the company's only cutback.

Business Secretary Greg Clark described Honda's decision as "devastating" and "a particularly bitter blow to the thousands of skilled and dedicated staff who work at the factory, their families and all of those employed in the supply chain".

He said business concerns about a no-deal Brexit were "project reality".

According to the Japan External Trade Organization, known as JETRO, some 869 Japanese companies operated in Britain as of October 2017, but many are concerned a no-deal Brexit would delay customs procedures and hit their trade operations.

Analysts said an EU-Japan trade agreement signed recently had likely also played a part in Honda's decision.

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