In response to the recent movement in trade relations and the desire to move toward electrification, Honda has decided to stop production in the U.K. and Turkey by 2021.
Honda is one of several companies that have decided to leave or make cuts in the U.K. Along with Honda, Nissan and Toyota have removed themselves from the country. In regards to making cuts, Ford Motor has already declared they are going to get rid of thousands of job and Jaguar said they were going to eliminate 4,500 positions by this January.
This recent pullback from multiple auto companies is recently due to Brexit; causing political and economic instability. Consequently, this has created another strain on the U.K. auto industry, which has already had to deal with Brexit-related issues, possible tariffs and supply bottlenecks prior to the exit from the EU on March 29.
Despite this decision coinciding with Britain removing itself from the European Union, Honda’s CEO Takahiro Hachigo said it was not a factor in their decision. Honda, instead, planned the cease of their production to correlate with the end of their Honda Civic’s life.
Honda’s removal from the U.K. and Turkey is one part of their plan, their goal to become more efficient, and more attuned to local markets. With this upcoming change, Honda will be able to shorten its global production capacity from 5.4 million to 5.1 million vehicles and increase its utilization rate over time from about 97 percent to over 100 percent.
The plant Honda will be closing in the U.K. is in Swindon. This plant, established in 1985, focuses on producing the Civic five-door hatchback. Over the years, the plant has employed 3,500 people and delivered 150,000 vehicles annually. When this plant is shut down, and the new line of Civics come out, Honda says other regions will pick up the output left by the Swindon plant; including North American plants.
The plant Honda will be closing in Turkey focuses on producing the Civic sedan, delivering 38,000 vehicles annually. While the Turkey plant in Turkey will be shut down, Honda plans to carry on with sales and marketing operations.