Honda confirms UK plant closure with 3,500 jobs loss

Decision represents a major blow to British manufacturing amid the tumult of Brexit

Honda cars leave the Honda plant in Swindon, England, which will close in 2021 resulting in the loss of 3,500 jobs.. AP

Honda Motor announced on Tuesday it would shut its sole British plant by 2021, a decision the Japanese car maker said was not related to Brexit but which Britain deemed deeply disappointing.

Honda, which said the decision was based on changes in the global car market, will also stop making its popular Civic saloon at its plant in Turkey from 2021, although it plans to continue its operations in that country, chief executive Takahiro Hachigo told a news conference in Tokyo.

The closure of the Swindon factory in southern England is expected to result in 3,500 job losses and marks a big symbolic blow to British manufacturing amid the tumult of Brexit. The plant closure will be one of several by automakers reassessing their presence in the UK and Europe.

Mr Hachigo's comments that the decision was not related to Brexit are unlikely to take the sting out of the job losses for the British public, or politicians, Reuters said.

"It is deeply disappointing that this decision has been taken now," UK Business Secretary Greg Clark said.

"This is a devastating decision for Swindon and the UK," he said. "This is a commercial decision based on unprecedented changes in the global market."

The plant closure will boost Honda’s operating profit by more than ¥30 billion (Dh995.2m) annually from 2023, according to an estimate by Koichi Sugimoto, an analyst at MUFJ Morgan Stanley in Tokyo.

Under Mr Hachigo, Honda is undergoing a sweeping restructuring of its global footprint, according to Bloomberg. In Japan, it’s planning to end car production at a major plant for the first time in the company’s history, concentrating output to a new facility from 2022.

For Honda, declining demand for diesel vehicles, tougher emissions regulations and uncertainty over Britain's expected departure from the European Union next month have clouded its manufacturing prospects in the region.

Two weeks ago bigger Japanese rival Nissan cancelled plans to build its X-Trail sport utility vehicle in Britain.

Last month, Britain's biggest car maker Jaguar Land Rover, and Ford Motor separately announced sweeping job cuts in Europe.