Honda adds to list of Japanese automakers to cut production in Britain

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A Honda Urban SUV concept vehicle is on display during press preview of the 2013 New York International Auto Show in New York, on March 27, 2013. [Photo/Xinhua]

Japanese car manufacturer Honda Motor Co. confirmed on Tuesday that it will shut down its Swindon car plant in Britain in 2021, its only factory in Europe, a blow to the British car industry that will also sharply reduce local job opportunities.

Honda's decision, which will eliminate 3,500 local jobs, added to the list of the latest Japanese companies to review their operations in the country amid uncertainty of the imminent Brexit, as Britain is set to leave the European Union (EU) on March 29 with a potential "no-deal" scenario.

"We have judged it is difficult to competitively produce electrified vehicles in Europe," Honda President and CEO Takahiro Hachigo told a press conference in Tokyo.

"This has not been taken lightly and we deeply regret how unsettling today's announcement will be for our people," said Katsushi Inoue, Honda's chief officer for European regional operations.

Greg Clark, Britain's Secretary of State for Business, Energy and Industrial Strategy, said, "This news is 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."

Honda's Swindon plant generated 160,000 cars in Britain last year, accounting for 10 percent of Britain's total vehicle production.

With the possibility that no deal out of Brexit is reached, 10-percent tariffs will likely be imposed on exports to the EU, largely affecting Honda's operation in the European market.

What's more, added customs formalities and chaos to the supply chains in Europe will also leave overseas carmakers overwhelmed.

Honda's move follows Nissan Motor Co., another Japanese automaker, which canceled its plans to produce its next-generation SUV at its Sunderland plant in northeastern England.

Nissan has said that it needed to optimize its regional investment strategy, addting that uncertainties surrounding Brexit played a part in its decision.

Toyota, Japan's biggest automaker, also began to review its status in Europe.

The company warned earlier this month that although it has no plans to change operations in Britain for now, a no-deal departure will force it to suspend production at its Derbyshire factory.

The latest string of Japanese automakers' exit from their British factories was also affected by a free trade deal between Japan and the EU from which the carmakers will benefit.

The Japan-EU Economic Partnership Agreement went into effect on Feb. 1, under which the EU will cut 10-percent tariffs on vehicles imported from Japan starting from 2027.

In 1989, Honda began building engines in its Swindon factory, where car production lines went into full operation in 1992. About 90 percent of its production is being exported to the EU. 

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