Speculation grows surrounding planned closure of Honda UK assembly plant

Photo by Honda Final checks of a Honda Civic on the Swindon assembly line

Various media outlets are reporting that Honda UK is to announce the planned closure of the Swindon vehicle assembly plant.

It is expected that the carmaker will make the announcement on Tuesday (19 February).

According to reports, the plant will be scheduled to close in 2022. Known as Honda of the UK Manufacturing (HUM), the plant has approximately 3,500 employees. In addition, about 1,500 suppliers deliver parts to support vehicle assembly.

Justin Tomlinson, MP for North Swindon, the constituency in which HUM is located, said that he had met with government ministers and Honda representatives and they had confirmed the plans. He further told Reuters that the decision was not related to Brexit.

Tomlinson, who voted to leave the European Union in the 2016 referendum, said: “This is not Brexit related. It is a reflection of the global market. They are seeking to consolidate production in Japan.”

For its part, Honda has issued repeated warnings that any interruption to a stable flow of parts from suppliers in Europe would cost the company millions.

Withdrawal from the EU customs union, as outlined in current Brexit plans, would create major back ups at port crossings. In addition to slowing part deliveries, many of which are required to support just-in-time vehicle production, the carmaker would be required to hold considerable amounts of added inventory, a major and unnecessary cost burden.

Opened in 1986, the HUM facility incorporates full vehicle production capabilities, including press, weld (BIW), and paint. The plant further features two assembly lines producing the Honda Civic five-door hatchback. The Honda CR-V crossover, which was produced in Swindon, is now assembled in the United States. In addition, the plant has an engine production facility, including a foundry for engine block/header casting, and a dedicated plastics production division.

The plant was already scheduled to close for six days in April in order to assess how any border/customers disruption would affect assembly operations. In addition, there are plans to front-load production to help maintain dealer inventories.

In the 2008 – ’09 downturn, Honda UK was one of the last carmakers to lay off workers as national vehicle sales plummeted to unprecedented lows. The company has had difficulty regaining lost market share since the recession.

According to figures released by JATO Dynamics, 42,308 units of the Civic were sold across Europe in 2018 (+6%). Sales of the CR-V reached 27,337 (-8%). Honda recently introduced the all-new CR-V i-MMD Hybrid powertrain for the revised CR-V.

HUM produced slightly more than 160,000 vehicles in 2018. This is down from a pre-downturn output of about 230,000 cars a year.

Total vehicle output in the UK last year was approximately 1.52m units, with Nissan, Toyota and Honda together producing half of that number. Earlier this month, Nissan announced that it would not go ahead with launching production of its X-Trail SUV at the plant in Sunderland, citing Brexit concerns.

Ford, which has engine production operations Bridgend, Wales (petrol), and Dagenham, Essex (diesel), as well as an R&D centre in Dunton, Essex, told PM Theresa May last week that it could be forced to move some production out of the UK due to Brexit issues.