'Devastating': Honda to shut United Kingdom plant, 3,500 jobs at risk

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Honda confirmed on Tuesday what many had feared: It is shutting down its United Kingdom factory in Swindon in 2021 and putting 3,500 jobs at risk.

Another Japanese vehicle company - Nissan (7201.T) - said this month that it wouldn't build its X-Trail SUV in the United Kingdom as previously planned.

The Swindon factory produces 150,000 cars per year and employs around 3,500 people.

Honda's electric vehicle strategy will see it move activity only to regions where it expects to be able to hit high production numbers, which do not include the UK.

"Should Britain leave without a deal and WTO tariffs are applied to United Kingdom vehicle exports, the same cars made in Japan may well end up costing less to import into the European Union than those produced just over the Channel in England", LMC's director of global production forecast, Justin Cox, said in the February 11 report.

Amid a global manufacturing restructure, Honda confirmed on Tuesday that it intends to shut down its production plant in the United Kingdom.

"The bosses in Japan have said it's nothing to do with Brexit".

At the time, Honda said it would make the United Kingdom its production hub for the Civic, with the model being exported to more than 70 countries around the world, including North America and Canada.

Honda also said it will stop making the current Civic Sedan model in Turkey but will continue business operations in the country.

It comes after Nissan opted to move production of its new X-Trail model from Sunderland to Japan instead, citing industry headwinds.

The plant closure will be one of several by carmakers reassessing their presence in the United Kingdom and Europe.

Honda said it had informed employees about what it called its "proposal " to close the Swindon plant.

Last autumn, Honda said it was committed to UK-based production, regardless of the outcome of Brexit negotiations. Honda Turkiye A.S. now produces 38,000 units per year. "This has not been taken lightly and we deeply regret how unsettling today's announcement will be for our people", Katsushi Inoue, the president of Honda's European arm, said in a statement.

"Without free and open trade between the U.K. and the rest of the EU, Japanese companies will not be impressed by any U.K. -Japan trade deal".

"Decisions like Honda's this morning demonstrate starkly how much is at stake", Clark said, adding that the decision was a very big blow.

Honda also operates two plants in Mexico that now build the Fit, HR-V, and CR-V.

Analysts say that while Brexit was nearly certainly a factor for Honda, other reasons were likely to have played a part, including a massive EU-Japan free-trade agreement recently signed and the wider struggles of the auto industry.

But Honda has provided us a statement that reveals the hatchback and Type R appear to be safe, where production may be moved to, and when we may be seeing a totally new Civic.