Honda Motors has recently announced its decision to shut down its UK operations by 2021, which is a major setback for the south west. The Swindon car manufacturing plant is the only Honda factory in Europe and produces 150,000 Honda Civics, their flagship product. This news has come at a time when other car manufacturers are moving their operations overseas.
Changes in UK’s Car Industry
Over the years, the UK car industry has been facing major challenges. Nissan X-trail has ceased production in Sunderland, Jaguar Land Rover has cut 4,500 jobs, Ford has axed 1000 jobs in Bridgend, and there have been job cuts at Vauxhall’s Ellesmere port. With Honda’s decision to move production elsewhere, it is another blow to the UK car industry.
Despite the challenges faced by the industry, there are some positive developments. For example, China’s Geely is financing Lotus to create a state-of-the-art factory at its HQ in Norfolk, Aston Martin will start production in South Wales by 2020, and production of the Mini in Oxford increased last year. However, these are small gains after the larger losses of Nissan and Honda.
Reasons for Car Manufacturers’ Relocation
The reasons behind car manufacturers’ relocation are the slump in demand for diesel vehicles, tougher emissions regulations, and a slump in China’s consumption of foreign cars.