Honda to close only British factory, says move not Brexit related

"We have made a decision to carry out this production realignment in Europe in light of our efforts to optimize production allocation and production capacity globally as well as accelerating electrification", Hachigo said.

"This has not been taken lightly and we deeply regret how unsettling today's announcement will be for our people", he added.

Blaming the government's focus on diesel cars, he added that Citigroup's recently agreed £1.2bn deal to buy a Canary Wharf skyscraper - which follows UBS and Goldman Sachs' decisions to invest previous year - shows massive confidence in a post-Brexit Britain. Volkswagen also said its monthly sales dropped dramatically towards the end of previous year - as much as 37 per cent in September - as it struggled to adjust to tough new European Union regulations on diesel emissions.

In presenting the restructuring plan, Hachigo stressed that Honda was striving to adjust to a fast changing global industry.

Honda's Europe boss, Ian Howells, said the automaker will focus its investments on China, the US and Japan.

"While Brexit is not mentioned by the company as a reason for the announcement, we believe that the uncertainty that the Tory government has created by its inept and rigid handling of the Brexit negotiations lurks in the background". "This decision has been made on the basis of... global changes". With current output, the plant produces 150,000 cars per year.

The plant began production in 1989 and has since produced bestsellers such as the Honda Accord and the Honda Civic.

The plant, located in Swindon, now builds the Honda Civic hatchback and the Civic Type R models.

Toyota executive vice-president Shigeki Tomoyama noted that the firm's assembly plant in Burnaston, central England, which produces 600 vehicles per day, operates under the "just-in-time" system that relies on a smooth flow of components from the EU.

He said that China, the USA and Japan were where the firm would focus its investments.

The restructuring will also involve Honda's operations in Turkey, which now produce 38,000 Civic sedans per year.

Earlier this month, Japan's Nissan announced that it would not build a new SUV at its plant in Sunderland, England, as previously planned.

The most significant factor, however, according to Autocar at least, is believed to be Japan's recently signed trade deal with the European Union.

The EU-Japan Economic Partnership Agreement, in force since February 1, ensures that the bloc's 10 percent tariff on Japanese vehicle imports will be reduced to zero over the next 10 years. A statement issued this afternoon said: "At this point, we are not able to make any comments regarding the speculation".

As such, most of the benefits for a Japanese firm to locate its plant in the United Kingdom have now been effectively removed, leaving little reason to stay in the country on the eve of Brexit.

Honda's Swindon plant was opened almost 30 years ago and since that time has manufactured more than three million vehicles.

  • Eleanor Harrison