TOKYO – Honda Motor Co. will shutter assembly plants in England and Turkey by 2021 as the automaker pushes toward electrification and confronts changing trends in trade relations.
The global restructuring move comes amid uncertainty about Britain’s so-called Brexit withdrawal from the European Union and the implementation of a new free trade pact between Europe and Japan.
Honda CEO Takahiro Hachigo announced the move Tuesday at the company’s global headquarters in Tokyo.
The production overhaul has nothing to do with Brexit and the decision was timed was planned to coincide with the end of the current Civic's lifecycle, Hachigo said. It is part of a wider adjustment of Honda’s global production base to improve efficiency and better tailor product to local markets, he said.
"We have decided 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. "We have made this announcement today due to the timing for deciding on a production base for the next Civic. So, this decision has nothing to do with the Brexit."
Honda has global production capacity for 5.4 million vehicles, but it sold only 5.24 million vehicles last year, giving it a utilization rate around 97 percent. After the changes, Honda’s global capacity will be trimmed to 5.1 million vehicles and the utilization rate will exceed 100 percent through overtime, Hachigo said.
Honda's Europe boss, Ian Howells, said the automaker will focus its investments on China, the U.S. and Japan. "This is not a Brexit-related issue for us. This decision has been made on the basis of global changes," Howells told BBC Radio.