Honda is to invest £200m upgrading its giant Swindon plant to make it the global manufacturing centre for the next-generation Civic.
Today’s announcement appears to secure the future of the plant, which has been hit by job losses and production cut backs over the past few years. Production of the new five-door Civic is due to start in the summer of next year. 
Just over a year ago Honda announced plans to axe nearly 500 jobs at the South Marston plant, close one of its two production lines and reduce daily shifts from three to two as European sales continued to struggle. That blow came a year after nearly 600 jobs were axed as the plant struggled against the global car sales downturn.
Hundreds of jobs were also shed from the plant in the previous years – partly as a result of a shortage of parts following the Japanese earthquake – taking the workforce to below 3,000 for the first time in a decade. Honda’s importance to Swindon’s economy was reflected by a further wave of job losses in supplier firms in the town.
While the site has the capacity to produce 250,000 cars a year, it built less than half that number last year. In 2008 it produced 230,000 vehicles. Around 90% of Honda Swindon’s output goes to the European market and while the UK car market has recovered over recent years, sales on the continent have continued to go into reverse.
Honda – which operates the plant through its Honda of the UK Manufacturing (HUM) subsidiary – said the investment announced this morning will safeguard the jobs of the 3,100 plant workers rather than create new employment. It is unclear whether the mothballed production line will be reopened.
HUM director Jason Smith said: “By establishing HUM as a global production facility for the Civic five door, Honda, is demonstrating its long-term commitment to manufacturing in the UK and Europe.
“This is incredibly important for HUM and is a reward for the commitment and effort put in by Honda associates (employees) in recent years.
“As a global production facility for the Civic five-door model we look forward to making the most of the opportunity to export this model not only to our European customers, but also to key global markets.”
Honda expects to sell about half of the new Civics in Europe, with the rest shipped to other markets with a growing appetite for hatchback cars.
President of Honda Motor Europe Toshiaki Mikoshiba added: “This announcement sends a clear message to our associates and suppliers of the strategic importance that Honda Motor Company places on producing cars at our plant in Swindon.
“We will continue to provide high quality products to meet the expectations of our European customers and having just unveiled four new models for the European market, we look forward with renewed optimism and purpose for Honda in Europe.”
Last year Swindon Business News revealed that Honda would bring out a new five-door version of its Swindon-built Civic model this year – a car which has become the South Marston plant’s flagship model since production started in 1994 for the European market. The model has been produced by Honda at various plants around the world since 1992 and is now in its ninth generation.
Production of Honda’s CR-V compact SUV (sports utility vehicle) will be transfered from Swindon to its plant in Ontario, Canada, meaning Swindon will become a one-model plant.
Swindon production of the Jazz supermini ended last year and it is now manufactured in Japan. Honda has a highly-flexible and sophisticated global production system which is far superior to many of its rivals and means it can switch production of models between plants with minimum disruption and investment.
It uses this system to smooth out peaks and troughs in production caused by fluctuating sales in certain markets.
The plant also produces engines for its made-in-Swindon cars. Around 500 people work on engine production, producing petrol and diesel engines in a three-shift pattern.
Honda has invested a total of £2.2bn in the 370-acre site, which began life as a pre-delivery inspection site for imported cars in the 1985. Engine production at South Marston started in 1989 with full car assembly starting three years later. A second car production line was added in 2001.
Ian Larrard, director of the Swindon and Wiltshire Initiative, part of Business West, welcomed the investment, describing it as “a huge boost for the local area” which built on the increase in business confidence the organisation was seeing in Swindon.
“The new plans to develop the next generation of the Civic model that will be distributed globally will only improve our international profile and stimulate future growth,” he said. “Honda has invested some £2.2bn in the Swindon plant over the last 20 years and its continued support is vital to our long-term prosperity.”
Honda’s investment in Swindon is the latest good news for the UK car industry – in the past six days more than £1bn has been pledged to three projects, including £600m by Jaguar Land Rover in its West Midlands operations and £250m by the London Taxi Company for a new range of ultra low emission taxis to be built in Coventry.
Mike Hawes, chief executive of industry group SMMT, said today: “It has been a fantastic week for UK automotive, with more than £1bn earmarked by vehicle manufacturers for new model production that will drive further growth for the sector.
“Honda’s decision to build its next generation Honda Civic, a global car in an important and growing segment, here in the UK caps off a record six days – the first time three manufacturers have announced nine-figure investments over such a short period of time.”
