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Honda stands firm on UK production despite pound

New corporate headquarters just off the M4 symbolises Honda's commitment to the UK as Ford prepares to end Dagenham car production.

Its investment in Britain so far totals £1.15bn which was why Trade and Industry Secretary Stephen Byers performed the official opening.

A few hours later production of the CR-V began at Honda's plant in Swindon - a statement of the manufacturer's confidence and independence. Honda last month firmly discounted the notion that it might reactivate an association with its former partner Rover, now run by Phoenix.

About 40 miles east of Swindon along the M4 corridor, Honda's new HQ in Langley, Berkshire, houses Honda UK, Honda Motor Europe and Honda Finance Europe. The multi-million pound site contains a purpose-built two-wing four-storey, 81,000sq.ft. building, which accommodates 475 staff covering Honda's three manufacturing divisions: bikes, power equipment and cars.

Mr Byers said: “This is a major expansion for Honda and emphasises the company's total commitment to the UK. We are aware of the difficulties experienced by other manufacturers in the UK but Honda's decision to expand and invest highlights how much it values Britain. Honda's move is a positive one which more companies should be taking serious note of.”

Minoru Harada, Honda Motor Europe president, said: “While other manufacturers are cutting back both investment and production, Honda is expanding its foothold in Britain. We have added production of CR-V to the 4/5dr Accord, Civic and Aero Deck already built at Swindon. This confirms our positive long-term approach to Europe and specifically the UK.”

Ken Keir, Honda UK managing director, predicted Honda's total UK sales would rise from 70,000 in 1999 to 80,000 next year and 90,000 in 2002. Part of the projected growth will come from CR-V's inclusion on corporate fleet lists because the car is built in the UK.

Mr Keir confirmed the UK content of Accord and Civic would fall from 70% to nearer 50% as Honda strove to reduce the £85m loss in Europe last year. Imports from elsewhere in the EU will rise.

By September Honda intends to source 45% of parts and components from within Europe. The strength of the pound has been blamed for the current UK input cutback but Mr Keir rejected any thoughts that such problems would handicap Honda's growth in the UK. “Unlike other manufacturers, we are here for the long-term,” he said.

“Of course being in a stable environment of exchange rate, such as the euro, with mainland Europe would be of great benefit to us, as it would be for any international company, but we are a major global manufacturer building cars in 34 countries.

“We live with exchange fluctuations every day and we know the financial market is cyclical. Over time, rates will equalise in the UK's favour.”



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