The demise of the Japanese cars being made in the UK

Over the last few months, we have seen Nisson and now Honda pull out of making cars in the UK. Remainers not wanting to leave the EU have been quick to blame Brexit.

However, nothing can be further from the truth of the matter. There reasons why they are pulling out and both are to do with the EU and the market for cars and not Brexit.

The Japanese firm has been building cars and engines at the plant since 1989, and as recently as last autumn the firm said it was committed to production there, regardless of the outcome of Brexit negotiations. You have to consider the decline in demand for diesel too. Honda’s Swindon engine plant produced diesel engines. Then there’s the ever-growing rise in popularity of SUVs, which is harming sales of traditional cars such as the Civic — the only model made in Swindon.

And you can’t ignore global trade, such as Donald Trump’s threat to impose huge tariffs on cars imported from Europe into the US — such as the Civic. At the same time, the European Union and Japan recently agreed on a trade deal that effectively removes tariffs on Japanese-built cars imported into Europe. That reduces Honda’s need to have a European manufacturing base. There’s also Honda itself. The firm continues to struggle in Europe, with sales markedly down on a decade ago. Last year it sold just under 135,000 cars in the European market, a three percent decline on 2017 — and around half its sales of a decade ago.

As a result, it has increasingly focused production in its home country in Japan, at the expense of factories elsewhere. The Swindon factory produced around 160,000 Civic models last year, but at its peak ten years ago its output was around 250,000. This is the latest in a pattern of decline.

All those factors — and more — will have played a role in Honda’s decision. So while it’s important the UK car industry takes every lesson from this latest blow, it’s important to remember this news reflects the wider struggles of the global car industry.

What is also clear is that it's NOT Brexit as Remainers would have you all believe