As the clock ticks down on Britain’s departure from the EU with no deal in sight, the country’s car industry is braced for its biggest blow in more than a decade with the closure of a major automobile plant.
The decision by Honda to shut its Swindon factory by 2022, expected to be confirmed as early as Tuesday, throws into doubt 3,500 direct jobs, at a site responsible for about one in every 10 cars made in the UK last year.
Thousands more jobs are at risk in the supply chain and associated businesses.
“It’s a big shock,” said David Bailey, a professor of industrial strategy at Aston University. “But it’s not a surprise. Many of us have been warning for several years of the risks to UK automotive over Brexit, that we needed to nail down the uncertainty as soon as possible.”
The impending closure also calls into question the government’s attempts to forge an industrial strategy based around high-value manufacturing to boost productivity.
It comes as investment into the car sector has plummeted, despite the need for greater expenditure into electrification and driverless technologies that are set to transform the industry.
Levels were down by almost 50 per cent last year to £588m, according to the Society of Motor Manufacturers and Traders, a trade body, which said that manufacturers “sat on their hands” ahead of the UK’s departure from the EU.
At the same time, production dropped to its lowest level in five years, with 1.52m cars made in UK factories in 2018. Output in December 2018 was 78,106 cars, a drop of 22 per cent compared with 12 months earlier.
Honda said on Monday it was “not able to make any comments regarding speculation” after the matter was first reported by Sky News.
The Vauxhall plant in Ellesmere Port in Cheshire, which produces the Astra model, has long been viewed as vulnerable and its French owner PSA Group has said it will make a decision on its future in 2020.
Toyota has warned that its Burnaston site in Derbyshire, which employs 2,500, could close temporarily if Britain leaves the EU without a deal because it would be unable to source the parts needed to build its cars.