Honda will be reducing its workforce in the United Kingdom as it sees no signs that the current vehicle sales slump in Europe will reach its end soon enough. The Japanese carmaker plans to reduce its workforce at its Swindon plant in England by 800 jobs. According to analysts, Honda’s problems go beyond the European sales slump, since fellow Japanese carmaker is boosting its workforce and production at its UK plant.
The planned job cuts will be Honda’s first in the UK since commencing production in 1992. Ken Keir, executive vice president of Honda Europe, said that the carmaker’s restructuring is essential to "meet the new reality of the car market."
Keir expected to post weak sales in Europe in the next three years. In 2012, vehicle sales in Europe dropped for the fifth consecutive year. Honda also suffered a 6-percent drop in sales in Europe to 141,019 units, forcing its share to slide to 1.1 percent, according to data from industry association ACEA.
While Honda’s decline was less than the Euroepan market's overall sales drop of 8 percent, it was a far cry from the carmaker’s peak of 311,743 sales in 2007, according to ACEA data. It was also the last year that Honda posted a profit in Europe. According to industry observers, Honda’s sales in 2012 should have received a boost from the rollout of an updated Civic compact as well as of CR-V medium SUV, both of which were produced in Swindon.
IHS Automotive senior analyst Tim Urquhart told Automotive News Europe that Honda is still losing volume with a “very young mainstream model range” in the form of the Civic and the CR-V. He noted that the “somewhat conservative” styling of the Civic is not helping the vehicle stand out in the market or appeal to new customers.