The Japan News by The Yomiuri Shimbun
Honda announces U.K. exit
With Britain’s exit from the European Union looming, an increasing number of companies are leaving or reconsidering their positions in the country.
Honda Motor Co.’s Feb. 19 announcement that it would close a factory in Britain in 2021 sent shockwaves through the country. There are now less than 40 days until Brexit on March 29.
The embattled administration of British Prime Minister Theresa May is facing growing uncertainty over the future of the British economy.
In a press conference on Feb. 19, Honda President Takahiro Hachigo emphasized that the company was ending production in Britain after more than 25 years — it has been there since 1992 — as part of the restructuring of its production system, and not because Britain is leaving the EU.
Nevertheless, if Britain leaves the union without an agreement, a socalled no-deal Brexit, automobiles exported to the EU would be subject to a 10 percent tariff.
The economic partnership agreement between Japan and the EU that went into effect Feb. 1 states that tariffs on Japanese exports to the EU will be reduced to zero in the accord’s eighth year.
In the press conference, Hachigo cited Japan’s “increasing competitive edge,” suggesting the effects of tariffs were a consideration.
Nissan Motor Co. announced Feb. 3 it was scrapping plans to manufacture a new sport-utility vehicle at a factory in central Britain.Toyota Motor Corp. has said it is considering temporarily halting production in the event of a no-deal Brexit.
Britain has made efforts to bring automobile manufacturing to its shores since the administration of Prime Minister Margaret Thatcher in the 1980s.
There are now more than 2,500 parts makers in the country, with the auto industry and related fields providing about 800,000 jobs.
Withdrawals or production stoppages by Japanese companies would have a major impact on the British economy. British Secretary of State for Business, Energy and Industrial Strategy Greg Clark called Honda’s decision a “devastating blow” that was “deeply disappointing.”