By on September 6, 2012

Auto makers in Europe are freaking out about excess capacity, but Honda can’t get enough of it.

With a $424.9 million investment in its Swindon, England plant, Honda is doubling down on European production, and for good reason. A report by Reuters claims that 40 percent of Honda’s sales in Europe are imports, and that means exchange rates are playing havoc with profitability.

The wire service also mentions that Honda is looking for a big push in localized manufacturing

“Honda, which has seen three straight year of losses in Europe, aims to be profitable in Europe in 2013/14, when 80 percent of cars sold in the market will be sourced from the Swindon plant.”

According to the article, Britain is now a net exporter of vehicles for the first time since 1976, and Honda says that 60 percent of Swindon production will be exported. Currently, the Civic, CR-V and Jazz (our Fit) are built at the plant.

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6 Comments on “Meanwhile In Europe, Honda Can’t Get Enough Capacity...”

  • avatar
    schmitt trigger

    Just wondering…
    Wouldn’t it be also wise for Honda to build a plant in an Euro-denominated country, to hedge against future Pound Sterling gains?

    • 0 avatar

      Problem with that Schmitt Trigger is labor quality and labor laws; Labor quality in France sucks and Labor laws are the worst in the world, plus the UK is far more competitive than southern Euro countries. Placing a plant in Germany would not suit the Germans either, they are not big fans of Asian vehicles.

      Belgium could be a contender, but as Renault learned to its chagrin, their workers can be a problem and again, their labor laws don’t help.

      • 0 avatar
        schmitt trigger

        Fully agree with the stifling labor laws in most of Western Europe.

        I was thinking more along the lines of former East-Europe countries that are now part of the Euro block: Lithuania, Slovakia, that kind of thing.

    • 0 avatar

      Honda has historic ties to the UK, when they owned a part of Rover, until it was sold to BWM. Towards the end, some of the Rovers were essentially re-badged Honda’s.

  • avatar

    GM should GIVE the Opel plant to Honda and solve 2 companies’ problems at one time.

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