Honda Investment Attests To Production Potential
Japanese auto manufacturer Honda has announced that it is to almost double output at its UK plant in Swindon, following an investment of GBP267mn (US$424.7mn). In 2012, the facility is expected to produce 183,000 units, with the company estimating production will rise to 250,000 units within three years. This attests to BMI's increasingly bullish view on vehicle manufacturing the country, predicated on the strength of both exports and domestic sales.
This latest investment comes on the back of a number of other considerable investments in the UK from auto manufacturers, including contracts to build new models and improve facilities. Nissan has confirmed production of two new models at its Sunderland plant, and Jaguar Land Rover (JLR) has announced it will be hiring another 1,000 people at its Halewood plant.
Indeed, in the first half of 2012, passenger car production in the UK increased 14.1% y-o-y. BMI has maintained a bullish outlook on vehicle production in the UK for 2012, and we have revised our passenger production forecasts upwards to 14% growth in 2012 ( see our online service, July 23, 'Continued Strength In Production Fuelled By Exports').
|Continued Strength In Production|
|Vehicle Production, CBUs|
Honda's Swindon site currently employs some 3,500 workers, and builds cars and engines for use domestically, which accounts for some 40% of output, and exports to over 60 countries in Europe, the Middle East, Africa, and Australia.
Indeed, many auto manufacturers invest in the UK as an export base; in the first six months of 2012, 82.7% of vehicles produced in the UK were for export. For the year 2011, this figure stood at 83.7%. This again confirms the strength of the production sector, as strong sales growth in non-European Union countries drives demand for UK-built vehicles ( see our online service, May 17, 'UK Runs Car Trade Surplus With Strong Foreign Demand').