Comments by Honda president Takeo Fukui reported in a British newspaper that future investment in the UK plant in Swindon is unlikely unless Britain joins the euro, have left the automaker’s local PR chief “perplexed”.
Fukui also told The Daily Telegraph that Honda had made an “error” building its car plant in Swindon.
But Honda UK press and PR head Paul Ormond told just-auto on Thursday that the comments were perplexing as Swindon was due to reach its full capacity of 250,000 cars (Civic hatchbacks and the CR-V SUV) in October and that further expansion on the 67-acre site – home to an engine plant and two car assembly plants – was not possible.
He added that Honda had invested GBP 1.5bn to date and that no further investment was planned. The automaker has just finished recruiting a further 700 production workers – taking headcount to around 5,000 – and a move from three- to four-shift working was planned by October.
However, earlier in Japan, Fukui, who is known for straight talking, told the Daily Telegraph: “The exchange rate of the pound against the euro is very difficult to forecast. Unless the UK joins the eurozone, we can’t add to [the] plant in Swindon. We’re not planning to withdraw from the UK because it is a major market, and Swindon supplies it.
He added: “Swindon is close to full operation, but we made one slight mistake: we thought the UK was in Europe. Now we find that it is reluctant to join and that has become a big problem.
“We’re not doing any lobbying on this but every time we meet officials they say there is no interest in joining for the meantime. We have to take this at face value and reconsider our strategy.”
Ormond said that Swindon had “come of age” and was now a “mother plant”, helping with the development of Honda’s Turkish factory which currently builds Civic sedans for the domestic market.
The “mother plant” concept, also used by Toyota, links an overseas plant with a Japanese parent and the mother plant helps with staff training, the introduction of new models and any ongoing production problems as they arise.
Ormind said engineers from Swindon now spend months at a time in Turkey, helping that plant move towards full automation, annual output of 100,000 units a year and exports to other markets.
Asked if he thought Fukui had a hidden agenda, Ormond said he thought it unlikely as Honda did not accept government subsidies as a pre-requisite for building plants.
“We will go along with what the British government and people decide on the euro,” he said. “It’s up to us to manage our business and work with government policy.”
Ormond added that it was likely that Fukui had acknowledged that “if he knew then what he did now Honda might have done things” [the Swindon investment] differently. The plant first built cars in 1992 but operations began in the 1980s with engines and a vehicle pre-delivery centre.
The Daily Telegraph noted that the Honda president’s comments echo the growing frustration among Japan’s industrialists over the strong pound, now trading at multi-year highs against the dollar, the Swiss franc and other currencies, although it has moved in tandem with the euro over the past three years.
According to the paper, Fukui also said he believed the hydrogen fuel cell engine would one day sweep the world’s car markets.
“Hybrid cars alone cannot deal with global warming. The ultimate solution is the fuel cell but our engineers are struggling with this technical challenge and a breakthrough is not going to be easy,” he told the paper.
“At the moment it uses a massive amount of precious metal [platinum] and I don’t think it’s realistic for the next 10 years.”
Fukui reportedly said the technology would not be viable until consumers could re-supply the fuel cells at home from solar batteries that are carbon neutral.
Honda sells a natural gas-fuelled Civic in the US and offers a home refuelling device that allows owners to refill the car from their domestic gas supply.