Honda announces 41% profits drop, cuts production

Japanese car giant Honda announced today it would slash its British vehicle production by 10% because of faltering demand, but said workers’ jobs were safe.

Honda's announcement came shortly before the company reported a 41% drop in second-quarter profits.

Honda, Japan’s second-biggest car maker, will cut output by 22,000 units of a popular Civic model at its factory in Swindon, Wiltshire in England, for four months from December.

“The economy is slowing in Europe and we have to adjust our production in line with sluggish demand there,” said Honda spokeswoman Akemi Ando.

The factory’s 4,800 workers would not lose their jobs over the production cut, she said.

Honda had planned to make 228,000 vehicles a year at the Swindon plant.

The vehicles made there are mostly sold in Britain, but some are shipped to Italy, Germany and Spain, Ms Ando said. Honda also makes the CRV sport-utility-vehicle in Britain.

Facing a prolonged slump in global demand, Japanese car makers are cutting back their output.

Nissan said last week it would slash production at its two domestic plants and was laying off 1,680 workers in Spain because of weak demand.