Magazine article Marketing

Automotive: Honda Stalls in Europe

Magazine article Marketing

Automotive: Honda Stalls in Europe

Article excerpt

The Japanese car-maker's Swindon plant has been hit hard by weak demand, writes Kim Benjamin.

Honda has not had a good start to 2013. A slump in demand across Europe has forced the Japanese car manufacturer to slash the workforce at its Swindon plant by 25%.

The company, which is known for producing some of the most reliable vehicles on the roads, had never previously cut jobs in the UK. It said the cull of 800 jobs had been prompted by a slump in demand in Spain, Italy and Greece, in particular. European sales of its vehicles fell by 1m over the past year.

Just over a year ago, Honda had recruited 500 extra staff at the Swindon plant as part of ambitious expansion plans, bringing the total workforce to 3500. It also announced a pounds 267m investment in September, the biggest such programme at the site in more than a decade, amid plans to step up production to support the introduction of Honda's latest Civic and CR-V models. Yet in 2012, it produced only 166,000 vehicles, even though the plant has capacity for 250,000. While this is more than the 97,000 built in 2011, numbers are still significantly down on the 230,000 that were manufactured there in 2008.

Despite these job cuts and wider fears about the stability of the European car market, Honda says it is committed to building cars in Swindon for the foreseeable future.

How can the brand revive its fortunes? We asked Peter Duffy, marketing director at easyJet and a former marketing director at Audi UK, and Ben Walker, executive creative director at Crispin Porter & Bogusky London, who previously worked as creative director at Wieden & Kennedy, which holds the Honda advertising account.

HONDA STATS

1992 - The year Honda started building cars in the UK

40% of cars made at its Swindon plant are sold in the UK

Source: Honda

DIAGNOSIS

Two industry experts on how Honda can put its European business back into top gear

PETER DUFFY, Marketing director, easyJet, (and former marketing director at Audi UK)

One of the significant issues faced by the volume car market is that despite five years of tough trading, no significant manufacturer has gone bust. …

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