Honda set to announce withdrawal from UK ahead of Brexit

A number of companies will relocate their production as the UK approaches Brexit deadline

Japanese carmaker Honda car factory closure result in 3,500 job losses. AP.

Honda is set to become the latest international company to pull out of the UK ahead of Brexit as it announced the closure of a car plant in southwest England that will cut around 3,500 jobs.

The Japanese giant has yet to make a formal announcement but British national officer for the Unite trade union, Des Quin,n told local media the move would have a "grave" impact on workers and their families and would "affect thousands of jobs in the extensive supply chain across the country".

A spokesperson for prime minister Theresa May said no comment will be issued before the announcement is official.

The Japanese company made 160,000 Honda Civics in Swindon last year, of which some 90 per cent were exported to the EU. The imposition of new tariffs after Britain leaves the EU is deemed to be one of the considerations behind the decision.

Another factor could be a recently struck EU-Japan trade deal that lowers tariffs on both parties' car exports to zero.

Japanese carmaker Nissan also cited Brexit as one of the reason for cancelling plans to build its X-Trail SUV in Sunderland earlier this month.

A number of companies have recently announced they would relocate their production outside Britain as March 29 – the deadline for its exit from the EU bloc – looms closer.

According to the Society of Motor Manufacturers and Traders (SMMT), the UK’s industry trade body, investment in the car industry plunged by almost half.

UK production for its domestic market and exports to international markets fell by 16.3 per cent and 7.3 per cent in 2018.

Car industry chief Mike Hawes warned that the impact of Brexit on investment and output “is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely”.

“With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert," he said.

Mr Hawes urged British politicians to avoid a no-deal scenario.