Honda is cutting 800 jobs at its Swindon plant, just a year after creating 500 jobs and moving to a two shift operation.
“Sustained low industry demand requires us to take difficult decisions,” said Honda’s European vice president Ken Keir.
It is the first time the car manufacturer has cut jobs in Britain since it starting manufacturing in Swindon in 1992.
The car maker built 151,000 cars in 2012, a third of which were sold within the UK.
The Swindon plants have a capacity to produce 250,000 cars a year, but “sustained low demand in Europe makes it necessary to realign Honda’s business structure,” the company said in a statement.
The 800 jobs will be axed in the spring, reducing the size of the workforce by nearly 23%, from 3,500 to 2,700.
There are three plants at Honda’s site in Swindon. Plant Two, which makes the Honda Civic and Honda Jazz models, moved to a two shift production last year but this will now be scrapped. Most of the job losses will come from these operations.
Plant One, which builds the 4X4 CR-V “is doing well”, a company spokesperson told The Manufacturer, adding that “the problem in terms of model sales lies in Plant Two.”
Honda estimated six months ago that the site would return to full capacity in the next few years .
It now believes that the poor performance in the European market, where a million fewer cars were sold in 2012 than in 2011, has put the brakes on this forecast.
“We don’t see any growth in mainland Europe for four years,” a spokesperson said.
The £267m plant investment announced in 2012 will still go ahead. This will support the introduction of the new Civic Estate, which will enter production later this year.
The decline in European new car markets and uncertain growth prospects has forced a number of vehicle manufacturers to restructure their operations, including Ford, which shut the last plant making the Ford Transit in the UK in 2012.
The majority of job cuts will come from the production lines, but purchasing staff will also be axed.
“We won’t need so many jobs in purchasing with lower production levels,” said the spokesperson.
“There is no point in throwing good money after bad,” he said. “This is a response to market conditions. The whole of Europe, apart from the UK, is struggling.”