20000411

Honda to build

sports utility

vehicle in Britain

TOKYO: Japan's Honda Motor Co. Ltd. announced on Monday it would start building popular off-road vehicles in Britain under a production overhaul which it said signalled its long-term commitment to the plant.

Production of the CRV sports utility vehicle would start at the factory in Swindon, southern England, from June with annual output set at 20,000 units, said Honda spokesman Yuzuru Matsuno.

"Currently the demand in the UK market for CRVs is quite strong and we have been trying hard to keep up with the pace from Japan, but this is part of our commitment to produce locally," he said.

Production of Honda's Civic and Accord car models was being scaled back, he noted, and the CRV would take up some of the slack.

"The Civic is near the end of its lifecycle but that's not the major reason for this plan," Matsuno said.

"Last year we shipped a total of 114,000 Accords and Civics and this year we are going to produce 100,000 vehicles including some CRVs."

Honda said on April 1 that it would temporarily cut production at Swindon, which has annual capacity of 150,000 vehicles, by half owing partly to the pound's strength against other currencies.

But no job losses were planned among the 3,100 staff, it said, after Germany's BMW AG announced it was selling its loss-making British subsidiary Rover.

The Rover sale has put up to 50,000 jobs in England's West Midlands in doubt. The strength of the pound was the key reason Rover was unviable, BMW said.

Japan's biggest car company Toyota Motor Co. Ltd., also complaining about the strong pound, has meanwhile threatened to withdraw from Britain if Prime Minister Tony Blair's government stays out of the euro.

The Honda spokesman said: "Of course it is true that to some extent the strong pound is affecting our profit but this is a short-term issue and our longer-term strategy is to produce locally."

No further recruitment was planned for the CRV production as Honda is already planning to take on up to 1,000 extra workers for a second plant at Swindon, due to open in two years, Matsuno added.

"Basically we are currently introducing a new manufacturing system so (the CRV) won't need much investment." Honda sold 36,000 CRVs in Europe last year, the spokesman said.ÑAFP