7:58 am, August 25, 2022
Honda is considering reducing its reliance on Chinese labour by building a whole new supply chain outside of the country, it has been reported.
The firm currently runs an extensive network of production sites in the country with 40 per cent of its cars being built there in the last financial year.
However, the pandemic and various local lockdowns have resulted in mammoth delays in the supply chain, not helped by the ongoing semiconductor shortage.
It has resulted in a shortage of vehicles being shipped around the world, sparking concern among Honda’s top bosses.
As a result, Japanese news outlet Sankei is reporting that the carmaker is now considering drastic action.
It is reported that Honda would keep its Chinese operations in business for the domestic market but international production, including for the UK, would take place elsewhere.
There are also concerns among some at the company about increased tensions between China and the US.
In response to the reports, a Honda spokesperson said: ‘The review of the supply chain from China and risk hedging are elements that need to be considered, but it is not quite the same as the objective of decoupling.’
The news comes just over a year after Honda closed its production plant in Swindon after 36 years.
The site produced around 160,000 cars a year, including the Civic, which were shipped around the world.
However, a return to the UK is thought to be incredibly unlikely at this stage, with the site now under the ownership of American logistics company Panattoni, which has plans for a £700m investment.
It is thought that any new supply chain would most likely be set up in Honda’s home nation of Japan, where there are government incentives to bring production to the country.
