Honda said it had “no plans for now” to withdraw from the UK market after the British government said it was seeking a deal to shield the car manufacturing industry from the fallout of the British exit from the EU.
The comments by Japan’s third-largest carmaker came after Greg Clark, the UK business secretary, said on Sunday that assurances given to rival Nissan — which led to its decision last week to invest in Sunderland — were extended to other car groups with plants in the country.
“We want to continue our business in the UK for now,” Seiji Kuraishi, Honda’s executive vice-president, said on Monday, adding that a formal decision would come later.
Mr Kuraishi declined to comment on whether carmaker had received assurances on tariff-free access to Europe, only adding that the company had not asked for any special treatment from the UK government: “Our communication [with the government] has improved significantly.”
Honda had already been scaling back its struggling UK operation, but it announced a strategic shift last year by making its Swindon factory the global hub to export its new five-door version of the Civic hatchback.
Its commitment to the UK market came on the same day the company raised its full-year net profit guidance 6.4 per cent, bucking the stronger yen headwinds with cost cuts and robust car sales in China.
For the full fiscal year through March 2017, the company anticipates a net profit of ¥415bn ($4bn), compared with its earlier forecast for ¥390bn.
However, the carmaker lowered its annual revenue forecast 2.5 per cent to ¥13.4tn, blaming the stronger yen for eroding the value of earnings repatriated from sales abroad.
The carmaker now assumes an average ¥100 against the US dollar for the fiscal second-half, compared with ¥105 for the fiscal first-half and ¥120 in the previous fiscal year.
Despite a robust second quarter, the revised profit target still missed analysts’ forecasts as the carmaker cited currency volatility and market uncertainty in the US, Europe and Thailand for its conservative guidance.
For the July to September quarter, Honda reported a 39 per cent rise in net profit to ¥177bn, boosted also by a cut in quality-related costs. In the past two fiscal years, Honda has set aside ¥556bn for recalls of Takata-made airbags fitted in its vehicles.
Some of the inflators Takata manufactured for these airbags have exploded and sprayed shrapnel at passengers. The episodes have been linked to at least 17 deaths and more than 100 injuries worldwide.
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