Global semiconductor shortage compels Honda to halt production at UK plant

Honda will pause production at its Swindon factory next week due to a shortage of parts, as the pandemic continues to impact manufacturer supply chains. 

In a statement issued to employees seen by the Financial Times, Honda said: "Some production activities will not run Monday 18 to Thursday 21 January due to Covid-related supply issues. The situation is currently being monitored with a view to restart production on Friday 22 January.”

The plant has temporarily closed twice since the beginning of December for supply reasons, though this is the first time the pandemic, rather than delays at the port, has been cited as a factor. It is reported that the parts in question are semiconductors - a global shortage of which has already restricted production for Volkswagen, Nissan and General Motors. 

Semiconductor supply is limited because of a pandemic-induced boom in demand for consumer electronic devices that use the same materials - including smartphones, laptops and tablets - as working from home becomes more popular worldwide. Honda has cut production at several sites worldwide as a result. 

At the beginning of December, the Japanese firm told employees that congestion at UK ports was causing a "transport-related parts delay". Like most manufacturers, Honda operates a just-in-time production method, whereby parts are delivered exactly when they are required.

UK container ports, including Felixstowe, Southampton and London Gateway, were heavily congested with an increasing number of consumer orders for Christmas and companies filling lockdown-induced backlogs. It was also suggested companies were stockpiling goods before the Brexit transition period ended on 1 January.

In 2019, Honda announced it would be closing its Swindon manufacturing plant, where the Civic is currently produced, in 2021. It claimed an acceleration in electrification plans means that "resources, capabilities and production systems for electrified vehicles will be focused in regions with a high volume of customer demand".