As the European market shows no sign of recovery, Honda announced it will cut jobs in the UK market.

Analysts believe that Honda’s problems are not solely caused by the European car sales slump, especially since rival Nissan keeps adding production and workforce at its UK factory. It is the first time when Honda cuts jobs in the UK market since it began auto production here in 1992.

Executive vice president of Honda Europe Ken Keir said that the automaker will cut 800 jobs at the Swindon plant and that this move is of utmost importance to “meet the new reality of the car market.” He added that Honda expects sluggish European sales for the following three years, after it reported a drop of 6% for 2012 to 141,019 units and a 1.1% drop in share.

“They are still losing volume with a very young mainstream model range in the form of the Civic and the CR-V,” said IHS Automotive senior analyst Tim Urquhart. “The somewhat conservative styling of the Civic is not helping it stand out in the market or appeal to new customers.”

A former leader in the medium SUV market, the CR-V is being surpassed by cheaper rivals such as the Nissan Qashqai, which sold 218,755 units last year in Europe, compared with 37,738 CR-Vs.


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