Honda has reduced the problem of drastic undercapacity at its factory in Swindon, England, by inviting suppliers to utilize the empty space.
Honda has been building cars in Swindon since 1992, and in 2001 it responded to rising demand for its models by building a second plant to lift capacity by 100,000 units to 250,000 cars.
But the Japanese automaker was hit hard by the European economic slump and production fell to just 119,995 last year from 230,423 in 2008.
Last year Honda mothballed Car Plant 2, including its body and paint shops. The company moved production of its Civic compact hatchback to a single assembly line in Car Plant 1 where the CR-V crossover and Jazz subcompact are built.
The shutdown has been made less painful by installing suppliers into the space to bring them closer to production.
Japanese brake-pipe maker Sanoh now bends its pipes in the Honda plant instead of having to transport the awkwardly shaped items from their UK manufacturing center much further away.
Honda has committed to its UK plant by making it the global center for production of the next Civic five-door hatchback and exporting it from Swindon outside Europe to markets including the United States for the first time.
This will double sales of Civics made in the plant, Honda predicts, but at the end of 2016 production of the CR-V for Europe will be transferred to Canada. The new Jazz, which launches in the summer, will be built in Japan instead of Swindon.
Honda estimates that annual production of the Civic hatchback will be about 120,000. However if demand ends up exceeding the 150,000 capacity of Car Plant 1, then Car Plant 2 could be pressed into service again. “It’s our dream scenario,” a spokesman told me.