HONDA is planning to cut 800 jobs at its Swindon plant, blaming weak demand across Europe.
The Japanese carmaker, which began manufacturing there in 1992, has been hard hit by the eurozone crisis. The Swindon plant, which produces the Civic, Jazz and CR-V models, employs 3500 people, having added 500 to the workforce a year ago.
Honda has begun a 90-day consultation period on the job cuts and says it hopes to avoid compulsory redundancies.
"Sustained conditions of low demand in European markets make it necessary to realign Honda's business structure," the company said in a statement.
It added the demand for cars in Europe had fallen by one million in the past year. But Honda said it was still committed to manufacturing in the UK and Europe in the long-term.
The Swindon plants built 166,000 cars in 2012, which was well below the capacity of 250,000.
It was a big jump from 2011 when 97,000 were produced, but still significantly down from the 230,000 made in 2008. In a statement, industry group the Society of Motor Manufacturers and Traders said it was very disappointing news.
"Despite challenges brought by weak European demand, the longer-term prospects for the UK automotive sector remain good," SMMT chief executive Paul Everitt said.
"We hope that those affected will be able to take advantage of the opportunities we know exist throughout the UK sector and its supply chain." SMMT figures from earlier in the week showed that UK new car registrations rose by 5.3 per cent in 2012 to 2,044,609 cars, which was the highest number since 2008.
Its figures showed 54,208 Hondas were registered in the UK last year, up 7.2 per cent from 2011. About 40 per cent of the cars produced in Swindon are sold in the UK. Business secretary Vince Cable visited Honda in September last year to welcome its £267m ($F430.7m) investment in the UK.
"This Honda story is part of a much bigger picture of optimism, of feeling that Britain is a really good place to manufacture and make cars," he said at the time.