Welsh manufacturers could be severely impacted by Honda's decision to close its factory in Swindon.

The Japanese firm told workers it proposed to shut the vehicle manufacturing plantin 2021 resulting in the loss of 3,500 jobs. The plant currently produces 150,000 cars a year.

In Wales, there are 150 companies in the automotive supply chain and the Welsh Government have confirmed the decision could "impact" several companies.

The Minister of Economy and Transport, Ken Skates said on Tuesday: "We are aware of a number of companies within the supply chain in Wales that could be impacted by Honda's decision. We are working with the Wales Automotive Forum in assessing the implications. There are 150 companies in Wales in the automotive sector and we are doing all we can to invest in them to make sure they're future proof."

The plant currently produces 150,000 cars a year. Credit: PA

A statement by car manufactures Honda said: "This proposal comes as Honda accelerates its commitment to electrified cars, in response to the unprecedented changes in the global automotive industry."The significant challenges of electrification will see Honda revise its global manufacturing operations, and focus activity in regions where it expects to have high production volumes."

Honda said under the proposed restructure, the current role of its UK manufacturing business (HUM) as a global manufacturing hub may no longer be viable.

John Dobbs Managing director of Flowtech Precision in Clydach said:"The cars produced in Swindon are exported to America not the EU so we thought we were in a better position. Honda's decision will affect us, it's a challenge we could do without but we will cope.He said the company has worked hard to diversify the business in the last few years to be less exposed. It is not solely reliant on the automotive sector so it's in a better position to deal with the challenge than a few years ago."

He added:"The trade deal the EU has secured with Japan is a factor and Brexit uncertainty for us around tariffs isn't helping. "

This is also against a backdrop of thousands of job losses at Jaguar Landrover and 400 posts going at Ford in Bridgend.

Honda's decision will be a setback for Kasai in Merthyr which car supplies parts to both JLR and Honda. It employs 200 people and now its two main customers for its boot linings and door trims are closing or cutting back.