PSA Group has announced a major investment in the Vauxhall plant in Luton to produce the next Vivaro van, set to launch in 2019.
The move effectively secures the future of the plant and its 1400 employees for at least the next 10 years, and has been welcomed by unions and the British Government.
Fears for the future of both the Luton plant and the Vauxhall car factory at Ellesmere Port in Merseyside had been sparked in 2017 when PSA Group, parent company of Peugeot and Citroën, bought the Vauxhall Opel Group from US giant General Motors.
Peugeot had previously withdrawn from manufacturing in the UK, closing its plant at Ryton near Coventry in 2006. Plants in Germany and Poland were also thought to be in the running for the new van programme.
Luton won the deal, however, partly due to the expense of setting up new paint shops at the other potential sites. Now PSA intends to increase production at the UK facility from the current 60,000 vehicles a year to 100,000.
The new Vivaro will be built on the PSA Group’s EMP2 platform that will also underpin the next Peugeot Expert and Citroën Dispatch models. In fact, some of the French-badged vehicles could be built on the UK line.
The current Vivaro is built in a joint programme with prime PSA rival Renault, and it is understood that the new deal will see an end to this programme.
More efficiencies needed
The level of investment by PSA is thought to be in excess of £100m with the UK Government contributing at least £9m.
Business Secretary Greg Clark has welcomed the deal. “Today’s decision is a vote of confidence in Vauxhall’s high-skilled workforce and the UK’s world-leading automotive sector,” he said.
However, when announcing the deal, PSA head Carlos Tavares warned that while the Luton plant had cut manufacturing costs by 17% in a year, it still needs to find another 20% to bring it into line with plants in mainland Europe.
“This is a major milestone for the future of the Luton plant and a key enabler to serve our ambitions in the commercial vehicle market, guaranteeing customers the best offering in this segment,” Tavares said.
The future of the Ellesmere Port plant, that currently builds the Astra, is likely to be announced by 2020.