Unions reportedly are seeking urgent talks with PSA Peugeot Citroen after it announced it would cut 850 jobs at its UK plant in Ryton, near Coventry.

According to the BBC, the firm blamed increasing competition in the small car sector for a fall in sales of its 206 model.

Trade unions have vowed to oppose compulsory redundancies at Ryton, which employs about 2,800 workers, the report said, adding that Peugeot's decision is the latest blow to Coventry's car industry after Jaguar decided last year to shut production at Brown's Lane this year.

Peugeot reportedly said it would reduce work at the plant from three shifts a day to two in the summer and hoped to cut jobs through voluntary redundancies, early retirement and redeployment of staff at other company sites.

"Despite the Peugeot 206 continuing to be one of the best-selling retail cars in Europe, the small car segment has seen a considerable broadening of the product offering," the company told the BBC, adding: "This has impacted on the sales volumes of the Peugeot 206."

A spokeswoman for the Transport and General Workers' Union (TGWU) told the broadcaster: "While the job losses are bad enough, the concerning issue is Peugeot's failure to highlight a new model for the 206. We are, therefore, looking to talk as a matter of urgency to the chairman of the company and trade secretary Patricia Hewitt to resolve this and secure a long-term future for the plant."

Dave Osborne, national officer of the TGWU, told the BBC: "It is a double blow following a cutback last year from four to three shifts. We will oppose any attempt to make compulsory redundancies."

In a statement, the Amicus unions said: "This is more devastating news for Coventry where nearly 1,400 car manufacturing jobs have been lost in the past year. We have asked for an urgent meeting with the company to discuss terms but we will not accept anything less than the very best packages for our members and no compulsory redundancies.

"Peugeot is cutting production of the 206 by a similar amount at their plants in France but no jobs are being shed there. UK manufacturing must have employment protection on a par with that in the rest of Europe if workers here are to stop being the easy touch they are now when it comes to job cuts."

The BBC said Peugeot pledged that Ryton would play "a key role in the company's manufacturing strategy as it will become the main European production site for the car for several years to come".

However, Professor Garel Rhys, a specialist on the UK automotive industry at Cardiff Business School, told the BBC that the Ryton plant's reliance on the ageing 206 may pose a risk for its future.

"Ryton does need another product," he told BBC Radio, pointing to a decline in the small car market as smaller models of people carriers [Europe's small minivans] have become more popular.

The BBC said news of the job cuts is the latest blow to Coventry's once-thriving car industry.

The broadcaster noted that Jaguar's decision to move work from Brown's Lane in Coventry to the Castle Bromwich plant in Birmingham will lead to 400 voluntary redundancies and there are also rumours of possible job cuts at another West Midlands car maker, MG Rover, which is seeking investment from a Chinese car firm, Shanghai Automotive Industries Corp, to help develop new models [and may move some production to China].

Ryton looks safe for now

Reduced role for Ryton