The UK's Forum of Private Business has welcomed Thursday's announcement that General Motors Europe's Vauxhall plant at Ellesmere Port will build the next generation Astra.

The forum’s senior policy advisor, Phil McCabe, said: “This is fantastic news for the region as well as the UK car industry as a whole. It’s not just the existing plant staff who stand to gain either, but the entire supply chain regionally in the north west and beyond, who will now be producing components for the next generation Astra – one of Europe’s best selling cars – for years to come.

“This is a keystone decision for those small businesses involved in the UK car making industry, particularly as it was looking likely until only recently that Ellesmere Port was under threat.

“Its closure would have reverberated right down the supply chain in terms of job losses so today’s marvellous news is a real cause for both relief and celebration.”

McCabe added it was a signal for further supply chain investment to allow UK firms to become more competitive. Tata Motors' Jaguar Land Rover said earlier this year it was concerned the UK supply chain was already operating at full capacity and could struggle to keep pace with demand for popular new models such as the Evoque.

“The resurgence in the UK car manufacturing industry means the auto supply chain is already near capacity, meaning further growth must come from new investment. Many of the components for the new Astra will come from abroad and, while UK suppliers will be involved, it would be preferable for our supply chain to be doing more in the interest of our economy.

“Manufacturers like being near suppliers with high logistics costs only increasing forecourt prices. So improving supply chain finance is not only sensible but vital for the sector to continue growing and creating jobs.”