Groupe PSA is to raise manufacturing capacity and add the production of Peugeot- and Citroen-badged panel vans at Vauxhall’s Luton, UK, plant in a move that will shore up confidence in post-Brexit prospects for the UK’s automotive manufacturing sector. It will also bring to an end a technical agreement with Renault under which the plant’s Opel/Vauxhall Vivaro panel van – based on the Renault Trafic – is currently built.
Right-hand drive versions of Peugeot and Citroen panel vans will be built at the plant for the UK market, in addition to future versions of the Vivaro, a spokesman told just-auto. He added that the decision was a major vote of confidence in a UK plant and reflects its core competitive strengths.
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PSA said it will add manufacturing capacity at the Luton plant to take it to 100,000 units a year and produce a new Vivaro model in 2019. The plant made 60,000 Vivaro vans in 2017 (with around 60% exported to mainland European markets). If output targets are reached around 450 new jobs could be created.
PSA said the investment in Luton has been made possible through a performance plan negotiated with the Unite labour union and the Luton plant, ‘combined with its [Luton’s] recognised know-how in the manufacture of light commercial vehicles (LCV) and the flexibility of its existing paint shop’.
With this initiative, the EMP2 platform for vans will be localised at Luton by mid-2019, as part of the convergence on Groupe PSA technology.
PSA also said the performance plan has been facilitated by ‘both the responsible social dialogue with the Unite union guaranteeing production flexibility and the support of the United Kingdom Government and Luton Borough Council, despite Brexit uncertainties’.
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By GlobalDataThe investment in the plant will serve to optimise its manufacturing processes to ensure that work is performed to the highest standards to meet the expectations of our discerning customers. In 2017, the plant produced 60,000 Opel/Vauxhall Vivaros. The investment aims at increasing the plant’s production capacity to 100,000 vehicles per year based on Groupe PSA’s EMP2 platform.
“Performance is the trigger for sustainability and I would like to thank all stakeholders involved and underline the open mindset of our union partners, as well as that of the UK Government. 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,” said PSA chief Carlos Tavares.
“This excellent news for Luton is also a clear demonstration that our PACE! Plan is being executed across all European countries. It is also a clear recognition of the skilled people who have customer satisfaction at the core of their priorities. As we have often stated, we have our future in our own hands and we need to unleash the full potential of the employees,” said Michael Lohscheller, CEO of Opel/Vauxhall.
UK Business Secretary Greg Clark said: “Today’s decision is a vote of confidence in Vauxhall’s high skilled workforce and the UK’s world leading automotive sector. This investment in upgrading the production platform will safeguard and grow jobs, ensuring the future of the Luton plant well into the next decade and help ensure the plant is well positioned for future Vauxhall models to be made in the UK.
“We have been clear in our commitment to the automotive sector which is why, through the Industrial Strategy, we established a landmark Automotive Sector Deal that will see us working with industry to put the UK at the forefront of new technologies.”
“This announcement is great news for the UK automotive sector.”
The SMMT also welcomed the news. Mike Hawes, SMMT Chief Executive, said: “This announcement is great news for the UK automotive sector and, especially, the Luton plant. The UK continues to be a centre of excellence for vehicle production thanks to our engineering expertise, high levels of productivity and a collaborative relationship with government which has enabled us to build a robust industrial strategy and a sector deal. We will continue to work with policy makers to ensure the UK remains as competitive as possible now and in the future so we can continue to build on our long heritage in vehicle manufacturing.”
Labour union Unite’s general secretary Len McCluskey also called upon PSA to remove the “cloud hanging over the company’s Ellesmere Port plant too, which is also awaiting a new model”.
“The investment into Luton is very welcome, but we do expect to hear of similar plans for Ellesmere Port, where the workforce has been just as loyal and is just as deserving of a secure future,” he said. Carlos Tavares told a press conference that a decision on Ellesmere Port investment would have to be taken in 2020 (Astra will cease in 2023).
The current Vivaro model built at Luton was launched in 2014 and the Luton plant was awarded a ten-year contract under then owner General Motors to build the vehicle.
