Future of one of two Vauxhall plants in UK secured

Vauxhall Vivaro

A Vauxhall Vivaro on the line at the Luton plant

Under its new owner, PSA Group, Vauxhall’s Luton plant will flourish thanks to increased production of a new Vivaro van

The next Vauxhall Vivaro van will be built at the car maker’s Luton plant, essentially confirming the future of the factory for another generation.

Since PSA Group, which also owns Citroen, DS and Peugeot, bought Vauxhall and Opel from General Motors last year, there has been a huge question mark over the future of Vauxhall’s Luton and Ellesmore Port plants in the UK, which build the Vivaro and Astra respectively.

PSA chairman Carlos Tavares says the firm has now reached a deal with the Unite trade union and Luton Borough Council over the future of the plant. The group will invest in the site to increase production capacity to around 100,000 vehicles per year. The plant produced 60,000 Vauxhall/Opel Vivaro vans in 2017. The PSA release noted the deal had been reached «despite Brexit uncertainties».

«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,» said Tavares. «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 the segment.»

The Vivaro has been built in Luton since 2001. It has been a sales success for Vauxhall and Opel, with a record 15,587 sold in Europe last year – up from 12,376 in 2016. The Vivaro shares a platform with the Renault Trafic as part of a joint venture. Today’s announcement ends that deal, with Tavares understood to be keen to cut ties with its rival French car maker.

Instead, the new Vivaro, to be built at the plant from 2019, will use the same EMP2 PSA Group platform which is used on rival vans, the Citroen Dispatch and Peugeot Expert. PSA sold 476,500 light commercial vehicles in 2017, a figure that rises to 658,000 when passenger car derivatives (such as the Peugeot Traveller) are included.

The PSA announcement states that EMP2 production will be localised by mid-2019, using both the Luton site and the PSA facility at Hordain in France. That suggests that right-hand-drive versions of the Citroen Dispatch and Peugeot Expert could eventually be built in Luton alongside the Vivaro.

Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy, also attended the announcement, in which it was revealed that the Government was contributing financially to the plant’s growth. It is an important investment for the Government demonstrating its commitment to UK manufacturing in the wake of Brexit.

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.»

The confirmation of the new model will also be a boon for the Government amid concerns that car makers may cut jobs and move production away from the UK as it leaves the EU.

Today’s news ends concerns about its Luton plant, but the efficiency of Ellesmere Port remains in doubt. While Luton has proved itself to be efficient enough for PSA’s factory empire, Ellesmere Port is understood to be trying to reduce its manufacturing costs for the Astra so it can prove its case when the next generation of the compact model is due early next decade.

Only last month, PSA boss Carlos Tavares said Ellesmore Port must close the cost and quality gap between it and its European equivalents to survive.

PSA’s £1.9bn buyout of General Motor’s Opel/Vauxhall subsidiary and GM Financial’s European operation, valued at £1.2bn and £800m respectively, was completed last summer. The move made PSA the second biggest-selling car group in Europe after Volkswagen. Enlarged PSA now has a 17% share of the European market.

Vauxhall was founded in the London borough it took its name from in 1857, and built its first car in 1903. Production moved to Luton in 1905, and the company has had a production facility at the site ever since. Car production ceased at the site in 2002.

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Source:: Autocar