Vauxhall’s French parent company PSA has announced an investment in its Luton van-making plant which could eventually see Peugeot and Citroen-branded vans made in the UK.
PSA said it will increase production capacity at its Luton plant by a third “despite Brexit uncertainties”.
Peugeot said Vauxhall’s next Vivaro van would be built at the Luton plant.
Business minister Greg Clark said the decision was a “vote of confidence” in UK carmaking.
PSA said it had made the investment “despite Brexit uncertainties”.
The investment is thought to be in the tens of millions of pounds.
It was secured after a negotiation with the Unite union and a financial contribution from the government thought to be about £9m.
The investment secures 1,400 jobs beyond 2030, as the life-cycle of commercial vehicles is between 10 and 15 years.
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.”
In 2017, the Luton plant produced 70,000 Vauxhall Vivaro-branded vans.
The next-generation model will be based on PSA’s Citroen and Peugeot technology, and the company hopes to produce up to 100,000 vans a year, which could include some under the Peugeot and Citroen brands.
If demand for the vehicles means that target is hit, then additional jobs will be created in Luton.
PSA bought General Motors’ European business last year, and there has been intense speculation about the future of both Luton and Ellesmere port, where the Vauxhall Astra is made.
Group chief executive Carlos Tavares said: “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.”
Peugeot and Citroen have made inroads into the light commercial vehicle market, and accounted for half the increase in the total van market in Europe, which is why the company is looking to increase production capacity.
Company officials said it had the choice of Germany or Poland to base the new plant, but neither of those plants are equipped with a paint facility suitable for vans, and installing one would come at enormous cost.
Vauxhall UK manufacturing
- Vauxhall employs 1,400 people at its Luton plant, which produces Vivaro vans
- There has been a plant at Luton building vehicles since 1905
- The firm has 1,300 employees at its Ellesmere Port plant, where the Vauxhall Astra is built
- The Ellesmere Port plant has been running since 1962
- Vauxhall has 3,400 employees overall
Source: BBC News