The next generation of Vauxhall Vivaro as well as existing Citroen Dispatch and Peugeot Expert vans will be built at the car maker's Luton plant from 2019 onwards, essentially confirming the future of the factory for a decade.
Since the 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 Ellesmere Port plants in the UK, which build the Vivaro and Astra respectively. The decision safeguards the future of the Luton plant, and PSA bosses have said a decision over Ellesmere Port will be made in 2020.
PSA chairman Carlos Tavares says the firm has now reached a deal with the UK Government, the Unite trade union and Luton Borough Council over the future of the plant. The deal includes an investment of £9 million from the UK Government, and will result in PSA investing 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."
With the lifecycle of a commercial van around 10 years, the decision likely safeguards the future of the Luton plant until 2029. Unite Union general secretary Len McClusky said the deal would lead to the creation of around 350 new jobs at the site.
Tavares: we took a 'risk' on Luton
Speaking at the announcement in Luton, Tavares added that progress still needed to be made at the site. "Luton has decreased manufacturing costs by 17% in 2017 compared with 2016," he said. "It still needs to decrease by another 20% to be in line with continental plants.
"This plant is solid. We've been reviewing it this morning and this is a serious plant. PSA is a strong number one in Europe for light commercial vehicles, and we have plans to increase our worldwide presence."
Tavares added that the group will increase production at Luton instead of doing so at its French facility. "We are taking the risk to decide it now, and we will be working together in a more intense and efficient way to be the winners in this period of uncertainty. There was a choice to increase production capacity in our French LCV plant, but we want to use the full capacity of our manufacturing system in Europe, including the UK. We are working to give each of our plants the chance to be in control of their destiny."