Peugeot's parent firm PSA Peugeot Citroën has dropped a bombshell on the British car industry by announcing that it plans to close its Ryton car plant by the middle of next year.
The production line at the factory, which produces the 206 model, will be closed down in two phases. It will move from two shifts to one this July, and then cease production completely 'by mid-2007'. In total, 2300 jobs will be directly affected.
PSA Peugeot Citroën says that 'a detailed study during the first quarter of 2006 has clearly confirmed the weakness for the Ryton plant - high production and logistical costs - mean that the Group is unable to justify the investment needed for the production of future vehicles'.
After the launch of the 207, the 206 is destined to be Peugeot's cheap model. Peugeot is now likely to switch the Ryton production to either France (where two plants build the car already) or bases in Iran and China.