PSA Group Investing £100 Million in U.K. LCV Plant

LONDON – Superior paint shop capability is the key feature that wins one of Vauxhall-Opel’s U.K. plants a £100 million ($141 million) investment by parent company PSA Group.

The Luton plant, about 10 miles (16 km) north of London, has won the contract to produce the next-generation Vivaro range of light-commercial vehicles, guaranteeing work for its 1,400 workers for about 10 years. Production is to begin in 2019.

The investment aims to raise the plant’s annual production capacity to 100,000 vehicles based on PSA’s EMP2 platform. In 2017, the plant produced 60,000 Opel/Vauxhall Vivaros.

PSA says the investment is meant to strengthen its market share in Europe’s LCV segment and accelerate its development elsewhere.

In 2017, PSA reported record LCV unit sales of 476,500, up 15% on 2016. Adding car derivatives such as the Peugeot Traveler and Citroën SpaceTourer, the French automaker sold 658,000 units last year.

The investment in Luton, backed by a £9 million ($12.7 million) contribution by the U.K. government, is the result of a performance plan negotiated between the Unite trade union combined with the plant’s recognized know-how in the manufacture of LCVs and the flexibility of its existing paint shop.

“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 U.K. government,” PSA Chief Executive Carlos Tavares says.