British motor industry gets £100 million boost from France

Vauxhall Vivaro will continue to be built in Luton, at least until 2030 - but is there reason for overall optimism in the UK auto industry?

Photograph of cars in a row illustrating an article about the UK motor industry receiving £100 million from France
The UK motor industry's fears over its post-Brexit future have diminished in the wake of an announcement by Vauxhall's French parent company PSA that it is to make an investment of at least £100 million in its Luton plant.The decision, which secures 1,400 jobs at the plant until at least 2030, will see the next generation of Vivaro vans built in Luton, boosting the factory's output from about 70,000 vehicles a year to 100,000.PSA said it had decided to go ahead with the investment, which includes £9 million of pump-priming cash from the government, "despite Brexit uncertainties".Business Secretary Greg Clark said the decision represented a vote of confidence in the UK's automotive sector, adding: "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."Carlos Tavares, chairman of PSA, which also owns Peugeot and Citroen brands, said: "Performance is the trigger for sustainability and I would like to thank all stakeholders involved and underline the open mind-set of our union partners, as well as that of the UK government."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."

The question now for PSA is whether or not to build the next generation of its Vauxhall Astra car at its plant at Ellesmere Port in NW England, which currently employs 1,300 people, or switch production to France.No decision on that is expected until 2020, when it has become clear what sort of post-Brexit trade deal the UK has managed to reach with the European Union.Meanwhile, figures from the Society of Motor Manufacturers and Traders (SMMT) on Thursday showed that new car registrations in the UK fell by more than 15 per cent in March compared to a year earlier.Much of the decline was due to the fact that March 2017 was a record month for registrations as it came just ahead of increased vehicle excise duties. Additionally, there has been a drop of more than a third in the demand for diesel cars, while orders for petrol vehicles held steady and that for alternative fuel models rose 5.7 per cent.Mike Hawes, SMMT chief executive, said: "March's decline is not unexpected, given the huge surge in registrations in the same month last year."Despite this, the market itself is relatively high with the underlying factors in terms of consumer choice, finance availability and cost of ownership all highly competitive."Consumer and business confidence, however, has taken a knock in recent months and a thriving new car market is essential to the overall health of our economy."
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