Peugeot Maker Says UK Factory Plans Dependent on Brexit Talks

PARIS (Reuters) -
(Reuters/Ralph Orlowski/File Photo)

Peugeot maker PSA does not expect to make a call before the end of 2020 on whether to keep its British factory at Ellesmere Port running, depending on how Brexit talks evolve, Chief Executive Carlos Tavares said on Tuesday.

The French carmaker manufactures models for its Vauxhall and Opel brands at the plant in northwest England and had earmarked it as one of the possible sites to make new Astras.

It has previously warned, however, that Britain’s withdrawal from the European Union could pose a threat for the factory if that process affected its profitability, and Tavares said on Tuesday that negotiations with Brussels over an exit deal would be key.

“The decision will not be taken until we have a clear understanding of the outcome of discussions between the British government and the European Union,” Tavares told journalists on a conference call, which replaced an event planned for this week’s Geneva auto show.

The event was canceled due to the coronavirus epidemic.

“We won’t have an answer on that until at least midway through this year and most probably not until the end of 2020,” he said.

Tavares said the most important factor for the company would be the preservation of “a free trade market on finished cars and car parts, which will tell us whether the viability of these factories is guaranteed or not.”

The group also has another production site in Luton, near London, where it makes commercial vehicles.

PSA is in the process of merging with Italy’s Fiat Chrysler.

Tavares gave few details about the progress of talks. The groups would consult people in the firms beyond the top executives to find a name for the combined group, he said.

Like rivals, PSA is meanwhile grappling with fallout from the coronavirus that has paralyzed production in China.

It has managed to ensure that its European facilities have enough supplies to keep running for now, Tavares said. The carmaker could resume activity in the Chinese province of Hubei on March 11, in line with guidance from authorities in China, he said.