LONDON/PARIS (Reuters) - French carmaker Peugeot (PEUP.PA) said on Thursday it plans to build its new Astra car at its British Ellesmere Port factory but the decision depends on the outcome of Brexit, in the latest warning from the automotive sector.
Peugeot bought General Motors’ Opel unit, which trades as Vauxhall in Britain, in 2017, and has been restructuring operations to boost profitability at the once loss-making brands.
It said on Thursday that it will build the next-generation Astra at its German Russelsheim plant and also wanted to make the model in Britain, where the existing vehicle is made.
“The decision on the allocation to the Ellesmere Port plant will be conditional on the final terms of the UK’s exit from the European Union and the acceptance of the New Vehicle Agreement, which has been negotiated with the Unite trade union,” the firm said.
The announcement from Peugeot parent company PSA comes as Boris Johnson and Jeremy Hunt, the two rivals to succeed Theresa May as Prime Minister, have said they are prepared to take Britain out of the EU without a deal on Oct. 31, even though it is not their preferred option.
Britain’s car industry warned earlier this week of the “seismic” effect of a no-deal Brexit, which it fears could cripple the industry with tariffs of up to 10 percent, border delays and extra bureaucracy.
The British car industry, rebuilt by foreign manufacturers since the 1980s, had been a runaway success story in recent years but since 2017, sales, investment and production have all slumped.
Reporting by Costas Pitas and Sudip Kar-Gupta; Editing by Deepa Babington and Jan Harvey