April 3, 2018 / 5:15 PM / a year ago

Peugeot plans new UK van production at Vauxhall Luton: source

FILE PHOTO: The brand name of Peugeot, part of French carmaker PSA Group, is seen at a dealership of the brand in Saverne, France, January 9, 2018. REUTERS/Vincent Kessler/File Photo

PARIS (Reuters) - French carmaker PSA Group (PEUP.PA) plans to begin production of Peugeot and Citroen delivery vans at its newly acquired Opel/Vauxhall division’s Luton plant in England, a company source said on Tuesday.

The move is likely to be seized upon by British Prime Minister Theresa May’s government as a sign of confidence in the country’s economic prospects as it prepares to leave the European Union.

A PSA spokesman declined to comment on Luton production plans or on a Bloomberg report that the auto group was ending the existing van partnership between Opel/Vauxhall and French rival Renault (RENA.PA), which also declined to comment.

Luton builds the current Opel/Vauxhall Vivaro van model on technical underpinnings shared with Renault’s Trafic model, which has also been assembled at the UK plant in the past.

PSA Chief Executive Carlos Tavares is expected to announce new van production plans during a visit to the factory on Wednesday.

Right-hand-drive variants of the Peugeot Expert and Citroen Jumpy models will be built in Luton alongside future versions of the Vivaro, the company source told Reuters. PSA acquired Opel/Vauxhall from General Motors (GM.N) last year.

Reporting by Gilles Guillaume and Laurence Frost; Writing by Laurence Frost; Editing by Alexandra Hudson

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