Stellantis deciding fate of UK car plant in matter of days

Stellantis NV will in the coming days decide on the future of its Ellesmere Port plant in England after an extended period of Brexit-related uncertainty.

Stellantis slows production in Italy as chip shortage hits car industry. (File photo) (AP)
Stellantis slows production in Italy as chip shortage hits car industry. (File photo)

A decision on future investment at the site is imminent, a spokesman for the automaker that owns Vauxhall and Opel said by phone Tuesday. The factory employs about 1,000 workers making Astra compact cars.

Stellantis Chief Executive Officer Carlos Tavares has been assessing whether it makes sense to invest in the UK due to the potential for additional costs and bureaucracy resulting from Britain leaving the European Union. He also said last month that Prime Minister Boris Johnson’s move to ban gasoline and diesel cars from 2030 could be “a problem."

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“You put your investment close to the market where you sell the highest volume," Tavares said in January. Given that, he asked rhetorically: “What is left for the UK?"

Also Read : Renault and Stellantis cut some production as chip shortages bite

Stellantis, formed from the merger of PSA Group and Fiat Chrysler, also makes commercial vehicles at a factory in Luton, England. PSA froze investments in the UK for months last year, citing the lack of clarity about the country’s post-Brexit trading relationship with the EU.

The UK car industry averted disaster with the trade agreement reached in late December, but its prospects are far from certain. After passenger-vehicle production plunged to a 36-year low last year, automakers now face more onerous customs procedures and requirements to source higher portions of components locally to avoid tariffs.

“If you look at it from a pure logistic perspective or from a paperwork perspective, perhaps it’s better to put it in continental Europe," Tavares said last month. “It depends also on the UK government’s willingness to protect some kind of automotive industry in its own country."

First Published Date: 23 Feb 2021, 15:53 PM IST
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