PSA Group’s underused factories could swallow up UK production

Time 3:36 pm, February 17, 2017

PSA Group factories across Europe are currently running at such low capacity they could easily swallow up the output of the Vauxhall plants in the UK – and still have room to spare.

The news could hammer a further nail in the coffin of the firm’s UK plants at Ellesmere Port and Luton and its 3,500 UK workers, as the French suitor looks to size up an acquisition of Opel plus Vauxhall and subsequently cut costs.

Government ministers were in talks with the French firm last night, with business secretary Greg Clark being told that Vauxhall’s ‘committed workforce’ was highly valued by the PSA Group.

However, with jobs in the UK three times cheaper to get rid of than those in Germany and spare capacity across the European plants, an acquisition may mean the axe could be quick to fall on UK production facilities.

PSA Group’s car plant in Rennes, France, only ran at 25 per cent capacity in 2016, producing 56,000 units of its overall 224,000 potential volume.

Ellesmere Port produced 114,000 units in 2016 – 63 per cent of its 181,000 total possible production – and a figure that could be easily swallowed up by the Rennes factory alone.

Vauxhall’s Luton plant made 72,000 units in 2016 – 82 per cent of its total – a figure that could easily be absorbed by the PSA Group’s second most under-utilised car plant, Villaverde in Spain, a site that’s currently running at just 41 per cent capacity.

While the PSA Group factories would need significant retooling to cope with the Vauxhall models, the figures show just why a merger is so attractive.

Add into the mix GM’s three existing plants in Germany – all of which could easily accommodate the brand’s UK output – and those plants in Britain look even more at risk.

A UK spokesman for the PSA Group refused to say whether it would be possible for the cars currently made in Vauxhall’s UK plants to be swallowed up by its existing European factories.

However, a spokesman for the group confirmed the production figures for its factories were correct, but said Rennes would shortly be taking on production of the new 5008 and its Spanish facility was ‘doing well’ with the Citroen Cactus.

‘PSA Group utilisation rate is close to 100 per cent and we do not provide details per factory,’ he said in a statement.

He also refused to answer whether the PSA Group factories could feasibly produce the cars currently made in the UK by Vauxhall.

Nick Holt, editor of Automotive Manufacturing Solutions Magazine, said: ‘I do not think PSA Group would be enjoying anything near 100 per cent utilisation of its plants – it would be lucky to be getting 60-70 per cent.

‘I think rather than Vauxhalls being made in PSA Group plants, if the deal goes through, they would be far more likely to be switched to GM’s plants in Germany that would be geared up and able to quickly take them on.

‘While PSA Group will be looking to cut costs, the option of making cars from another brand in a factory that is tooled up for a different model could be cost-prohibitive.’

MORE: Vauxhall workforce highly valued, minister told at talks on takeover plan

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James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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