By Costas Pitas
LONDON (Reuters) - The Vauxhall car factory in northwest England will get a 100-million pound ($140 million) investment to produce electric vans, owner Stellantis said on Tuesday, the second positive announcement for British vehicle output in recent days.
Nissan (OTC:NSANY) pledged last week to invest further in the country with plans for a new giant battery plant, as companies electrify their line-ups ahead of looming bans.
The future of Vauxhall's Ellesmere Port factory had been uncertain since its owner said in 2019 that it wanted to make the new Astra car there, but that would depend on the outcome of Brexit, which was only settled in December 2020.
Stellantis said it had been "supported by the UK government", having sought a binding commitment from the authorities to make fresh investment. Some car companies have received around 10% towards their spending.
"It's a huge vote of confidence in our economy, in the people of Ellesmere Port and in our fantastic post-Brexit trading relationships," said Prime Minister Boris Johnson.
Trade barrier fears prompted some to halt investment in recent years but a Dec. 24 agreement secured zero-tariff trade for the sector, subject to vehicles containing a minimum level of parts sourced from the region.
From later in 2022, the site will produce the Vauxhall/Opel Combo-e, Peugeot (OTC:PUGOY) e-Partner and Citroen e-Berlingo vans and their passenger car variants, making the location Stellantis' first site dedicated to battery electric vehicles for the brands.
Cells will be imported from its affiliate ACC in continental Europe or other suppliers although the company said it did not rule out UK production if it later needed additional capacity.
Van demand has risen more quickly than for cars this year in Britain following store closures and an increase in online shopping.
Vauxhall, which trades as Opel in continental Europe, already produces vans at its southern English Luton factory where it made just over 62,000 vehicles last year.
In May, Stellantis said the site would gain a third shift to meet demand for the Vivaro, Citroen Jumpy/Dispatch and Peugeot Expert.
More spending could come as it intends "to consult on further investment into the Ellesmere Port site with the creation of a new UK parts distribution centre".