LUTON, England (Reuters) - French auto-maker Peugeot will boost output at its English Vauxhall van plant by around two thirds from next year onwards, including new Peugeot and Citroen models, in a show of confidence in its British brand a year before Brexit.
Peugeot-maker PSA bought German carmaker Opel and its British sister brand Vauxhall last year when it acquired General Motors' loss-making European arm, and has been pursuing a restructuring plan to return it to profitability.
Peugeot said on Wednesday that Vauxhall's next Vivaro van would be built at the British company's plant in Luton, using its new EMP2 platform. This will allow it to also build Peugeot's Expert van and Citroen Jumpy model in Britain, confirming an earlier Reuters report.
Annual production will rise to 100,000 vans from 2019, an increase of around two thirds from production of 60,000 last year.
"The performance plan has been facilitated by both the responsible social dialogue with the Unite union guaranteeing production flexibility and the support of the United Kingdom Government and Luton Borough Council, despite Brexit uncertainties," the company said in a statement.
Whilst Peugeot said it needed to decide now on boosting van production, it added that it had time to wait for the outcome of Brexit talks later this year before committing new money at its Ellesmere Port car plant, where the run of its current Astra Sports model is not due to end until the next decade.
The British government is contributing to the van investment as part of its push to support the automotive industry, which is one of Britain's few manufacturing success stories since the 1980s and employs over 800,000 people and generates turnover of 77.5 billion pounds ($110 billion).
Around 1,400 people are currently employed at Vauxhall's Luton site, which is Britain's only van plant. Peugeot declined to disclose the size of its investment and it said it expected some new jobs would be created.
But automakers are worried that any tariffs or barriers to trade imposed as part of a new trading arrangement between Britain and the EU to be agreed this year for implementation from 2021 could raise costs and make some plants unviable.
(This version of the story refiles to remove extra words in headline.)