Opel delays Astra to get better visibility on UK/EU Brexit deal

Opel delays Astra to get better visibility on UK/EU Brexit deal

PSA Group has delayed the sales launch of the Opel/Vauxhall Astra compact car due to the continuing uncertainty around Brexit, a source familiar with the matter said.

The Astra is now expected to go on sale in 2022, a year later than previously announced.

The Astra is a key product for Opel/Vauxhall because it is the division’s second best-selling model after the Corsa small hatchback.

It is currently built in two European factories – Ellesmere Port, England and Gliwice in Poland.

PSA CEO Carlos Tavares has said production of the next-generation model in Ellesmere Port plant will depend on the UK striking a favorable trade deal with the EU after Britain leaves the bloc.

PSA said in June that the new Astra would start production in 2021 split between two plants, one of which would be Opel’s Russelsheim plant in Germany.

Tavares also said he wanted the Astra’s second production plant to be Ellesmere Port, but he warned that the factory could be shut down if Britain quits the EU with a bad trade deal.

“Frankly, I would prefer to put it [the Astra] in Ellesmere Port, but if the conditions are bad and I cannot make it profitable then I have to protect the rest of the company and I will not do it,” Tavares told the Financial Times. Tavares said  he had an alternative plant in mind but did not mention its name.

PSA plans to add output of large commercial vans in Gliwice to replace Astra production at the plant.

Delaying the launch of the Astra would give Tavares visibility on a trade deal that the UK has said it will strike with the EU by the end of the year. Observers are skeptical that so complicated a deal can be completed in such a short time frame, meaning the UK could yet leave without a deal.

PSA has axed around 900 jobs at Ellesmere Port since buying Opel/Vauxhall in 2017 in a bid to stem losses at the plant.

PSA second UK plant in Luton, southern England, is safe after it was awarded production of a new range of midsize vans.

Astra sales in Europe fell 12 percent  to 130,372 in the first 11 month of last year, according to JATO Dynamics market researchers, as customers continued to migrate towards SUVs.

The Astra is a popular business fleet model partly because of discounts, although PSA has worked to reduce incentives as part of its successful strategy to return Opel to profitability.

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