PSA Peugeot Citroën is to close its only manufacturing plant in England next year, affecting 2,300 jobs, the French car maker announced yesterday.
The world's sixth-largest car maker, which has been battling with sluggish sales at its main markets in western Europe, said high costs meant it could no longer afford to carry on investing in the plant near Coventry.
The Ryton plant produced the outgoing 206 model. It was originally a facility for the Rootes Group after the second World War before being taken over by Chrysler in the 1960s. Peugeot has owned the plant since 1978. In its time it produced the 309, 405 and 306. Since 2001 it has only produced 206s, though most 206s were still produced in France.
Its closure is the latest body blow to Britain's once proud car manufacturing industry, which has had to contend with fierce competition from overseas and cheaper manufacturing costs in emerging markets. Last year MG Rover's collapse cost 5,000 jobs while Ford, which owns the luxury brand Jaguar, also cut jobs and scaled back production in England in 2004. Peugeot said it would close down the plant at Ryton in two phases. Firstly, the factory's two working shifts would move to a single shift in July 2006, with production not continuing beyond mid-2007.
Last month, PSA Chief Executive Jean-Martin Folz told a German business weekly that the company could not rule out closing western European assembly plants if it felt it could no longer afford the high costs.