Vauxhall’s Future Unclear as Opel Sale Looms

At least one of Adam Opel AG’s two assembly plants in England appears likely to face closure if General Motors Co. is successful in selling Opel to PSA Group.

That is the uneasy conclusion in the U.K. after a week of hurried talks about the proposed merger among officials from GM, PSA and the governments of France, Germany and the U.K.

Analysts suggest the decision to trim capacity in England is a direct result of the country’s vote last year to exit the European Union. Bloomberg News notes that at least two-thirds of cars produced at Opel’s Vauxhall plants in Luton and Ellesmere Port, England, are exported to Europe. But without the duty-free benefits of EU membership, their exports could be taxed as much as 10% on the mainland.

The Ellesmere Port plant may face the greater risk. The facility makes about 120,000 Astra hatchbacks and sport touring models per year, exporting 85% of them to Europe. Bloomberg News says only 25% of Astra parts are sourced in the U.K., and importing the other components could mean 5% tariffs each time the parts cross the EU border.

LMC Automotive notes that the Astra will be reengineered in 2021 and could be configured at that time to share its platform with PSA’s Peugeot 308 sedan.

Opel’s Luton plant makes the midsize Vivaro van as part of a joint venture with Renault SA. The facility imports 60% of the parts needed to make the vehicles and exports two-thirds of its output.