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PSA is said to end Renault-Vauxhall venture at UK Luton plant

[PARIS] French carmaker PSA Group plans to end a venture between its Vauxhall brand and rival Renault SA that makes vans at a plant near London and instead use the capacity for its own output, familiar with the matter said, as PSA tries to revive the UK car company it acquired last year.

Ending the venture would allow Paris-based PSA take full advantage of the plant in Luton, England, said the people, asking not to be identified because the decision hasn't been made public yet. Chief Executive Officer Carlos Tavares plans to go to the factory for an announcement Wednesday, they said.

The venture produces Vauxhall's Vivaro medium-sized vans on the same platform as the Renault Trafic. PSA, the maker of Peugeot and Citroen cars, could make vans for those brands at the plant, the people said. The planned exit of the UK from the European Union puts an increased focus on competitiveness at PSA's factories in the country, the CEO told Bloomberg last year.

PSA purchased the Opel and Vauxhall marques last year from General Motors Co for about 2.2 billion euros (S$3.55 billion). Vauxhall mainly produces vans in Luton and also operates a factory in Ellesmere Port, England, that makes the Astra hatchback and station wagon. Mr Tavares has pledged to turn around the operations of the automaker, which has been building largely identical cars to models designed by Germany-based Opel.

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Increased production at Luton would be a boon for UK Prime Minister Theresa May amid concern that manufacturers may cut jobs and move production out of the country as it leaves the EU. Tariffs and other hurdles to trade after Brexit could crimp auto output since parts routinely move across borders several times during the manufacturing process.

A spokesman for PSA declined to comment, as did a Renault spokesman.