FRANKFURT -- PSA Group could only export cars to Britain and invest in local plants if the UK government helped to offset any potential tariffs imposed after the country's exit from the European Union, CEO Carlos Tavares said.
Britain has already left the bloc but has not yet finalized an agreement to ensure ongoing tariff-free trade with the EU, a step which has led PSA, which owns the Vauxhall brand, to halt investments into Britain.
"We will be eager to invest in Ellesmere Port if there is a business case," Tavares said on Tuesday, referring to PSA's plant in northwest England that builds the Ope/Vauxhall Astra compact car.
The onus would be on the British government to ensure that there is still a viable business case for exporting cars to Britain, Tavares said.
"We would have to ask the UK government to compensate for that. It is not ethical for continental European employees to pay for customs barriers to the UK market."
A decision on whether to further invest in Ellesmere Port will be made only once the terms of business between Britain and the European Union have been negotiated, Tavares said.
Tavares said that the automaker does not expect to make a call before the end of 2020 on whether to keep Ellesmere Port running. The transition period during which the UK is still observing EU rules will last until Dec. 31 of this year.
PSA has previously warned that Britain's withdrawal from the EU could pose a threat for the factory if that process affected its profitability, and Tavares said on Tuesday that negotiations with Brussels over an exit deal would be key.
"The decision will not be taken until we have a clear understanding of the outcome of discussions between the British government and the European Union," Tavares told journalists on a conference call, which replaced an event planned for this week's Geneva auto show.
The event was canceled due to the coronavirus epidemic.
"We won't have an answer on that until at least midway through this year and most probably not until the end of 2020," he said.
PSA also has another production site in Luton, near London, where it makes commercial vehicles.
PSA is in the process of merging with Italy's Fiat Chrysler.
Tavares gave few details about the progress of talks. The groups would consult people in the automakers beyond the top executives to find a name for the combined group, he said.
Like rivals, PSA is grappling with fallout from the coronavirus that has paralyzed production in China. It has managed to ensure that its European facilities have enough supplies to keep running for now, Tavares said.
The automaker could resume activity in the Chinese province of Hubei on March 11, in line with guidance from authorities in China, he said.