Stellantis, which also owns brands including Citroen and Peugeot, said it was expecting to close the site in April next year.
The closure forms part of the group’s proposal to consolidate its UK manufacturing of vans to create an all-electric hub at its Ellesmere Port plant, in Cheshire.
It is set to invest £50 million in the Ellesmere Port site, as it steps up efforts to meet the Government’s zero-emission targets.
About 1,120 full-time employees work at the Luton factory, which currently makes light commercial vehicles.
Stellantis said it had launched a consultation with employees and union partners on its proposals.
If they are approved, hundreds of permanent jobs will be created at the Cheshire-based factory for affected staff who wish to relocate, the firm said.
Stellantis also said it would offer job support, including opportunities for retraining, to all those impacted – and will work with local government and employers to find new work for Luton-based employees.
A spokesman for the Government said: “While it’s encouraging to see Stellantis investing in the future of its Ellesmere Port plant, we know this will be a concerning time for the families of employees at Luton who may be affected.
“We have a longstanding partnership with Stellantis and we will continue to work closely with them, as well as trade unions and local partners on the next steps of their proposals.”
Stellantis plans to have the consolidated production line at Ellesmere Port in operation by the second half of the 2026.
The Ellesmere Port factory makes battery-electric light commercial vehicles including for Vauxhall, Citroen, Peugeot and Fiat.
The carmaker said the plans could contribute to making its production more efficient, in light of the Government’s zero-emission vehicle mandate.
This requires 22% of all new car sales to be battery-electric vehicles in 2024, with the target rising to 80% by 2030 and 100% in 2035.
The Government’s spokesman added: “The Government is also backing the wider industry with over £300 million to drive uptake of zero-emission vehicles and £2 billion to support the transition of domestic manufacturing.”
