The end of car production at Ryton is the latest bad news in a "torrid time" for the West Midlands automotive industry.

Dr David Bailey, of Birmingham Business School, said the plant was a victim of globalisation, with the writing on the wall coming when Peugeot invested one billion euros in a new plant in Slovakia.

The new site, which will employ around 5,000 people, will make the 207, the successor to the Ryton-built 206.

Dr Bailey, who specialises in the motor sector, said: "This is very bad news, especially after the torrid time the West Midlands automotive industry has gone through recently.

"There were big question marks after Peugeot set up its factory in Slovakia. That left nowhere for Ryton to go.

"Peugeot made a decision to shift to a lower cost economy, where labour costs are about a third or even less than in the UK."

Ryton, which in its heyday employed 5,000 people, was also a victim of the flexible UK employment market as well as the Eurozone, Dr Bailey added.

"Peugeot is a French company and there was no question it was going to cut production in France; the government would oppose it and there would be strikes.

"It is much easier to shut plants in the UK because of the flexible labour market; this is better for creating jobs, but also means it is easier to lose them as well.

"The plant is a victim of globalisation, but the euro is also an issue. Slovakia is a member of the EU, so it can export anywhere without tariff costs, but it is also joining the euro. You can see lots of the major manufacturers moving over there at the moment."

The wind down was gradual, said Dr Bailey, which made it less of a shock.

"When the announcement about the end of 206 production was made, the plant went down from four shifts, to three. Now there are two shifts.

"The 206 was an old model, and as production numbers came down this meant the cost per worker has risen.

"That is what made it a high cost plant and was followed by Peugeot's decision to close it."

Dr Bailey said there could also be some redundancies among component firms who were still reeling from the end of MG Rover production at Longbridge last year.

"The regional development agency did a good job dealing with the MG Rover fall out, and also in the five years before.

"The Rover Taskforce helped a lot of companies to diversify and deal with the aftermath, and they should do that again."

But despite the impending closure, Dr Bailey said the Midlands still had a future in the automotive industry.

He said: "The car industry is not going to disappear. There is still Jaguar and Land Rover here, and well as Toyota at Burnaston in the East Midlands.

"Further afield there is BMW Mini at Oxford and Honda at Swindon. There are lots of components firms which supply all of these plants.

"But there will be a lot less assembly work going on. We need to do is get more involved in high tech research and development work.

"Engine production is still an area of expertise for the region, while BMW is planning to produce its replacement model for the Mini at Oxford.

"That will use engines made at Hams Hall in Warwick-shire, so although we are going to see not so much assembly work there is going to be more high added value manufacturing."

But could volume manufacture leave the Midlands, the historic home of the UK car industry?

"There will be lean and efficient Japanese car firms, and European firms which are highly branded, which have higher margins," said Dr Bailey.

"High branded products like Jaguar and Land Rover still have a future, but they have to maintain the willingness of consumers to pay a higher price."