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LDV is cooking with Gaz
Page 26
Page 27
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In our recent LDV supplement Andy Salter talked to chief executive Steve Young. Space limitations meant we couldn't bring you everything he said, so here's the full version...
people have been writing off LDV ever since the company was rescued from the ashes of Daf Trucks in 1993. For the past 12 months CEO Steve Young has been working to prove the doubters wrong and get LDV back in the black.
At the CV Show earlier this year the company revealed that it was boosting production. The build rate is up 63% to 300 vehicles a week, and year-on-year sales are up 65%.
What's more, dealers are re-investing in the franchise and new dealers are joining the network. A new range of Maxus chassis-cabs, minibuses and dual-purpose vehicles will hit the road later this month, and the Maxus is selling so well on the Continent that it has been added to the shortlist of nominations for the International Van of the Year 2008.
At the Moscow Motor Show last month (see page 54). LDV's parent company Gaz unveiled the Maxus to an expectant Russian public and the initial response is promising.
Young is well respected on the international automotive field and, alongside Martin Leach (formerly of Ford), is spearheading the market development of Gaz outside the former Soviet Union under the Gaz International banner. Clearly Gaz is a company with funds: the management team has a clear brief to explore opportunities for growth.
Ironically the biggest acquisition to date — LDV — happened almost by accident. -I'cl previously been a non-executive director at Ashok Leyland in India and we were aware LDV could be on the market as a potential acquisition target," Young explains "Ashok Leyland chose not to go forward as Sun Capital was already engaged in the acquisition.
When I joined Gaz I flagged it up as a potential target. I was convinced Sun Capital wouldn't go the distance, although I didn't expect it to back out as quickly as it did."
Turbulent times The fallout from Sun Capital's brief ownership of LDV created a degree of turbulence for the new management team as all existing contracts with suppliers, dealers and customers had to be renegotiated. But the worst times are now a bitter memory.
"We recapitalised the business in November 2006, giving the company a fresh injection and underlining the fact Gaz is in this for the long-term." says Young. "We've made clearly demonstrable progress. The dealers are now investing in the brand, the workforce is extremely loyal and flexible, and the customers see the Maxus as a legitimate consideration for their business. We're now well above our break-even volume and I'm sure we'll return to profit this year."
Young is confident that the newcomer will spearhead the company's growth over the next three or four years: "Maxus is a fantastic product. ft has one of the best payloads in its class and that's because it's built to a nocompromise design to suit the customers in the European 3.5-tonne sector.
-We've now added the chassis-cab to the range, and the order book is building rapidly. The range will continue to evolve, but we will stay focused on the needs of the customer.
"To go down the weight scale you need a substantially different product approach, and we have some plans for that. We'll also look to extend up the weight range, but not in a way that will compromise the product."
The dealer network has always been one of the company's strongest points and that continues with the Maxus. A number of independent dealers have recently been added to the fold —Volvo Truck dealerThomas Hardie Commercials has signed up with five outlets — and many of these recruits, notably Aquila in the West Midlands, are investing in new branding and signs.
No restrictions The truck heritage continues at LDV, but the traditional alliance with Daf dealerships does not appear to be as strong as it once was.—Ihose dealers with the Daf franchise are still very important to us," says Young, 'but we don't see ourselves restricted to any one make. It's the quality of service that's the important factor both to us and the customer. We're looking to add a further 20 sales points over the next year. We're open to discussion As well as launching in Russia, LDV has a clear sales development strategy for Western Europe. An average of five new sales points a week are opening on the Continent — predominantly in Benelux, France and Spain for now, but there are plans to move into Germany. Austria and Switzerland later this year; Italy is in LDV's sights for 2008.
"We've ramped up in France," says Young, "and we're now developing in Spain and Benelux. The country manager in Benelux is ex-Daf Trucks and Mercedes; in Spain we've hired an ex-Hyundai person; while in France we've recruited someone from Mitsubishi to run the territory. These are all experienced people. We'll roll out east and south from here.
"We wanted to have 70 dealers in Europe by the end of this year... we'll exceed that."
Nobody at LDV is under any illusion that international growth is going to be easy, but the early signs are promising. It's unfortunate the latest Maxus was overtaken by new models from the major European manufacturers, but it remains a totally credible player in the market.
LDV now has an owner that is prepared to stake a few quid on its future — something that has been missing for over a decade — and is also looking at ways to expand and regenerate the company and its products. We won't be writing them off just yet. is