AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

Brave new world in Leyland

24th June 1993, Page 10
24th June 1993
Page 10
Page 10, 24th June 1993 — Brave new world in Leyland
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

by Brian Weatherley • After four months in receivership Leyland Daf has been reborn into a new world of interrelated production deals and marketing agreements that would tax even the most astute industry watcher. The flow chart (below) shows just how complicated the new Daf family tree has become since Leyland Daf hit the skids earlier this year.

Following the management buyouts of the Birminghambased van plant and Leyland assembly plant, creating Leyland Daf Vans and Leyland Trucks Manufacturing Ltd, Daf NV (the new Daf company itself born out of receivership) last week bought Leyland Daf Marketing and Sales at Thame from the receiver. renaming it Leyland Daf Trucks.

Now only the Multipart parts operation. Albion axle plant and Leyland component plant and technical development centre remain unsold and under the control of the receiver.

No-one is saying how much the 3,1130 team paid for the Leyland truck plantor how much Daf NV paid for the Thame sales and marketing operation. So for the moment creditors of the old Leyland Daf company can only wonder who benefited the most from the deals—them, or the buyers.

Managing director of the new Leyland Daf Trucks David Gill says the UK company is "coming out fighting—we have the products, the people, the facilities and above all the will to succeed in developing a profitable and robust business."

While Gill acknowledges that four months of receivership has hit Leyland Daf's market share— this time last year its market share for the year to date above 3.5 tonnes was 23.3%, now it's 182% —he insists the fall has been "remarkably small in the circumstances".

More importantly Gill expects the UK truck market to rise by between 5 and 9% in 1993 to 33340O0 units. 'The market in the first half of the year has been articificially depressed by a number of Leyland Daf customers holding off until the company emerged from receivership. There's now no reason not to buy Leyland Daf."

Not all the returning customers will find their original dealers waiting for them Certainly the predicted mass defection of Leyland Daf dealers to other marques—mainly Iveco Ford and MAN—hasn't materialised, but seven sales and service outlets have gone including two of its most prestigious dealers: North East Leyland Daf and Sherwood Leyland Daf.

Gill acknowleges the loss of this duo but claims that strong financial inducements won them over to Iveco Ford: "I didn't have a big cheque book at the time".

Thame-based Leyland Daf Trucks Limited will be responsible for the marketing and sales of UK-built trucks from Leyland and Einhoven-sourced Daf products. John Gilchrist, leader of the MBO team that finally clinched the Leyland Assembly plant, says his goal is to create a long-term business plan of the Leyland As sembly Plant (LAP) "as a manf; 'hirer of our own designed vehicles and, under contract, (hose of other makes."

What those ''other makes" might be is unclear hut for the present the plant will be kept fairly busy producing the 45 Series for the UK and the Continent, 60 and 50 Series for the UK plus the fourtonne T244 truck and DROPS ammunition carrier for the Ministry of Defence, along with Leyland Comet and Super Comet trucks for export to the third world.

LAP is expected to build 5,500 units in its first full year post MBO, rising to 6,500 in the second and 8,000 in the third. Gilchrist is banking on further Army business to help fuel that increase. These figures, however, are well below the LAP capacity levels of 18,000 on a single shift and 36,000 on double manning.

"In our first year, to May 1994, we anticipate achieving a turnover of some £140 million pounds" says Gilchrist, with this figure including £50 million from Daf Trucks' purchase of 45 Series trucks and spares for sale on the Continent.

The little 45 Series will play an important part if Daf Trucks is to hit its first-year sales target of more than 10,000 trucks, worth some ,£740m, although chairman Cor Baan says that "we must and will work much harder on margins rather than volumes". Given the decline in the overall European market he probably has little choice. After accumulating massive losses the short spell in receivership has clearly left Daf Truck financially fitter and operationally slimmer. Baan claims the new company "will not make a loss in 1993".

But for many pundits and operators it is what happens to Daf beyond 1993 that most concerns them. For some observers, despite the refinancing and restructuring of Daf and the assorted MBOs in the UK the root cause of Daf's troubles—that it's neither big enough to survive like Mercedes, Volvo, Renault or Iveco, nor small enough to exist as a niche player like Foden, ERF or Seddon Atkinson—remains unchanged. Dal might have weathered a violent storm well, but only time will tell whether the traumas of the past six months have really made it any more viable.


comments powered by Disqus