LDV teams up with Daewoo
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by Toby Clark • After years of uncertainty, LDV's future looks secure: the Birminghambased van builder has finalised a deal with Daewoo which is expected to quadruple production and create up to 2,000 jobs by 2005. Daewoo's investment will total £160m.
The partnership involves the development of two new ranges of panel vans to be launched within five years. They will be built at LDV's Washwood Heath plant and at the Lublin factory of Polish Daewoo subsidiary DMP.
LDV will build 80,000 vans a year (it produced 17,000 in 1997) while Daewoo will build 150,000 vans a year. Half of LDV's production will be branded Daewoo for export; the firm also intends to increase its own exports, currently about 10% of total production, to 75%.
LDV will concentrate on West European markets while Daewoo sells in Eastern Europe and Asia.
LDV chief executive Allan Amey describes the deal as an opportunity "to establish a competitive cost base", indicating that the firm will offer a lowcost product. THE DEAL
• Daewoo is not taking over LDV but has invested £25m in it for a "significant but not controlling" equity stake. This provides cash for developing new products and updating plant, but ultimately the deal depended on public funding.
The Department of Trade and Industry (Dti) has granted around 25m in Regiona Selective Assistance (RSA), Allan Amey says: "We've had a lot of support from Margaret Beckett (President of the Board of Trade)—she wants the automotive sector to survive and thrive." Beckett says: "Everyone is clear that this is a project with huge potential," but warns that it has some risks—LDV needs to maintain sales of its existing range to generate cash.
THE NEW VANS
• LDV and Daewoo will share two new panel van designs. The lighter van, codenamed the BD100, will replace the LDV Pilot in the weight range from 2.0 to 2.8 tonnes Clik it will be developed by LDV. Daewoo's Worthing Technical Centre (formerly the International Automotive Design consultancy) will lead development of the heavier [0100—like the current [DV Convoy this will have a CVW from 2.8 to 3.5 tonnes. Both companies will market both vans.
Engines may come from Polish manufacturer Andoria, which already supplies power plants for Polish-assembled [DV vans: Daewoo has a controlling stake in Andoria. However, it has also been talking to Renault about diesel engine development. so the BD100/LD100 vans could be powered by Renault-derived common-rail injection diesels.