LDV

LDV’s plans, announced tonight, for a management buyout are an excellent sign of faith by the businesses leaders in the company.

For some weeks now I have been working closely with the company as they have shaped their ambitious plans for winning a big share of the “green van” market. I’ve been playing my part making sure ministers and the most senior officials at DBERR are completely clear about the opportunity LDV has now put on the table and how government can help.

LDV’s management team have also issued the following news tonight.

MANAGEMENT BUYOUT LAUNCHED TO CREATE EUROPE’S FIRST GREEN VAN COMPANY AT LDV

A management buyout to transform award-winning British van manufacturer LDV into Europe’s first green van company is nearing completion, it was confirmed today.

The plan led by former GAZ Chairman and Volvo MD Erik Eberhardsen would make the Birmingham-based manufacturer the first volume producer of electric vans in the UK.

Plans are at an advanced stage, with prototypes of electric vans already trialing with a number of major companies and strong prospects of support from the European Investment Bank. The company is now in constructive discussions with the government about securing bridging support to complete the project.

Erik Eberhardsen said:

“LDV can be a symbol of the low carbon, green manufacturing future that the government says it wants Britain to lead”.

We are almost ready to go, but we need the Government to do its bit. I am confident they understand the potential to secure this exciting green technology in Britain – and the need to move very quickly”.

“We have world class skills here in Birmingham and this is an award-winning company. In LDV, Britain has a real chance to be a world-leader in the technologies of tomorrow.”

An LDV spokesman said:

“The Government has talked about backing ‘a green industrial revolution’ – this project is talk turned into action. LDV has been a successful company and just last week won a significant new order. Short term bridging support for this MBO from the government will secure its future and the future of hundreds of jobs.”

Lord Mandelson has pledged that Britain will be “at the leading edge of the development of low carbon vehicles and green manufacturing”.

LDV which had seen fortunes transformed since GAZ group took over in 2006, has like other manufacturers been hit hard by the global downturn. Sales across the van sector have almost halved in the past three months. GAZ has continuously invested in the Washwood Heath plant putting in over $100m of capital which has created 200 new jobs, new production facilities and world class skills. Its commitment has continued with support for the MBO.

Last week LDV won a three year contract to supply vehicles to timber and builder’s merchant Jewson and its sister company Graham, the plumber’s merchant. LDV will supply 500 vehicles worth more that £11 million, distributed across Jewson’s and Graham’s nationwide branch network.

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One Response

  1. Liam, I am Ling Valentine. I own a new car leasing company called LINGsCARS and I moved over £35m (at retail price) of new cars and vans in 2008.

    I am a female Chinese immigrant human being.

    First the bad news: To me, LDV is simply an unprofitable company in a saturated market. We can see they only registered circa 180 vans in January, yet they seem to have 850 staff! Something wrong there, that spells b-u-s-t. So, massive job losses and cuts are needed immediately.

    For the last 4 years, it is reported the company has been unprofitable. Therefore, it stands to reason they will have little or no cash = bust again.

    They have no van entry product (ie smaller vans from which customers may be inclined to upgrade to the larger vans as they grow) and no product for people to upgrade from 3500kg – so, they rely on conquest sales in a narrow market.

    The vans themselves are lacklustre compared to modern competition. I know this as I am at the sharp end of demand. There is little demand for the product, compared to the competition. They need to fix some things:

    1. Those side panels are bad, they are bad for signwriting and look terrible. They need flat sides on the vans.

    2. They need to desperately cosmetically beef up the vans, double xenon headlights (then the drivers think: “people think I’m cool”, bold grill like a truck, beefier looking wheels, air horns maybe. Van drivers like their image. They are frustrated truck drivers. The vans are anaemic looking. Give the vans some Bose audio, bluetooth and stuff – do you know a van driver who doesn’t like music? All relatively cheap mods. Give them a breakfast bar so they can eat snap in the van.

    3. Then they really need to maximise customer contact. Website is their salvation. Their effort and SEO is terrible. Their website is bad, white and yellow on black, tiny writing. Let’s be a bit honest. Contractors and van buyers may not be the best readers or writers and they like tabloid newspapers. They are not keen on squint-black with tiny pics and writing. They want easy, fun, and tasty.

    4. Once the website is usable and readable it needs stickiness and fun. Then interact with customers by talking, not just telling. By getting people’s permission to communicate, building loyalty and being there, live, in the website. Capture and chat live to customers while they are in the website. Frankly, get a room with a few attractive girls, make the chat a destination that will be viralled. Make the visitors say to their boss “I want an LDV”. have a club that gets EXTRA features and personal tabloid-style (funny, edgy) communication. Use some of those 850 workers who are not building vans at the moment. Make the website visitors say to their mates; “You HAVE to visit this site”. Break the mould. (Keep a boring website if they think they need one for fleet managers, but trust me, they will love Tabloid and fun, too).

    5. Then, consider the dealer sales model. 180 registrations (most I guess Post Office type stuff) cannot sustain dealers and it eats any profit. These fleet deals are thin margin. Start selling direct to user customers or use low cost routes like brokers and membership organisations (eg Guild of Master Builders etc). Do the selling themselves, cut out the dealers margin, which will reduce prices and increase profits. Do not need dealer network at these volumes. Ford do 20x as many vans/mth. Any reputable garage can do warranty/repair work, these are not Ferraris and they have Ford engines! Simplify the offering. Build what sells, not 200 variants. Slash costs ruthlessly.

    All in all, it will not be battery vans which will save LDV, it will be the basics, and stopping being lazy over sales. However, with even Mandleson (the Russian’s yacht pal) unwilling to throw cash, LDV have probably waited until it is too late.

    You need an investor who needs to write off a load of tax/profit. How about Jon Moulton? He is a top man.

    LDV desperately have to stop competing on level terms with Ford and the rest and go out and create a market and a reason for people to buy/lease/use their vans. Blokes. Who watch Top Gear and read the Sun. And stop dreaming about an electric world, that will be a marginal market for a while. They need van sales today and tomorrow, not with an electric product in 2-years. Firms want lowest cost, not greenest van at the moment. A viable off the shelf LPG van would work though.

    Liam, I hope this helps instead of the wishful thinking, but I guess they will keep doing the same old… and the writing has been on the wall for ages. Frankly there is better/more modern product out there. It’s like watching a slow death.

    – Ling Valentine
    LINGsCARS

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