LONDON - UK truck maker LDV wants a bigger share of the commercial van market in Europe.
LDV, in partnership with Daewoo, plans to build a new range of heavy- and medium-duty vans that will go on the market in 2000 and 2001 respectively.
LDV currently builds the medium-duty Pilot and the heavy-duty Convoy at its plant in Birmingham. The company sold 17,000 units last year, 90 percent of them in the UK. By 2005, LDV expects to be producing 80,000 vehicles.
Allan Amey, LDV chief executive, says the company will focus mainly on Germany and France for future growth. He wants a sales mix of 50-50 between the UK and mainland Europe.
Daewoo has agreed to sell some of LDV's vehicles, which consist of cabs, vans and minibuses, through its east European dealer network.
The company is working with Japanese distributor Itochu to expand its dealership base in western Europe.
'With the help of Daewoo, we will be able to sell and market our products worldwide,' Amey said.
LDV will take the development lead for the medium van, which it will sell under the LDV name; Daewoo will develop and sell the heavy vehicle as a Daewoo.
Both models will be produced at LDV's plant in Birmingham and Daewoo's plant in Lublin, Poland.
Daewoo is investing $25 million in the project for an equity stake that will not exceed 50 percent. The total cost of the program is $160 million, which will include refurbishing the Birmingham factory.
LDV was founded five years ago as a limited partnership. It has 1,500 employees but plans to add 2,000 jobs with the new venture.
Sales grew from $70 million in the first year to $229 million last year. Profits last year were $21.5 million.
Ken Ogilvie, executive director of corporate planning for LDV, expects profit margins to increase substantially under the new joint venture.