LDV’s 61 UK dealers stand to benefit from next year’s 50% increase in sales planned by Russia’s Gaz Group.

The new owner of the Birmingham vanmaker does not plan to recruit additional outlets, and a higher throughput would increase profitability.

Martin Leach, new chairman of LDV, says dealers will not have to renegotiate contracts and that the quality of the network was one of the attractions for Gaz.

Leach is confident of a sharp rise in sales of LDV vans despite the recent arrival of the new Ford Transit and other new models. The European light commercial vehicle market has no dominant players but lots of volume. Leach believes there are significant market opportunities for a strong van-dedicated company, and LCVs offer better margins than cars if the business and product is right.

Gaz, Russia’s second largest automotive maker, purchased LDV from Sun Capital, the financial investment group, which bought it out of administration last year for an undisclosed sum.

The company, owned by Russian oligarch Oleg Deripaska, is thought to have paid around £50m and the quick sale suggests a significant profit for Sun Capital, which bought LDV for around £20m, although has since invested a similar sum.

The deal was brokered by Magma Holdings, an automotive consultancy founded by Martin Leach and Steve Young. Leach says he and Young, chief executive of LDV, are giving a full-time commitment to Gaz, though both retain a shareholding in Magma. They are both believed to have a stake in the LDV business.

Leach, a former president of Ford of Europe, was later briefly chief executive of Maserati. Young, who has worked for Ford and British Leyland, was the head of automotive practice of management consultant AT Kearney until last year.

The first challenge for both men is to make LDV profitable. Sun Capital is believed to have trimmed the £4m per month loss it inherited, in part by reducing the workforce to 800.

LDV (previously Leyland Daf Vans) hopes to avoid further redundancies at the assembly plant, which builds 13,000 Maxus vans a year and a range of minibuses.

Gaz Group is the world’s seventh largest commercial vehicle maker with annual output of 180,000 trucks. Leach says the Birmingham plant will continue to serve western Europe. Gaz will build Maxus vans in Russia for other markets.

#AM_ART_SPLIT# Indego ‘hibernates’

Customer-care principles developed under Indego will be introduced into LDV, and the car project is alive but “in hibernation”, says Steve Young.

AM reported last year that Young proposed to launch a volume car range in the A to C sectors branded Indego by 2009. The cars would be leased on short- and medium-term contracts.

“We tried but failed to acquire another business to turn into Indego – it wasn’t MG Rover,” he says. “Some interesting projects may come through in the future.”