The new management team, brought in since its sale three months ago to American private equity firm Sun Capital Partners, has taken steps to improve efficiency and is bullish that the company will be profitable within the next six months.
Sun has so far invested £25m on top of the £20m purchase to restore production to the current weekly rate of 200 units, cover outstanding debts with suppliers and settle warranty claims.
It has agreed new contracts with dealers – the whole UK network, some 61 outlets in total, has stuck with the franchise through the transition – and contracted Lex Auto Logistics to handle parts distribution.
“In the first 90 days we’ve seen a significant turnaround in the business, with a much reduced breakeven point resulting in a much leaner and better business,” says its interim chief executive, Charles Megan. “We expect to be in profit by the fourth quarter of this year, if not sooner.”
Tony Lewis, executive director, sales and marketing, says LDV dealers are well positioned to compete against rival large van suppliers, as three in four operate 24-hour or other extended-hours service facilities. They also have easy access to parts and charge labour rates around half that of some competing franchises.
“We have an unparalleled level of aftermarket back-up, no-one else in the marketplace can match it,” he adds.
“Total demand for light commercial vehicles in the UK this year is projected to remain in line with that of the past two years, at around 225,000. The Maxus van range competes in sectors accounting for 98,000 sales and LDV’s market share objective in 2006 is for 10% plus. This excludes the minibus and chassis cab sectors.”
Maxus minibus will be unveiled during the CV Show at Birmingham NEC at the end this month, and the chassis cab is due later in the year. Lewis expects these to add 5,000 annual sales.