LDV Needs £25m Government Loan To Survive

Today brings news that the mystery automotive factory threatened with closure is in fact the Russian-backed tentative success story that is LDV.

Although its Maxus van appears to have been a success (indeed, LDV has just won an £11m contract to supply Maxus-based vehicles to the Jewson and Graham chains of builders merchants), LDV is in trouble and in need of government support.

According to today’s Guardian, LDV is in need of a £25m loan from the government if it is to survive. Apparently, LDV’s Russian owner, Oleg Deripaska, has been hit hard by the credit crunch and cannot finance the van maker. The short-term, emergency loan is needed to fund a management buy-out of the company, aimed at turning it into Europe’s first green van firm. Not sure what that means.

Update 1830 23/02/09: The government has ruled out a taxpayer-funded rescue for LDV, leaving its future somewhat uncertain and up to 6,000 jobs at risk. The Times has the latest update.

Vauxhall Offers 5% Cashback to New Van Customers

As LDV hits the buffers, Vauxhall has come up with a rather novel way to encourage people to start buying new vans.

The company is offering van buyers who put down a 20% deposit on new vans a cheque back for 5% of the total amount financed (i.e. a maximum of 4% of the purchase price). Although cashback deals aren’t new in the automotive world, the scale of this offer is larger than usual and reflects Vauxhall’s desperate need to start shifting new vans – even if they don’t make much money on them.

In this, however, they are no different to most car manufacturers – who collectively have around 500,000 unsold new vehicles sitting around in Europe at present. At least Vauxhall are trying to do something about it – although I suspect that used vehicles will continue to be more attractive to many buyers, as the UK’s vehicle auctioneers are finding.