Caravan Insurance

Struggling British van-maker LDV has been successfully purchased by Russia's Gaz group, with the new owner vowing to save its employees' jobs.

LDV was saved from collapse when it was purchased by equity releaser Sun European Partners seven months ago and though it has enjoyed improved sales, particularly of its Maxus model, Gaz has bought the firm at a time when it is losing £4 million a month.

The new parent company has nonetheless promised that, although it plans to start constructing vans in Russia as well, it will not shut down its Birmingham plant, which would result in 850 jobs being cut.

Company president Erik Eberhardson commented: "We are very excited about this transaction, which represents an important strategic move - expanding our market presence and bringing market leading management talent to the group.

"We believe that this deal will act as a catalyst for further international growth and will enhance our overall business performance."

Gaz announced that it plans to increase production at LDV's Birmingham site by 50 per cent to 15,000 vans a year, as it chases a target of building 20,000 vans a year worldwide by 2008.

The news was welcomed by Transport & General Workers Union boss Tony Woodley, who said that, given the recent tendency for vehicle manufacturers to pull out of the UK, Gaz's committing itself to operations here makes a welcome change.