Why the UK's van makers are disappearing over the horizon

LDV's collapse yesterday may mark the final chapter in the story of a British industry. Sean O'Grady reports

The collapse of the LDV vans business yesterday is more than the small, deeply sad, tale it first appears – the inevitable closure of an ancient facility that can trace its roots way back past its recent Russian owners, Gaz, via management buyouts, multiple administrations and private equity ownership, back to Daf motors of Holland, British Leyland and, before that, Morris and Wolseley Motors. This business was lucky to survive for as long as it did, which is to say the 95 years it occupied the Washwood Heath site in Birmingham.

But the end of LDV (the initials derive from its 1980s name, "Leyland Daf Vans") highlights the plight of an important, hitherto successful but unglamorous corner of the industrial scene: our van-making industry. Suddenly, it is kaput.

We used to have three strong, or at least significant, "home players". Soon there may well be none.

A few months ago Ford announced that the vast majority of production of its long-standing market leader, the Transit, would be transferred from Southampton to Turkey. The Transit routinely commanded a good third of the market.

Last week saw the future of the Vauxhall vans plant at Luton, which also makes products badged as Nissans and Renaults, placed in jeopardy, after the Russian and Austrian/ Canadian Gaz-Magna consortium completed its purchase of GM Europe's operations. Odd, that Gaz should be jettisoning one UK van maker while acquiring another, and a mystery is yet to be solved. Perhaps both designs will find their way to Gaz's facility in Nizhny Novgorod.

In all events, Vauxhall accounted for another 20 per cent of market share. LDV, before its difficulties, was commanding 2 per cent of the market for smaller vans, and a respectable 7 per cent for larger vehicles.

So the van market was supplied handsomely by the "home team". Almost 100 per cent of the trucks sold in this country are now manufactured abroad, and about 85 per cent of the cars, but the foreigners had been kept at bay in the van trade, with import penetration limited to less than 50 per cent. That front, too, is crumbling.

The recession has demolished van sales even more than cars; they are down about 60 per cent on last year. Few could survive that without a strong, and willing, parent. LDV had Gaz – a Russian outfit controlled by Oleg Derispaka, a Russian oligarch whose yacht famously played host to Lord Mandelson and George Osborne. Meanwhile, the finance of the Magna-Gaz takeover of GM Europe – including the Vauxhall vans factory – came from Sberbank, some 60 per cent owned by the Russian state, and thus an instrument of Vladimir Putin's power. Politics and business seem intertwined, as they often are when the Russians are around.

After an abortive deal with the Malaysian Weststar group, LDV has been left orphaned and abandoned. With Ford going and Vauxhall in danger, it may not be alone for long. The global auto industry has far too much capacity – but an awful lot of the necessary adjustment seems set to be inflicted on the UK.

What will it mean? Well, the fact is that we will leave the recession with an even smaller manufacturing sector than we entered it, which, at 15 per cent, is about as small as it gets in a modern economy. Not much sign of "rebalancing" there.

LDV was a resourceful operation and, if only for that reason, might have deserved more public support – of the kind many of its competitors receive. LDV's last product, the Maxus, was pillaged from a failed Daewoo project in Poland a decade ago, and the tooling and assembly lines were shipped to the UK in a remarkable reversal of the usual pattern. It was modern and had potential, though the recession overshadowed it. Before that, LDV lived on updates of the creakingly old Leyland Sherpa van, launched in 1974, and itself based on products dating back to the 1950s.

So when the UK recovery does arrive it will delivered by foreign trucks and vans, often made by companies in receipt of lavish state aid. Think of what the German government is doing for Opel, President Barack Obama for GM, the French for Renault and Peugeot, not to mention the Russians' support for Gaz.

Meanwhile, some 850 LDV staff will lose their jobs; thousands more will go among suppliers and local businesses, and this deprived part of the Midlands will need to find another reason to exist.

White Van Man Why is he in such a hurry?

The fastest vehicle on the motorway? Obviously a van. Probably a Vauxhall Astravan in fact, which is really much closer to a car than a van, and which offers "superb comfort, performance and handling" according to the Vauxhall website. (They're right, by the way.) Or it could be a Ford Transit, a Mercedes-Benz Sprinter (the clue's in the badge there), or the magnificently named Vauxhall Movano. (Wasn't that the code word on that Reeves and Mortimer quiz?)

So the White Van Legend goes, whatever has just cut you up will have a copy of The Sun lodged in the front window, a pack of Pall Mall rolling around the dash, a selection of Mars bars and Ginster's Steak Slices in the glove box for those peckish moments on the move, and an England flag somewhere. The rear view mirror is only used in its literal sense, to gain a better view of the rears of recently passed pavement tottie. On the rear of the van is to be found the wholly rhetorical query "How Am I Driving?".

There are "No tools left overnight" , (though obviously you can often find some sort of tool at the wheel during working hours). A pit bull is co-pilot.

Yet it is a caricature. A Ford poll a few years ago found that 74 per cent of White Van Men found the term insulting. The definitive White Van Man is male, about 42 years old, married and wants to retire early. A significant number favour organic foods. His favourite drink is beer and he doesn't smoke. He feels he is professional. And just remember that he isn't really driving a van at all, but the very wheels of enterprise. He is the Alan Sugar of tomorrow.

No wonder he is in a hurry.