Lucas sets up European joint-venture motor deals

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The Independent Online
LUCAS INDUSTRIES, the automotive and aerospace group, is negotiating to expand into Eastern Europe through a joint venture to supply braking systems to the Czechoslovak motor industry.

It is also planning a company with Sagem, the French defence and telecommunications group, to develop engine management systems and petrol injectors.

Lucas, which is due to report full-year results and details of a significant restructuring programme on Monday, said financial aspects of the joint ventures had not yet been finalised.

It described the proposed joint venture with Autobrzdy, backed by the Czech Minister of Privatisation, as a 'significant' move into Eastern Europe, where a large expansion of the vehicle industry during the 1990s is predicted.

Since 1984 Autobrzdy has held a licence to produce Lucas Colette disc brakes, which it supplies to Volkswagen-Audi Group.

VAG plans to double capacity over the next four years and expects Autobrzdy to meet its braking system requirements. The necessary expansion is likely to be funded partly by Lucas but yesterday the company could give no estimate of the sums involved.

The joint venture with Sagem, which will have a majority stake, would initially have combined sales of between pounds 30m and pounds 50m in the engine management systems and petrol injectors sectors.

The European market is worth pounds 1bn, and the two companies hope to double their share of it.

Engine management systems are intended to reduce emissions and increase fuel economy using electronic control units, sensors and injectors. Lucas has also developed the Epic fuel injection system for diesel engines, but it is not included in the joint venture.

Lucas and Sagem have had a co-operation agreement in petrol engine management systems since 1990.

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