Van maker LDV , which has not produced a new vehicle since December, has applied to go into administration.

The news follows a month of turmoil, which saw it in intense negotiations with a potential buyer and a move by several fleet customers that saw them abandon LDV in favour of other suppliers.

All production at its Birmingham factory stopped in December and with all remaining stock now sold, it cannot meet new orders.

The company’s Russian owner Gaz was in negotiations with a foreign investor to try to secure the company’s future, but these now appear to have failed.

The company's CEO Evgeniy Vereshchagin told workers this morning: 

"I have to write to you today to notify you that despite all our efforts over the past few months, we have so far been unable to secure the investment required for the business.

"During the past few weeks, the global economic crisis has forced us to operate in exceptional conditions and we cannot continue in this position without funding indefinitely.

 

"We are still working with potential overseas investors who want to keep production in Birmingham, but they like many people at this time are finding it difficult to secure the necessary funds.

"We must now inform you that the deterioration in the position of the business has forced the directors to apply for administration.

"I must stress that this does not mean the business is in administration yet.

"Our application will be processed on 6 May and we still have until that time to secure funding for our plans."

The manufacturer has done surprisingly well since the economy went into decline and it signalled that it was in serious trouble.

LDV dealers sold over 600 vans this year, which boosted its market share in a declining new van market.

The sales were outright purchase deals to SME fleets, although some were sold to larger fleets such as the AA, which ordered 20 Maxus vans in April.

The AA began trialling LDV vans last year and pressed ahead with the order despite the manufacturer’s problems last month.

In addition, earlier this year, the British-based manufacturer signed a significant 500-vehicle £3-million solus deal with Jewson.

However, with its factory sitting idle for months and no sign of it restarting, Jewson is now forced to source its new vans elsewhere.

Jewson’s parent company Saint Gobain said: “Saint-Gobain can confirm that it will no longer be procuring vehicles from LDV.

"A contingency plan to ensure our vehicle supply requirements are met is in place and this has been implemented immediately.”

This move is now being repeated by other LDV fleet customers.

“This is exceptional circumstances,” said an LDV spokesman.

“Some customers are extending their replacement cycles, which suits them as well as us.

"But we have been losing orders when customers need new vehicles.”

It was hoped a management buyout would save the company, but now all hopes are pinned on a private investor rescuing the van maker.

The spokesman said a potential investor has been found.

It is believed to be Indian-based carmaker Mahindra and Mahindra, but while it carries out due diligence processes before committing, LDV said it cannot confirm who it is or when or if production will restart.

If the private investor agrees to commit to the company, LDV will immediately approach the government for additional funding to develop its electric Maxus van.

In the meantime, the van maker can do nothing but watch as its fleet customers go elsewhere for their new vehicles.