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LucasVarity Wins Diesel Commitments; Withdraws From Volkswagen Injector Program

11 December 1997

LucasVarity Wins Major Common Rail Diesel Commitments; Withdraws From Volkswagen Electronic Unit Injector (EUI) Programme

    LONDON, Dec. 11 -- LucasVarity plc (London: LVA, NYSE: LVA)
announced today that its Diesel Systems division has won customer commitments
worth in excess of 500 million British pound sterling to supply common rail
fuel injection systems to Ford Motor Company and Renault S.A.
    The programme to develop an Electronic Unit Injector (EUI) diesel
injection system for Volkswagen, announced by Lucas Industries in 1995, will
not be taken through into production.  While the system would have met the
engineering criteria of the customer and LucasVarity, it does not satisfy the
company's Economic Value Added (EVA) criteria for approval of production
investment.
    Dominique Chauvin, managing director of Lucas Diesel Systems, said: "The
majority of vehicle manufacturers are now choosing common rail fuel injection
systems for their future car diesel engines, and we are delighted to be able
to announce contracts with two of the world's leading carmakers.
    "Our system is world class, and outperforms the competing products which
will soon be going into production.  We anticipate additional significant
common rail business in due course.  Demand for the EUI system is growing
strongly in the truck market and we have profitable EUI business confirmed in
the sport utility sector."
    Lucas Diesel Systems is the world's second largest manufacturer of diesel
fuel injection systems, serving the car, van, truck, bus, agricultural,
industrial and marine sectors.
    The LucasVarity Common Rail (LVCR) is designed to meet the stringent
emissions requirements of Euro 3, US 98 and beyond.  The system is the
integration of a high pressure pump, high precision electronically controlled
injectors, a rail which serves as a common pressure accumulator, an electronic
control unit and a filter unit.  This innovative design reduces emissions and
noise, and improves fuel economy and driveability.

SOURCE  LucasVarity plc