Geely set for control of London taxi maker
Chinese car maker Geely Group is set to increase its stake in Manganese Bronze, parent of London black cab taxi maker LTI. Geely has already announced a plan to move production of bodies for the TX4 cab to China, and now it is looking to up its shareholding from 20% to a controlling 51% stake.
Geely is China’s largest privately owned car maker, and it is in advanced talks to buy Volvo Car Corporation from Ford. This deal is expected to be finalised in the next few weeks.
Manganese Bronze made a pre-tax loss in 2009 of £7.3 million, and the plan to shift production of bodies and chassis for the TX4 from Coventry to Shanghai is aimed at saving money, including the loss of 60 jobs in Coventry.
The parts will be shipped back to the UK for final assembly here. “This is a turning point for us,” said Manganese Bronze chief executive John Russell. “Seeing the immediate benefits of our relationship with Geely coming through in the TX4 we are now at a point where we can think about building a closer relationship with our Chinese partner."
The TX4’s dominance of the London hackney carriage market has been hit hard in the past
18 months following the launch of the Mercedes Vito model, distributed by Eco City Vehicles, which has taken a 30% share of the London cab market. The Vito uses electric four-wheel steering to meet London taxi turning circle rules. It seats six, and is backed by a full Mercedes-Benz warranty, so it can be serviced at any Merc dealer.
The Geely deal will be funded by a share issue, which would bring in £14m of cash and reduce the group’s dependency on stocking loans as a source of capital. But operators are concerned that the move to Chinese parts will lead to a reduction in quality and reliability.