Press Report : China’s Geely set for control of London Taxi maker

Automotive News Europe/Reuters, 18th March, 2010

Gelly set to take a further stake in LTI

Geely set to take a further stake in LTI

LONDON (Reuters) — China’s Geely Group is set to increase its grip on money-losing London black cab taxi maker Manganese Bronze by taking a controlling stake and moving more of the production of the TX4 cab to China.

Geely, China’s largest privately owned car maker, is also in talks to buy Ford’s Swedish unit Volvo — another of Europe’s venerable motoring names.

Manganese Bronze said it was considering a placing of new shares with 20 percent shareholder Geely at 70 pence per share to give the group a controlling stake, and announced plans to shift production of bodies and chassis for the TX4 from its Coventry plant in central England to Shanghai.

The company said the share placing would give Geely at least a 51 percent stake in the group, which had a market capitalization on Wednesday of just under 26 million pounds ($40 million).

“This is a bit of a turning point for us,” Manganese Bronze’s CEO John Russell told Reuters after the group reported a pretax loss in 2009 of 7.3 million pounds ($10.9 million). “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.”

Hong Kong-listed Geely Autombile has not made a decision on whether to increase its stake in Manganese Bronze yet, a company executive told Reuters.

This is a bit of a turning point for us. 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.” John Russell, CEO, Manganese Holdings PLC

The black cabs that Manganese is now making in China are traditionally associated with London, where licensed drivers must pass a test known as ‘the knowledge’ to show they know all the roads, landmarks and places of interest within a six-mile radius of Charing Cross station.

Competition in the market, once controlled by Manganese’s TX series of vehicles, has heated up over the last 18 months with the entry of the Mercedes Vito model, distributed by Eco City Vehicles.

Eco City has since grabbed a 30 percent slice of the market and in direct contrast to its rival has announced plans to increase production in Coventry and hire more people to meet demand.

Manganese Bronze, which halted dividend payouts in 2008, said that shifting body and chassis production to Shanghai would result in cutting around 60 jobs in Coventry but the TX4 cab would continue to be assembled in England. Manganese said it has already reduced its workforce to around 359 from a peak of around 500 employees before the recession began.

Analysts at Collins Stewart said Geely had come to the rescue of Manganese Bronze, which has struggled with radiator problems, discounting and falling market share.

“Such a move (a placing) would effectively bring in 14 million pounds ($21.50 million) of cash and reduce the group’s dependency on stocking loans as a source of capital,” they said.

[Source: Automotive News Europe]

Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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  1. Mike C says:

    Sad news for a British icon, but the writing has been on the wall since engineers managed to find a way to convert ordinary minibuses/vans to pass the strict London rules. In the provinces, the Vitos and Peugeots are already eating into the TX4’s share.

    The TX4’s infamous fires didn’t help either and sharing the same engine supplier as the ill-fated Maxus is worrying…

  2. Steve McGIll says:

    We can’t even make our own taxis now, how very very sad. We are the laughing stock of the world and will be a bankrupt, worthless nation before long…

  3. Shep says:

    @Steve McGIll
    We already are, thanks to NuLab…

  4. Ian says:

    It’s all about ownership… Peugeot, BMW, Fiat, VW/Porsche, Ford – all have some family involvement. Nobody rich and British is interested in owning industry here (with the exception of JCB).

    Once the monopoly on Taxi supply was gone, the writing was on the wall.

    The boss of LTI appeared on R4 last year to talk about their Chinese venture. At the end of the interview, the reporter advised the presenters that he preferred the new Mercedes taxis. What?!!!

  5. Dennis says:

    I think really that, for a niche model like this to survive, it needs legislation to back it. I mean if the Government passed a law requiring all Taxis in the UK must be London-type, then it would drive sales, save jobs and allow a niche vehicle manufacturer the resources to develop the models.

    However, as for LTi sharing engine suppliers (VM Motori) with LDV, it’s not really a worry. VM are a well-established Italian maker of diesel engines – they supply diesels for all sorts of things, boats, machinery etc. A local firm (Johnson Sweepers) uses them in the Road Sweepers they make. You can think of them as an Italian Perkins.

  6. Arelbe says:

    We’ve suffered only two shades of government since 1914 (apart from a necessary coalition in WW2) and this Tory/Lab century has taken us from Empire to Third World status (definition: a nation who’s assets are all foreign-owned). They shared rule, they share blame!

    Wasn’t it Thatcher who truly sold the nation’s assets to the lowest (but expedient) bidder – us, the British people? What did we do? We bought what the Government supposedly held on our behalf and sold our meaningless shares (as expected) to the hovering wolves of global commerce interested in market share, not UK jobs.

    OK, so that’s a simplistic outline (the detail is much more complicated, complex and horrifying), but everyone of us who’s bought a foreign-made TV while British versions still existed is in some way complicit in our downfall.

    That’s not to say that everything British was wonderful or that there weren’t “good” reasons for our actions but the result is the shambles that we live in today – and it’s going to get worse! We’re as guilty as our leaders, but here’s the point, they were our leaders, supposed to lead! We were badly led by TWO political parties – no one else.
    Why would anyone in their right minds vote for either of them again? The same promises, the same failure. Enough! A vote for ANYone else would be preferable – it’d shake the Establishment to it’s roots. Party politics has let us down, the two-party system particularly so.

    Vote for the PERSON you think will represent YOU best. No-one? Well, then at least go to the polls and spoil your paper. It shows that you would vote if anyone worthy was standing and a spoilt paper IS counted.

    …oh, sorry ’bout that. Rant, rave. OK, OK, so shoot me – it’s a valid set of opinions.

  7. didierz65 Didier Ziane says:

    VM engines have been used in the UK for decades!!! The SD1 2400 Turbo-Diesel used one in the mid 80’s for a start. If I’m not wrong, all Iveco vans use them and so did the first Chrysler Voyager built in Austria for European market. I think their main problem is to have 4 cylinder-heads (1 per cylinder) and it’s costly when HGF arises…

    However, it seems true that Labour has a lot to answer for when it comes to the demise of MGR and LDV. That wouldn’t happen in France or Germany (e.g. the next gen. Clio will be built in France and Opel is safe for now…).

  8. Gary H says:

    Another British icon gone into foreign hands. Mind you, the Swedes are going through the same plight at the moment with Saab and Volvo. I wonder whether the Chinese will re-launch the AEC Routemaster bus? Boris Johnson watch this space!!

  9. David says:

    Really sad news all this. Even our supermarkets can’t support British vehicle manufacturing with the choice of their delivery vans (and, no doubt, company cars as well). How long before Number 10 either goes all green and has a Prius parked outside or the EU influence results in a Mercedes-Benz S Class? No political party gives a jot about vehicle manufacturing in this country as we have seen with the companies already mentioned. Oh, to be French, German, Italian and have more backbone…

  10. Peter Richardson says:

    I saw the writing on the wall 8 years ago when I left the UK for Australia.

    Sadly, since then, MG Rover and TVR have gone to the wall, Jaguar and Land Rover have become foreign-owned and now LTi (once the UK’s largest British-owned car producer) looks to be going the same way.

    I am afraid it just looks worse for the UK financially and I was hoping that I was wrong. Thanks again Mr Blair and Mr Brown!

  11. Dennis says:

    Peter Richardson :I saw the writing on the wall 8 years ago when I left the UK for Australia.
    Sadly, since then, MG Rover and TVR have gone to the wall, Jaguar and Land Rover have become foreign-owned P>

    Jaguar and Land Rover have been foreign-owned for a long time anyway. Land Rover first became foreign-owned when BMW bought the Rover Group in 1994 while Jaguar was bought by Ford around the mid 80’s. Many people seem to forget that Ford is an American company – it’s never been British! I think, as someone said above, it’s not just the past two Labour leaders who are to blame…

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