Chinese carmaker Zhejiang Geely Holding is to take a controlling stake in taxi manufacturer Manganese Bronze.
Geely – China’s largest private automaker – is to increase its participation in Manganese Bronze – which makes the iconic London cab – from 19.9% to around 51% subject to shareholder approval.
As well as the participation increase, Geely will also take over the TX4 cab chassis and body production, with manufacture shifting to its existing joint venture with Manganese Bronze in Shanghai.
The move, which follows the decision of Manganese Bronze’s primer coating supplier to cease production from August this year, will result in the loss of 60 jobs, although the TX4 will continue to be assembled in Coventry.
“It [Manganese] will still be listed on on the Alternative Investment Market and shareholders will still have a big say,” said a source close to the situation.
“Manganese has suffered from hard finance through the credit crunch – not from their banks – taxi drivers have struggled to secure financing. If they can delay buying a new taxi, this has caused problems.”
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It is also understood Manganese will introduce a saloon-type cab to the market, although there are no plans yet to roll out the model in London.
“It is a saloon car that will use the recognised features of the current Hackney carriage [and] will have more space in the back seats,” said the source.
The taxi maker’s decision to cede overall control comes after the company announced an operating loss yesterday (17 March) of GBP7m (US$10.7m), citing “challenging market conditions.” Discounts and sales incentives of around 5% represented half that operating loss.
“2009 was a difficult year for our UK taxi manufacturing operation with significant discount and sales incentives to stimulate the market combined with price pressure and restricted terms from fragile UK suppliers,” said Manganese Bronze CEO John Russell.
“Our UK consultation process is almost complete which will lead to a smaller lower cost UK operation with a much greater level of supply from China.”
Manganese Bronze has sold some 200 taxis through the UK government’s scrappage scheme.