London Taxi plan hits the skids
BY HAITHAM RAZAGUI | 25th Oct 2012
The collapse was reportedly caused by the company’s failure to secure a cash injection from Chinese partner and 20 per cent stakeholder, Geely.
Woes for the loss-making company were compounded by a recent safety recall affecting 413 taxis in Britain and other countries, due to a potential fault with the steering box, forcing London Taxi to recommend that affected vehicles not be driven until fixed.
Manganese Bronze last turned a profit in 2007 and has since lost £18.7 million ($A28.9m), including a £3.1m loss in the first half of this year – for which records were published late due to an accounting error resulting in a £3.9m “understatement of historical losses”.
A company statement issued on Monday said: “Discussions with various parties to secure funding on acceptable terms to address the Group’s financial needs have proved unsuccessful. The board has therefore concluded that the group is no longer a going concern and has filed notice of intention to appoint administrators.” However, Manganese Bronze is optimistic that the taxi business can emerge under new ownership.
“The board remains hopeful that the fundamental strengths of the company, the TX4 model and its global reputation will provide the platform for a successful business in the future,” said the statement.
In addition to pressure arising from the GFC and the subsequent economic downturn in Europe, the traditional ‘Hackney Carriage’ has come under attack from converted Mercedes-Benz Vito vans – and Nissan also has plans to launch a competitor based on its NV200 van.
Manganese Bronze responded with a push into export markets – which, as GoAuto reported four weeks ago, was set to include Australia – but this was too little, too late and the safety recall apparently proved the final straw.
British reports also point to quality concerns arising from the increasing Chinese-produced content in the taxis.
The company says it remains committed to “a speedy resolution of the product recall” and promised it will continue to look after affected customers throughout the administration process.
As well as telling drivers not to use them, London Taxi advised British transport authorities to suspend the operating licenses of affected taxis.
The company recommends drivers “make arrangements to share or rent another black cab to mitigate their losses and retain an accurate record of any costs incurred”, and has offered “temporary assistance” to affected drivers.
Asked for more details on the situation and its impact on Australian import plans, the international marketing manager for The London Taxi Company, Maria Holmes-Keeling, told GoAuto “we are working though the issues and towards a solution”.
Earlier this month, Ms Holmes-Keeling told GoAuto the company was undertaking due diligence to bring the TX4 to Australia and hoped to make an announcement in the near future.
She did not say whether the Australia-bound taxis would be produced in China, where the vehicle is sold as the Geely Englon TX4.
In addition to Britain and China, the TX4 is sold in various locations around the globe, from the US and Europe to the Middle East and South Africa.
Albury-based Drive Systems International supplies automatic transmissions for use in the vehicle and could be affected if London Taxi cannot be revived, and about 300 British jobs are reportedly under threat.
