London's iconic black cabs will be made outside Britain for the first time after Manganese Bronze finally pulled off its long-awaited deal to set up a low-cost manufacturing base in China.
After two failed attempts to find a Chinese partner, which cost the taxi-maker's former chief executive his job in July, the group unveiled plans yesterday to produce 20,000 cabs a year in Shanghai in a money-saving move that could push down the price of London taxis. Its shares, which have almost doubled in anticipation of the announcement, rose 5.5p to 363p.
The company said the £53m deal with Zhejiang Geely Holding Group, which, in just 10 years has become China's ninth-biggest car manufacturer, would secure the future of its British plant in Coventry by giving it access to cheaper components.
Since Rover's demise, London Taxis International, Manganese's main business, has become the biggest UK-owned car maker. It employs 350 at its Coventry site, which makes 2,500 taxis each year. Despite needing the Chinese government's blessing to set up the joint venture, Mark Fryer, the finance director, was confident that this third attempt would succeed. He said the group had axed its previous partner, China National Bluestar, after the state-owned group had failed to secure the requisite licence under a new government automotive policy.
Manganese is funding the bulk of its £19.85m contribution to the joint venture by issuing 5.7 million shares to Geely, which will become the group's biggest shareholder with a 23 per cent stake. Its intellectual property rights have been valued at £5.6m, leaving Geely to invest the rest to build the factory and fit it out.
The group, which is seeking a new chief executive, expects to start making the Chinese cabs in mid 2008. Geely will have the rights to sell the black taxis in Asia, leaving Manganese to concentrate the rest of the world. In reality, all attention will be focused on persuading Chinese taxi drivers to invest in a black cab, putting on ice all of Manganese's other plans to push into markets from Pakistan and Mexico.Reuse content