One of China’s biggest private car manufacturers today snapped up the British maker of London’s iconic black cabs for £11 million.
Mayor Boris Johnson said he was “delighted” that China’s Geely had bought taxi business Manganese Bronze out of administration, “ensuring the continuing manufacture of a world famous, fully accessible and instantly recognisable vehicle synonymous with London.”
Johnson added: “London’s cabbies can now look to the future safe in the knowledge that the TX model taxi will continue to serve Londoners for many years to come.”
Geely already owned a 20% stake in Manganese Bronze, after a joint venture set up in 2006 that saw the UK business buy China-made components and body parts.
But today’s deal sees the Chinese firm ramp up its expansion into Europe’s auto industry; it bought Volvo Cars in Sweden from Ford for $1.8 billion (£1.1 billion) in 2010.
Geely’s financial director, Daniel Li, is to become its new UK chairman. He promised to keep Manganese’s Coventry manufacturing plant open, even though since the company fell into administration in October, 156 staff have lost their jobs.
Speaking at the factory in Coventry today, Li said: “The deal will secure the long-term future of the company and maintain the production, skilled jobs and plant in Coventry. Today we have 107 people working here, and we are confident we will create some new jobs with the recovery of the business.”
One of his first hires was to appoint Peter Johansen, former finance director of Manganese Bronze, as executive vice president of Geely UK’s black cab operations. But Li said it was “too early to say” if any of the 156 staff who lost their jobs would return, adding: “it depends on their skills and the needs of the company. In time we will examine the potential to create new, lower-carbon vehicles which could be exported around the world. But that’s a discussion for a later day.” The Chinese group added it will be looking at new models to follow the current TX4 as well as “examining the potential for entering the private-hire market”.
However, Li warned it would “take some weeks to restart production”.
Manganese Bronze called in administrators PriceWaterhouseCoopers after supply problems with steering boxes made in China, by a firm introduced to Manganese by Geely, led to a recall of 400 of its flagship £35,000 TX4 taxis.
That was on top of reporting four years of financial losses and struggling under increasing warranty costs. Even the worldwide PR opportunity of having the Spice Girls dancing on top of five black cabs at the closing ceremony of the Olympic Games this summer couldn’t turn around Manganese’s fortunes, especially when the company revealed a £3.9 million black hole in its accounts days after the Games that forced it to delay its half-year results.
Manganese hadn’t posted a profit since 2007, struggling in the face of competition from listed Eco City Vehicles, which distributes Mercedes taxis. Manganese had a monopoly on supply to the taxi market until 2008 but now Mercedes-Benz has 40% of the sales.
About 1400 new black cabs are registered each year, with London having almost 23,000 licensed taxis on the road.
Li said all taxis affected by the steering box problems had been fixed and were back on the road.