Manganese sells £13m cab call-up service for just £1

Click to follow

Managanese Bronze, the Milton Keynes-based manufacturer of London's black cabs, has waved the white flag on its hi-tech mobile phone taxi service, Zingo.

Managanese Bronze, the Milton Keynes-based manufacturer of London's black cabs, has waved the white flag on its hi-tech mobile phone taxi service, Zingo.

The business, which Managanese spent £13m developing and marketing, was sold to the Singaporean transport group ComfortDelGro yesterday for £1 - half the minimum fare in a black cab. ComfortDelGro already owns Computer Cab, with 3,000 black cabs, in London.

The British company also admitted it may end altogether the production of cabs in the UK, in favour of China.

Zingo allows customers to locate a black cab by calling a central number, which connects them to the nearest driver. Anyone with a UK-registered mobile phone can use the service. The trouble with the system was that, initially, there were not enough customers to encourage drivers to lease the technology.

By the time 100,000 customers were using the service, 10 per cent of taxi drivers had returned the equipment, leaving less than 1,100 taxis to service the customer base. Analysts believe this number was about half that required to make Zingo profitable.

In spite of the token sum Zingo was sold for, Manganese remains confident that at least some of its costs will be recovered, as it is still entitled to 50 per cent of any future profits Zingo might make.

The sale means that Manganese will almost certainly become immediately profitable, as Zingo costs would have been about £4m in the current year. But some observers warned the sale and profit-sharing agreement with ComfortDelGro could be a sign that Manganese Bronze may move away from manufacturing.

Manganese is in negotiations on joint ventures in Mexico and China. While the Mexican deal will probably involve building cheap taxis for the local market, it is possible that, if successful, the Chinese operation could take production of black cabs out of Coventry, where Manganese employs 300 people.

Ian Pickering, the chief executive, said: "It is difficult to reduce manufacturing costs in the UK. Moving to China is clearly a long-term possibility."

He said the company hopes to start production in China in 2006.

Comments