LTI blames ash for sales fall
Posted by admin on May 15th, 2010
Source: Times Online
Black cab maker cuts 60 staff as sales slump Manganese Bronze blames downturn on end of car scrappage, new showroom tax and impact of volcanic ash on airport traffic Robert Lea, Industrial Editor Sales of the London’s famous black cab have slumped as its maker blamed a litany of market reversals, including the volcanic ash cloud. Manganese Bronze also revealed that it was cutting 60 jobs at its plant in Coventry.
In a statement at its annual meeting, the company said that sales had fallen by nearly 11 per cent this year. In the year to the end of April, total sales fell to 623 vehicles against 699 in the same period in 2009. The company said: “The current level of weekly orders is lower than our expectations. Trading in April has been particularly disappointing having been impacted by a week of lower earnings for taxi drivers from the Icelandic volcanic ash fallout with airports being closed.
“These negative factors were additional to the cessation of the Government’s scrappage scheme from the end of March and the introduction of the Government’s new showroom tax [charging new vehicles on the level of their CO2 emission] which has added almost £350 to the cost of a vehicle from April 1.”
It added: “Earnings continue to be negatively impacted by the weakness of sterling, which has increased the cost of engines purchased from Italy and the lower level of sales.”
It made no mention of how the new black Mercedes-Benz cabs on the roads of the capital and elsewhere have eaten into the traditional black cab market.
Manganese is in the process of ceding control to Geely, the Chinese motor group that recently bought Volvo from Ford. That deal will see its Coventry plant cease manufacturing the taxi bodywork — now to be made in Shanghai and imported — at the cost of 60 jobs. Manganese said that taking this process out of Coventry, which involves simply assembling mainly imported parts, will produce cost savings of £2,000 per taxi or £4 million a year.
Manganese shares — which are soon to transfer to the AIM market — fell to new lows, down 2p at 52p.