TX4 taxi to make Chinese debut
May 20 2008 By John Cranage, Automotive Correspondent
Manganese Bronze, the Coventry-based manufacturer of London taxis, has spelled out the potential of its Chinese joint venture.
A "notable achievement" in the past month has been the listing of the the TX4 taxi in the Chinese National Development and Reform Commission Gazette.
"This means the TX4 can now be officially sold in China," the company, which trades as London Taxis International, or LTI, said in a trading statement.
The company has said previously that it is looking to China to secure its long-term future. It has set up an operation in conjunction with Chinese carmaker Geely to build TX4s in Shanghai.
None of the vehicles built in Shanghai will be imported into the UK, but the venture is regarded as a potential springboard into other Asian markets.
LTI is, however, looking to China as a source of cheaper components to ship into its Holyhead Road factory in Coventry.
The company said: "Our joint venture in China, Shanghai LTI, offers the greatest potential to secure the long-term profitable future of the group.
"We are very pleased to report further excellent progress with the start of prototype production on schedule and just weeks away.
"Contracted procurement savings are in line with market expectations with the impact of lower cost Chinese parts generating a positive contribution in the second half of 2008.
"Significant progress has been achieved in developing the sales infrastructure in China and elsewhere in the Asian region with Geely appointing its extensive network of dealers to sell our joint venture TX4 product."
Manganese Bronze and Linkstate Overseas, a wholly-owned Geely subsidiary, have set up an interlinked shareholding structure and the British company has realigned its financial year to match that of its Chinese counterpart.
Manganese Bronze went on to say that strong demand for its iconic London taxis and lower-than-expected launch costs of its scheme to make the cabs in China should help to keep full year profits at least in line with expectations.
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Uncertainty in the financial markets is, however, denting sales in London, the company’s core market.
Cabbies in the capital are hearing so much about the credit crunch from their City-based passengers that they are putting off buying new vehicles, the company said last month.
Although the market doubts pulled first quarter sales below levels seen in the same period last year – which benefited from the UK launch of the TX4 – April trading continued in line with the group’s expectations and its balance sheet remains strong.
It recently signed memoranda for an additional 2,500 vehicles over a period of three years with deliveries due to start in early 2009.
It also has "a significant pipeline of further potential customers".
"Shanghai LTI remains on plan to deliver a step change in the group’s prospects and financial performance, with significant profit contributions for 2009 and onwards from procurement savings and international sales," the statement went on to say.
Manganese said it had made encouraging progress with international orders.
It said it had recently signed memos for 2,500 vehicles over three years with first deliveries beginning in early 2009, in addition to memos for 500 vehicles with a similar timeframe and delivery schedule that it announced in April.
"There remains a significant pipeline of further potential customers," it added.
It said it has signed a development agreement with electric commercial vehicle manufacturer Tanfield Group to develop a battery powered, zero emission urban taxi, the TX4E.
No wonder sales are down no one wants the sheit thats off the road more than on it and it only does 23 to the gallon
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