China’s privately owned automaker Zhejiang Geely Holding Group Co is reported to have submitted a bid to take a controlling interest in Manganese Bronze Holdings PLC, the maker of London’s iconic black cabs, which fell into administration in late October.
Geely, which made its name in the Western market by purchasing Swedish luxury car brand Volvo in 2010, is bidding for 80.03 percent of Manganese, Bloomberg reported on Thursday, citing anonymous sources.
The report did not disclose how much the company is offering to pay to increase its stake from its current 20 percent, and Yang Xueliang, a spokesman for Geely, also refused to comment on whether the company was in talks with PricewaterhouseCoopers, the Manganese administrator.
Manganese Bronze is a British brand with long history, and an expert in producing taxis, said Yang.
“Since becoming a shareholder in 2006, Geely has always backed Manganese Bronze’s development and will support the company to go further.”
After buying stakes in Manganese in 2006 and 2010, Geely holds 19.97 percent of the 64-year-old cab maker and 52 percent of their taxi joint venture in Shanghai.
“More important, we see a bright future and huge potential of Manganese Bronze’s functional taxi business both in China and overseas,” said Yang.
The cabs manufactured in the Shanghai joint venture, which have large insides, were used as wheelchair accessible taxis for the Beijing 2008 Olympic Games and the Guangzhou Asian Games in 2010.
The venture also provides components and body parts to Manganese to assemble black cabs in Britain.
“If Manganese Bronze can survive this crisis, we hope that it can change its models over to new energy-powered cars with low emissions,” said Yang.
“They should also expand their business into more markets as we see an increasing demand for this niche vehicle, due to the needs of people with disabilities, globally and in China.”
The black cab maker was put into administration in October, putting almost 300 British jobs at risk.
It said talks with various parties to secure last-minute rescue funds had ended in failure.
The company has experienced big drops in demand for its black cabs in recent years due to fierce competition in its home market.
Mercedes-Benz’s Vito taxies have already grabbed a 30 percent share of London’s cab market, while Toyota and China’s BYD are also grabbing market share through their new energy-powered taxis.
Manganese sales in the first half of this year declined from 748 vehicles in 2011 to 577 in the UK market, with global sales dropping 141 vehicles to 1,081.
Its finances were hit hard earlier this year after it discovered a safety defect in its new TX4 model, which led to a recall and a halt in sales.
Auto analysts said they favored a move on the company by Geely, given its ambitious overseas plans.
Manganese’s share price has dropped from about 80 pence ($1.3) in March 2010 to 10 pence on October 12 when it suspended trading on the London Stock Exchange.
This has always been the obvious next step and it is a real shame that Manganeze had to go into administration first.
Manganeze needs to be part of a large automotive company with R&D resources, and needs an owner capable of making investments in new product. It also needs an owner with distibution capacities, particularly in emerging markets.
The sooner this takeover is completed the better for ensuring the continuance of the London Taxi brand and those jobs remaining in the UK.
If they do take over it will be good news obviously for the cab drivers but over the next few years we will start using parts from china and ultimately they will be sub standard making the cab we own even more unreliable than it already is
I can also see long waiting times for parts bring shipped over from china and garages will only stock those parts which have a high turnover so if this goes through it is only a short reprieve for drivers like my self who have invested in a new vehicle as our warranty will I hope be reinstated so let’s not get too exited just yet
@ Bally boy – There is no reason why Chinese parts will be any lower quality than those made in the UK (although they will certainly be cheaper).
There was an issue with one specific batch of parts, these things happen.
Does anyone know who the Chinese supplier of the faulty steering units in the TX4 were? I have been trying to find out but they are never named anywhere. I am assuming it was not Geely, although I would like to confirm this.
Anybody know any suppliers of TX4 spare parts from china ?