Taxi maker plunges into red as cabbies hit the brakes

Published on 29/07/2009 21:42

NERVOUS cabbies are reluctant to commit to buying new vehicles amid worries over the recession, the maker of the iconic London taxi has warned.

Manganese Bronze – whose TX4 cabs can cost up to 35,000 – said yesterday it had swung 600,000 into the red in the first half of 2009 from a 1.5 million profit last year after an 11.5 per cent fall in vehicle sales.

The firm is pinning its hopes on its Chinese joint venture to boost international sales while returning the UK business to profitability. Manganese's Coventry-based London Taxis International (LTI) makes the TX4 but cut staff by almost 20 per cent last year. Workers also agreed a 10 per cent pay cut.

Chief executive John Russell said: "UK sales performance continues to be challenging as driver's confidence to commit to the purchase of a new taxi remains weak due to uncertainty about the state of the economy."

The company hopes to sell some 1,000 cars in China this year, with its joint-venture partner lobbying local government and taxi operators to adopt the Shanghai-produced model.

The business was hit last year with a spate of engine fires for the TX4, which forced it to recall and refit almost 6,000 cabs at a cost of 3.8m. The group said the recall was virtually complete and it had managed to claim back 1.1m from third parties.