Hailing a cab back toward profit

BLACK CAB maker Manganese Bronze says it is positioned to return to profitability after a "year of transition" that saw a shift of some manufacturing to China and job losses at its Coventry plant.

The changes - made in conjunction with the formation of a joint venture with Chinese automaker Geely - knocked 3,000 off the cost of building its new TX4 cab. Coventry now assembles the finished product from parts made in China.

As a result, the company cut its operating losses by 73 per cent last year even though tough market conditions saw sales depressed by 5 per cent. At the pre-tax level, Manganese Bronze cut its losses to 6.3 million, down from 7.3m in 2009. The business, which trades as the London Taxi Company, said vehicle sales in the UK were 4 per cent lower last year as difficult market conditions dissuaded drivers from investing in new cabs. Sales followed a similar trend in Scotland.

The company recorded its worst-ever sales month in April last year, when the volcanic ash cloud closed airports and further undermined confidence in the taxi sector.

However, sales in Scotland picked up in the latter half of the year, with about 110 vehicles sold through the wholly-owned London Taxi Company dealerships opened in Edinburgh in June and Glasgow in November.

"That is probably slightly up on the previous year," chief executive John Russell said. "We usually sell between 300 and 400 a year in Scotland, but that fell to something like 150 when the worst of the downturn hit."

The company is aiming to further boost overseas sales after securing its biggest-ever order for 1,000 London taxis which will be delivered to Azerbaijan. This will be supplied by its Shanghai LTI joint venture with Geely, which owns a 20 per cent stake in Manganese Bronze.

The group increased its share of the London black cab market from 75 to 82 per cent. Though Russell said the company was "well positioned" to return to profitability this year, he conceded that conditions would remain difficult.

"We are working on the assumption that (UK] sales will be slightly better than last year, but that any major upturn is going to be in 2012 or thereafter," he said.