Overnight came the news that Geely (one of the few Chinese car companies with no product recalls last year) is set to take a controlling stake in Manganese Bronze, the makers of London’s black cabs.
Geely and Manganese Bronze already have a partnership, with Geely building taxis in Shanghai. Some London cabs were introduced in Beijing before the Olympics. Perhaps Shanghai will get some for the Expo?
At any rate, Manganese Bronze is suffering increased competition at home, where Eco City has grabbed a third of its market, and has also seen orders drop since the financial crisis. To refinance, it will issue new shares that will allow Geely to increase its shareholding from 20% to 51% and will shift production of the chassis and body of the cabs to Shanghai, resulting in 60 job losses in Coventry. However, the TX4 cab will still be assembled in the UK.
For Geely, it is difficult to see the commercial sense of the deal. Why would it want control of an ailing British taxi manufacturer? Is it planning to release London cabs on the Chinese market (let’s hope so)?
One clue came in a quote from Mark Fryer, the finance director of Manganese Bronze. “This is going to revolutionise the company,” he said. “Our future will be both as a manufacturer of black cabs in Coventry, although more of the parts will be coming from China, and as an assembler and distributor for Geely vehicles.”
So perhaps the deal gives Geely an entry point into the UK market, a small factory in Coventry for assembling its own cars, and a distributor?
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