Taxi Driver Online

China hails black cab agreement

The iconic cab could be a regular sight in Chinese cities by 2008
One of the biggest manufacturers of the iconic London black cab has signed a £53m joint-venture agreement to build the car in China.
Manganese Bronze's proposed new plant in Shanghai will be able to make up to 20,000 taxis a year.

The vehicles are earmarked for China and other emerging car markets.

The firm will retain its London Taxis International plant in Coventry, which has made more than 100,000 black cabs since production began in 1948.

A legally-binding agreement between Manganese Bronze and Chinese carmaker Zhejiang Geely is expected to be signed in the next few weeks.

'Increase appeal'

The London black taxi is an iconic vehicle

Li Shufu, Zhejiang Geely chairman

The UK firm will invest £19.85m as its share of the venture and will have the rights to sell the cars to markets outside of Asia.

Finance director Mark Fryer said that the deal, when finalised, would "increase the appeal of our iconic vehicle around the world".

"There are more than one million vehicles used as taxis in China, and the London taxi will add to the choice available to the Chinese consumer," Mr Fryer said.

"Big cities such as Beijing and Shanghai offer major opportunities but Geely has more than 1,000 dealerships across China so it's a truly nationwide prospect."

As well operating as regular taxis, the vehicles will be sold as limousines to hotels and to wealthy private owners.

Chinese optimism

Last year Manganese sold 2,412 black cabs, with price tags between £22,000 and £30,000.

The high cost of vehicles as well as export fees have made overseas growth difficult.

Mr Fryer said that some of the parts bought by the joint venture may be shipped to the UK making the operation at Coventry "even more viable".

"There will be no redundancies as a result of this," he said. "If anything we will be recruiting people to support the joint venture."

Zhejiang Geely, which began making cars in 1996, has seen car demand grow by 50% in the last six months and its chairman Li Shufu welcomed the proposed deal.

"The London black taxi is an iconic vehicle and we believe that the joint venture can create significant value for shareholders of both sides," he said.

"We look forward to a significant export opportunity and we are confident that the joint venture will be a success."

Hong Kong already has London taxis which were made elsewhere and shipped to the territory.




http://news.bbc.co.uk/1/hi/business/5405354.stm

hmmmm, isn't this how the china deal with MG Rover started off a couple of years ago? and look what happened there.

"As well operating as regular taxis, the vehicles will be sold as limousines to hotels " do they have travel lodges in china?

I have never considered any LTI vehicle to be qualified as a limousine? Perhaps the LTI sales team deserve some credit in convincing the Chinese that the TX models are something they aren't?

Regards

JD

Has anyone, or does anyone know anyone, who has bought a TX for £22,000 new?

_________________
IDFIMH

So does this meen that the Chinese cabby will be the same as the London cabby ? sorry mate not going in that direction ! South of the river, might never find my way back !

Do you do any work GBC as every time I take a peak you are the system ??

Grumpy old git

i've got an official press release from them LTI will post it on here tomorrow...if its any use......?

goes into more detail explaining shares and how the associates sell into the Asian market place only, but LTI can sell the cabs made there else where in the world....hmnn but which market place......?

Blimey, and what happens when your the gear box or timing chain pack in now, it will be like going to your local ch-inky and placing an order
22 and 56 and 78 with 67 and a 14 for good measure
I hope they know what there in for

I've never been a fan of the overpriced piece of junk manufactured by Manganese Bronze. Likewise I've never been a fan of those councils and licensing authorities who help insulate LTI from competition and deprive Taxi drivers and the public of a greater choice of modern vehicles.

We have known for some time that Manganese Bronze has been looking for a Far East partner to manufacture parts and build the Icon on cheap labour in order to compete in the world market place.

When Ian Pickering, the chief executive of Manganese Bronze, unexpectedly parted company in August this year we all new there had to be a more reasoned excuse than the one offered by the group's chairman, Tim Melville-Ross?

I think the Independent Newspapers opinion that it was the failure of Ian Pickering to secure a Far East contractual partner that brought about his demise is close to reality. However, I think the Independent's observation may only be a contributing factor because I would not put it past Ian Pickering to have told the Manganese Bronze board that the prospects of selling an overpriced specialised vehicle to third world consumers is practically nil.

You only have to look at the failure of LTI to break into other world markets such as the USA, where in 2003/4 they sold 168 vehicles. The price of a brand new "New York" Cab is half that of a TX2. The only market Manganese Bronze can sustain is in the UK, they can only do that with the help of Mr Livingstone in London and some other licensing authorities in the provinces who retain the Turning circle condition.

Moving on to the Far East, Manganese Bronze and their new business partner Zhejiang Geely Holding Group plan to produce 20,000 vehicles per year from 2008 onwards with the hope of selling them to the mainly Asian Market.

Susie Mesure, of the Independent writes

"Despite needing the Chinese government's blessing to set up the joint venture, Mark Fryer, the finance director, was confident that this third attempt would succeed. He said the group had axed its previous partner, China National Bluestar, after the state-owned group had failed to secure the requisite licence under a new government automotive policy".

"Manganese is funding the bulk of its pounds 19.85m contribution to the joint venture by issuing 5.7 million shares to Geely, which will become the group's biggest shareholder with a 23 per cent stake. Its intellectual property rights have been valued at pounds 5.6m, leaving Geely to invest the rest to build the factory and fit it out. The group expects to start making the Chinese cabs in mid 2008. Geely will have the rights to sell the black taxis in Asia, leaving Manganese to concentrate the rest of the world. In reality, all attention will be focused on persuading Chinese taxi drivers to invest in a black cab, putting on ice all of Manganese's other plans to push into markets from Pakistan and Mexico".

So how sound are the aspirations of Manganese Bronze and Geely?

Labour costs are an integral part of sustaining most business models but how cheap must the product be before it becomes a viable selling proposition in China? The main reasons why no one buys an LTI vehicle in the UK unless they have to, is because of price and comfort.

In China a new Jetta which is commonly used for Taxi services sells for ten thousand us dollars the equivalent being five thousand pounds, compare that to the fifty five thousand dollars of a new TX2? The price chasm is immediately apparent so we ask ourselves can the LTI vehicle be manufactured and sold at a price, which is competitive, and still make a profit? The answer to that is an emphatic no. We then ask ourselves if the vehicle cannot compete on price with the traditional Chinese saloon Taxi market then what other profitable markets are obtainable? The answer to that is none.

The reason being is that vehicle purchase as in every other sphere is governed by economics and if your only taking home 50 pounds a week then you're unlikely to purchase a vehicle that is far and away more expensive than every other vehicle.

The two articles below highlight the economics of the Chinese Taxi driver but to give you an insight, the flag fall is $1.25 for the first three km and 25 cents for each km after that. This works out at approximately 66p for the first 3 km and 13p for each km after that. I think these guys would be hard pressed to buy a rickshaw never mind a TX2.
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Taxi-fare hikes approved

By Liu Weifeng in Beijing; Miao Qing in Shanghai (China Daily) Update April 2004

Beijing seems set to raise taxi fares from 1.6 yuan (20 US cents) to 2 yuan (25 US cents) per kilometre.

At a public hearing yesterday, 56 per cent of attendees agreed to the pricing plan, which aims to offset the impact of up-to-50 per cent hikes in fuel prices since 2000.

The plan was submitted by the Beijing Municipal Transportation Bureau to the city's pricing regulator earlier this month.

"We are trying to find a solution so that taxi companies, drivers and passengers share the rising costs," said Ding Baosheng, director of the transportation bureau.

Organised by the Beijing Municipal Commission of Development and Reform, the hearing invited 25 representatives from business operators, drivers, consumers and experts. Ten city residents attended the hearing as observers.

To reduce the impact of higher costs, taxi companies and the government have been subsidising drivers since 2000, said Hu Yongxin, manager of Xianglong Taxi Company.

The subsidies range from 500 yuan (US$63) to 670 yuan (US$84) each month. But when the new fares come into force, the subsidies will be lowered as drivers are expected to benefit from the rising fares.

But according to Wang Qianhu from the China Consumers' Association, this means "transferring the rising cost directly to consumers."

He criticised some companies for seeking compensation while conveniently ignoring falling car prices, which have considerably reduced their operating costs from a decade ago.

For example, a Jetta is sold at about 80,000 yuan (US$10,000), less than half the price 10 years ago.

"I hope the pricing regulator takes all cost-related factors into account so that the new pricing plan can be reasonable and acceptable to all sides," Wang added.

Li Yong, a member of the municipal political consultative conference, said raising taxi fares is not the only solution; the government should also consider other energy-saving measures such as restricting the number of cruising taxis and encouraging call taxis.

Many taxi drivers are reportedly opposed to the new pricing plan for fear the rising fares will turn more customers away to unlicensed cabs, estimated at 72,000, compared to 66,000 licensed ones.

At a similar public hearing held in Shanghai this month, most participants supported fare hikes.

But many suggested that local taxi companies shoulder more of the costs rather than passing them on to passengers.

Fares have not been raised in Shanghai since 1998, but operation costs have risen by up to 38 per cent, mostly because of soaring oil prices. The flag-down fare is now 10 yuan (US$1.2) while the price per kilometre beyond 3 kilometres is 2 yuan.
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Beijing Starts Taxi Fare Hike

Beijing's first taxi fare hike in six years starts today, raising the price per kilometer after the four-kilometer base from 1.6 yuan (20 US cents) to 2 yuan (25 US cents).

The base rate will remain 10 yuan (US$1.25).

The process will last until June 30 during which taxi companies will change fare devices and price labels, and taxis that show the 1.6-yuan fare window tag will continue to run under the old system.

The 2-yuan fare conversion will be completed on June 30.

The 3,000 smaller taxis that charge 1.2 yuan (15 US cents) per extra kilometer will be phased out by the end of this year.

Beijing Municipal Commission of Development and Reform announced the hike yesterday after a public hearing last month.

The fare rise aims to offset the impact of up to 50 percent increase in fuel price since 2000.

Sources with the commission said the hike was in line with the decision of the central government to urge local governments to come up with solutions to ease the impact caused by the rise in oil price worldwide.

'The principle is that taxi companies, drivers and passengers should share the impact,' the commission said.

Official statistics indicate the fare adjustments will affect about 63,600 taxis in the city.

Taxi fares in Beijing have remained unchanged since 2000, but oil price has increased from 3.2 yuan (40 US cents) a liter in late 2000 to the existing 4.65 yuan (57 US cents).

During the previous oil hike, taxi companies and the government have been subsidising drivers since 2000 to reduce the impact of higher oil costs. The subsidies range from 500 yuan (US$63) to 670 yuan (US$84) a month.

After the new fare system is in place, the subsidies will be lowered as drivers are expected to benefit from higher incomes.

But taxi drivers are worried that the fare rise may push more passengers into illegal taxis, whose number is estimated at 70,000.

The government has urged the taxi companies to protect the rights and interests of taxi drivers and bring them under the umbrella of social security. The companies should not ask the drivers to shoulder the cost of changing the meters.

Shanghai raised its taxi fares earlier this month. The base price downtown is now 11 yuan US$1.38 for the first 3 kilometers, up from 10 yuan (US$1.25), during most of the day. After 11 PM, the base fare is 14 yuan (US$1.75), up from 13 yuan (US$1.63). Charges for each additional kilometer edged up to 2.1 yuan (26 US cent) from the previous 2 yuan (25 US cents).

2006/05/20
Source: China Daily

Wednesday 4 October, 2006


MANGANESE BRONZE SIGNS HEADS OF TERMS
WITH ZHEJIANG GEELY HOLDING GROUP CO., LTD. FOR CHINESE JOINT VENTURE

Manganese Bronze Holdings Plc is pleased to announce that it has signed Heads of Terms with Chinese car manufacturer Zhejiang Geely Holding Group Co. Ltd. (“Geely”) to establish a joint venture company to produce the iconic London black taxi in Shanghai.

The Heads of Terms, which are not legally binding, establish the intention of producing definitive legally binding agreements within the next few weeks. Total investment in the joint venture is forecast at £53 million of which Manganese Bronze’s share is £19.85 million. The investment will cover the purchase of land (£9.0 million) intellectual property (£5.6 million) and fund construction and factory fit out. Final assembly and sales will be undertaken by Shanghai Maple, a subsidiary of Geely, which will have the right to sell these vehicles within Asia, while Manganese Bronze will have the right to sell them in the rest of the world.

Manganese Bronze will satisfy its investment by licensing its intellectual property rights valued for the joint venture at £5.6 million and issuing 5.7 million new ordinary shares to Geely (representing 23.0% of Manganese Bronze’s enlarged issued ordinary share capital) based on a valuation of £2.50 a share (with £14.25 million being invested by Geely in the joint venture). The valuation is based on the share price when this transaction was initially negotiated and represents the average share price for the last six months. The shares and intellectual property secure an initial stake of 37.6% in the joint venture. Geely will fund the joint venture total cash investment of £38.4 million, with Shanghai Maple providing the land valued at £9.0 million, which combined secure a 62.4% stake in the joint venture. Manganese Bronze has the right to purchase shares in the joint venture from Geely for £6.6 million to increase its stake to 50% at any time over the next five years.

The joint venture agreement will be subject to regulatory approval in China, and this transaction will require approval by Manganese Bronze shareholders at an Extraordinary General Meeting. The transaction would constitute a Class 1 transaction and a circular will be sent to shareholders once the definitive documentation has been finalised.

Manganese Bronze has been pursuing a strategy of controlled international expansion following the divestiture of its loss making components division. The group has been seeking a manufacturing partner in China in order to develop a low cost manufacturing facility and to gain access to a country with a growing vehicle market. Following extensive talks, Geely stood out as one of the most respected automobile companies in China and the prime partner for a joint venture.

Geely entered automobile manufacturing in 1996 and has rapidly grown as the key brand for low cost vehicles in China. It now has an annual production capacity of 250,000 vehicles, 200,000 engines and 150,000 gearboxes from four separate manufacturing bases. This capacity is growing rapidly as Geely meets customer demand for its vehicles which has grown in excess of 50% in the last six months. Geely have a wide and impressive range of vehicles which are manufactured in some of the most modern automobile manufacturing facilities in China.

The intended capacity of the joint venture facility will be 20,000 vehicles, with production planned to commence in mid 2008 subject to timely completion of legal agreements and shareholder approval. The cost of producing the London taxi is expected to be significantly lower due to higher volumes and purchase of components from Geely’s current low cost suppliers. The joint venture will provide Manganese Bronze with a low cost manufacturing base which should increase appeal to new markets outside China and allow rapid access to the large and fast growing Chinese vehicle market.

Tim Melville-Ross Chairman of Manganese Bronze, said;

“We are delighted to have signed these Heads of Terms with Geely. Geely is one of the fastest growing car companies in China, with impressive manufacturing, supply chain, engine and dealership facilities. The joint venture will increase the appeal of our iconic vehicle around the world. We look forward to concluding a final agreement in the near future.”

Chairman Li Shufu of Geely, said;

“We are very pleased to have signed these Heads of Terms with Manganese Bronze. The London black taxi is an iconic vehicle and we believe that the joint venture can create significant value for shareholders of both sides. We look forward to a significant export opportunity with Manganese Bronze. This is an important agreement for Geely and we are confident that the joint venture will be a success.”

For further information:

Manganese Bronze Holdings plc

Mark Fryer, Group Finance and Business Development Director 02476 572 223

Financial Dynamics
Jon Simmons
James Ottignon 020 7831 3113

No doubt as soon as the plant is up and running the chinese management will make manganese bronze an offer they can't refuse "sell out or we'll sell our products cheaper in your home market and bankrupt you" allegedly

I work 7 days a week, 12 hours a day I'll have you know.

Then again . . . . . 3 nights can be more than enough nowadays.

Manganese Bronze Holdings and Chinese car manufacturer Zhejiang Geely Holding Group have signed a £53 million joint venture agreement to produce the iconic London black taxi in Shanghai. The agreement will be subject to regulatory approval in China, and approval by Manganese Bronze shareholders and is expected to become legally binding within the next few weeks.

Manganese Bronze is likely to invest around £19.85 million in the project, and this will contribute towards the purchase of land (£9.0 million), intellectual property (£5.6 million) and to fund construction and factory fit out. The final assembly and sales will be handled by Shanghai Maple, a subsidiary of Geely, and the vehicles are destined for markets in Asia. Manganese Bronze, meanwhile, will have the right to sell them in the rest of the world.

Manganese Bronze will partly fund the investment by issuing 5.7 million shares to Geely in return for a 37.6 per cent stake of in the joint venture. Manganese will have the right to increase its stake in the joint venture to 50 per cent at any time over the next five years for £6.6 million.

The new facility in Shanghai will have the capacity to product 20,000 vehicles a year, and production is planned to commence in mid 2008 subject to completion of legal agreements and shareholder approval.

Manganese has been looking for a manufacturing partner in China in order to develop a low cost manufacturing facility and to gain access to a country with a growing vehicle market. Geely has an annual production capacity of 250,000 vehicles, 200,000 engines and 150,000 gearboxes from four separate manufacturing bases.