London's black cabs to be made in China

London's black cabs will be made outside Britain for the first time after Manganese Bronze finally pulled off its long-awaited deal to set up a low-cost manufacturing base in China.

After two failed attempts to find a Chinese partner, which cost the taxi-maker's former chief executive his job in July, the group unveiled plans yesterday to produce 20,000 cabs a year in Shanghai in a money-saving move that could push down the price of London taxis.

The company said the £53 million ($150 million) deal with Zhejiang Geely Holding would secure the future of its British plant in Coventry by giving it access to cheaper components.

Since Rover's demise, London Taxis International, Manganese's main business, has become the biggest UK-owned carmaker. It's Coventry site makes 2500 taxis each year.

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 failed to secure the requisite licence under a new Government automotive policy.

Manganese is funding the bulk of its £19.85 million 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. The group expects to start making the Chinese cabs in mid-2008.

Attention will be 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 to Mexico.

- INDEPENDENT