Taxi manufacturer Manganese Bronze warns on redundancies

The company announced yesterday (30 September) that it was commencing formal consultation with workers to identify ways of returning its currently loss making UK operation to profitability. A management statement said: "The consultation will be wide ranging and will review all options including rationalisation of the current manufacturing operations which could result in a number of redundancies. Manganese Bronze said trading in the UK continued to be negatively impacted by the recession, and believes that demand for new vehicles in the second half of the year will follow the normal seasonal pattern and be below that of the first half. Overall vehicle sales for the eight months to the end of August were down 9% to 1207 vehicles versus 1328 vehicles in the comparable period of 2008. Lower volumes with high discounts and marketing support initiatives have resulted in continuing losses. The manufacturing breakeven level from Manganese Bronze's Coventry plant is around 2000 vehicles a year and the rate of sales is below this. The benefits of lower cost Chinese parts had not yet been sufficient to reduce the breakeven level as price increases from UK suppliers and sales discounting had more than offset this benefit, the company said. Manganese Bronze said it believed its 48%-owned joint venture in China, Shanghai LTI (SLTI), offered the greatest potential to secure a long term future. Production there (pictured) had now begun with 109 vehicles sold into Asian markets and an additional 15 sold into international markets. Sales had however been delayed, mainly because of a shortage of international customer finance facilities. 3,000 vehicles have been sold on sales contract over three years with 50 of these financed by customers and in the process of being built or shipped. Customer orders for 150 vehicles are being held waiting mainly for finance issues to be resolved. The company also announced that its Chinese joint venture partner Geely is to develop a new saloon car-based global taxi for SLTI production. This will address the mainstream low cost taxi market and will supplement the traditional higher quality TX4. The new model will be engineered from an existing Geely vehicle platform that is currently in development and will have styling cues from the traditional London Taxi and product features also consistent with a London Taxi but without the manoeuvrability and disabled accessibility of the current TX4. The vehicle is intended to be available for sale in late 2011.