PRODUCTION of the body panels and chassis for the iconic London cab will be shifted to China in a move costing 60 jobs, it was announced today.
Manganese Bronze said the parts for its TX4 vehicles will be made in Shanghai after a key UK supplier’s decision to cease production of a specialist painting process later this year.
Manganese’s Coventry-based London Taxis International arm has manufactured the cabs since 1948, but it will now move to an assembly role.
Chief executive John Russell said: "Our UK consultation process is almost complete, which will lead to a smaller, lower-cost UK operation with a much greater level of supply from China.''
The firm said its UK sales performance "continued to be adversely affected by current economic conditions", with the London market hardest hit.
"UK sales performance continues to be challenging as drivers’ confidence to commit themselves to the purchase of a new taxi remains weak due to uncertainty about the general state of the economy," it said.
Manganese’s underlying pre-tax losses widened to £8.1 million last year from £6.2 million in 2008, with UK vehicle sales falling from 1,951 to 1,724.
Volumes in the second half of the year were below the first half despite the impact of the Government’s scrappage scheme, while the group has also racked up additional costs from the fall in the value of the pound.
The company, which has 300 staff, imports the engines for its cabs from Italy and incurred an extra £1,000 in costs last year due to the strength of the euro.
Mr Russell said: "Because we are very much a British brand, and that was of immense value to our customers, it seemed the best option to maintain a smaller manufacturing presence in Coventry."
The large size of the London cab made it uneconomic for the business to invest in its own specialist e-coat painting process as part of its production line as conventional car makers would, Mr Russell added.
Manganese, which now produces cabs in Shanghai for the Chinese and international markets under a joint venture, intends to make more savings on Chinese-sourced parts to help return its UK business to profitability.
Currently around £5,000 of the £23,000 cost of the cab’s components is spent with Chinese manufacturers. Top of the range TX4s can cost almost £37,000 from new.
The firm is now saving around £1,200 per vehicle on Chinese parts, with another £800 to come this year and potentially a further £2,000 in savings on further outsourcing.
Manganese also made heavy losses in 2008 after a spate of under-bonnet fires led to the recall of thousands of vehicles.