London Taxis Get A New Life in China

Do you have a good product that you would like to sell more of, but find there are limited opportunities in your home market? If this is the case, why not consider bringing that product to China and kill two birds with one stone—reduce its cost and expand its market?

That’s precisely what Manganese Bronze Holdings PLC, a U.K. company and owner of London Taxi International (LTI), did in a China venture that is already bearing fruit.

If you have ever been to London, you have undoubtedly ridden in one of those funky-looking taxis that are an icon in the city. I find their complete lack of styling appealing, and you can’t beat them for comfort. They are very easy to get in and out of; have a great deal of leg room; and there’s more than enough space in the back seat to keep most of your luggage close at hand.

LTI builds approximately 3,000 London Taxis every year at its plant in Coventry. Due to the small volume produced, there is no automation and each taxi is hand-built and hand-welded. The result is an expensive vehicle (30,000 pounds sterling, $54,000, or 367,000 yuan), but one that is very durable. London Taxis are said to be good for 1.6 million kilometers and can last several decades.

Manganese Bronze got the China idea a while ago, and has hunted for a suitable Chinese partner for nearly a decade. It finally found one in Geely Group Holdings, one of China’s largest independent automakers, and the joint venture between the two companies recently began producing London Taxis in Geely’s Shanghai Maple factory. Mass production is scheduled to begin by mid-December.

Agreements have already been reached to sell more than 6,000 London Taxis from the Chinese factory, more than double the Coventry plant’s annual output. Most will go to hotels and limousine services in cities outside China – places like Singapore, Dubai, Moscow – that covet the image associated with the London Taxis’ tradition of good service and durability. Due to higher volumes and lower costs in China, it will be up to 60 percent cheaper to produce a London Taxi in the China plant than it is to produce one in LTI’s Coventry facility.

The Manganese Bronze/Geely joint venture is an interesting one that we will have to follow. On the face of it, though, it looks promising. Geely gets an interesting product and some valuable technology and know-how, while Manganese Bronze triples the output of its London Taxis, with the promise of additional sales increases made possible by a more competitively-priced vehicle. So far, so good.

No comments yet... Be the first to leave a reply!