Sales of iconic black taxis slump

Sales of black taxis are down by more than a third

Sales of black taxis fell by more than a third in the nine months to the end of September, the maker of the iconic cabs, Manganese Bronze, has announced.

The group sold 1,628 vehicles compared with 2,604 in the same period last year, a fall of 37.5%.

It also warned that uncertain economic conditions meant demand for cabs in the second half of the year would be below that in the first half.

The group is making fewer cabs and laying off staff to compensate.

The dramatic fall in sales is due in part to the near-record sales of the TX4 cab, which was launched during the same period last year.

The TX4 has suffered a number of high-profile under-bonnet fires in recent months, although the group did not say that these had affected sales.

The group did say that earnings would be negatively affected by three main factors: the strength of the euro increasing the cost of its Italian engines; the cost of supporting a joint venture with engineers; and the cost of international marketing.

Tough trading

To combat the tough trading conditions, Manganese Bronze is making fewer vehicles, reducing operating costs "aggressively" and "implementing headcount reductions".

HISTORY OF THE LONDON TAXI The first black taxi in London was the hackney coach in the 17th Century In 1662, Charles II required that hackney coaches be licenced In 1833, the trade became unregulated. The driver and vehicle simply had to be 'fit and proper'. A condition that remains today The "Knowledge of London" was introduced in 1851

It expects these measures to reduce its break-even level to 2,000 cabs a year.

"The UK market place remains challenging and the board does not expect that UK sales will exceed the manufacturing break-even level in 2008," a group statement said.

Eastern promise

The group believes moving outside the UK holds the key to its long-term prosperity.

Its joint venture in China, Shanghai LTI, "offers the greatest potential to secure the long-term profitable future for the group," the statement said.

Prototype vehicles are currently being tested and commercial production is expected to begin by the end of the year.

Burning issues

The group was forced to recall 5,400 TX4 cabs in the UK in September after 12 cases of under-bonnet fires.

To date, nearly 400 vehicles have been modified and a further 600 are off the road awaiting work. All the cabs should be modified by the end of February 2009. The cost of the recall should total about £4m, the group said.