China: London Taxis are as British as bowler hats and Big Ben. But the latest models coming off this new assembly line are unlikely to ever touch an English road.
At a sprawling factory in the lush green suburbs of Shanghai, young Chinese workers are busy gearing up for full-scale production of one of Britain’s most iconic vehicles. It’s part of an odd alliance that aims to give the distinctive black cab a greater presence outside its namesake city.
London Taxi International, which will continue to build nine out 10 cabs used in Britain at a factory in Coventry, England, couldn’t grow production at its small-scale, high-cost plant. So it turned to a partner and to China as a way to drive overseas expansion.
“To say the writing was on the wall would be pushing it a bit too far. But you do need to make progress within the automotive industry,” said Paul Stowe, a British auto executive who is overseeing the joint venture between Britain’s Manganese Bronze Holdings PLC, owner of London Taxi International, and Geely Group Holdings, one of China’s biggest independent automakers.
6,000 London taxis to roll out of Chinese factory
The venture is bearing fruit already, Stowe said, with agreements signed to sell 6,000 London Taxis from the Chinese factory, more than double the Coventry plant’s annual output.
Most will go to cities outside China - places like Singapore, Dubai, Moscow that covet the image associated with the London Taxis’ tradition of good service and durability.
The cars are unlikely to displace other vehicles used as taxis in China given their higher price and the strong political sway of bigger automakers with the local officials in charge of city fleets. Instead, LTI expects to sell them mostly to hotels, limousine services, airports, and individuals who might want to collect one, Stowe said.
Manganese Bronze Holdings hunted for nearly a decade for a suitable Chinese partner. Geely likewise was looking for a chance to bring onboard the new technology and quality upgrades it needs to get ahead in China’s brutally competitive market, without risking being swallowed by a huge international rival.
Trial production of London Taxi’s TX4, equipped with 2.4-liter Mitsubishi engines, began last week in Geely’s sprawling Shanghai Maple factory, in the scenic canal town of Fengjing. By mid-December, the plant will launch mass production.
Higher production volumes would mean cheaper prices
By boosting volume, LTI expects to reduce costs by up to 60%, with most of the savings coming not from cheaper labor but from less costly parts, Stowe said. The price for the vehicles hasn’t been disclosed, but will be significantly cheaper than the British-made models, which sell for about $54,000, he said.
“Classical British Icon with Traditional Chinese Spirit,” reads one of the many slogans in the factory. Unlike most highly automated modern auto plants, there are few robots since the London Taxi is hand-built and hand-welded. The result is a heavy-duty, durable vehicle that can be driven 1 million miles and last several decades.
But it’s the vehicle’s traditional idiosyncrasies, such as its famed ability to make extremely tight turns, and the storage space next to the driver’s seat that originally held hay bales in the days of horse and carriage, that give the black cab its appeal as “not just another car,” says Stowe, who as deputy general manager of Shanghai LTI Automobile is busy plotting the venture’s brand strategy.
Black cabs hold an iconic ‘pure-Brit’ appeal
Black cabs which these days often come in other colours and are festooned with advertising are seen strictly as a commercial vehicle back home. But in China, the vehicle’s novelty, and notoriety from appearances in dozens of films, lends it a certain cachet.
“It’s pretty cool to see a British car traveling on the street of Shanghai, just like in a movie scene,” said Xu Bin, senior auto trend editor for the local magazine Metropolis.
But much will depend on how Geely, which is in charge of selling the cars in China and the rest of Asia, decides to market the vehicle: The terms of the $95 million deal gave the Chinese side a 52% share in the joint venture, as well as a 23% stake in Manganese Bronze Holdings. The British partner holds 48% of the joint venture and rights to sales of the vehicles in the rest of the world.
Stowe, who has sold the rights to his memoire of his experiences working in China with MG Nanjing to the BBC, seems something of a cultural ambassador in the automaking world. To help explain the London Taxis’ distinctive, tall-topped shape, he keeps a bowler hat on hand.