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ECONOMY: Get the Cab From Shanghai to London

Antonaeta Becker and Sanjay Suri

BEIJING/LONDON, Apr 14 2010 (IPS) - The black, curvy London cab is so much more than just a taxi. It is an icon without which the picture of London can never be complete.

Chinese acquisition of majority stakes in Manganese Bronze, the British manufacturer of the London cab, completes another picture: of Chinese industry relentlessly advancing and taking over – now even this symbol of London.

Geely, the independent Chinese auto manufacturer, first entered into a partnership with Manganese Bronze in 2006 to produce components and, four years later, on Mar. 17, announced plans to become majority shareholder.

Globalisation certainly, if this will now be the London cab built in China, and will carry passengers from just about everywhere in the world. But globalisation Chinese style is nearly always to its own advantage, rather than that of whatever gets taken over.

It is a brave move for Geely, though not as big as the Chinese manufacturer’s takeover of Ford’s ailing Volvo car unit, also in March, at a cost of 1.8 billion US dollars.

Ownership of the black cab is a small acquisition but a big statement coming from Geely founder Li Shufu. Li’s is a legendary rags-to-riches story told and retold in China. He was the ‘country bumpkin’ from Zhejiang province who tapped into the surging ambitions of would-be car owners to build affordable little cars.

The cheaper Geely models sell in China for as little as 40,000 RMB (5,670 US dollars). “It is cheap, it uses little petrol, and I thought it was ideal for a first car,” said Feng Wencong, a guard at the National Exhibition Hall in Beijing.

It is here that cutting edge cars will be on display at April’s Beijing Auto Show. “But Geely is what the laobaixing (100 Chinese names, or ordinary folk) will go for,” Feng says.

Rather than taking cheap cars abroad – as the Indian company Tata is trying to do with their Nano – Geely wants to take over some established icons and build them in China.

Geely did follow the Nano strategy earlier, exporting small cars to developing countries. But the company’s ambitions have grown rapidly through the 13 years of its existence – making the company upstarts in the eyes of some in the auto industry.

Geely made a beginning, and found success, with copying foreign models. Li now clearly wants to part with that less than flattering image and establish Geely on the world stage.

But if the black cab is partly about image, how Chinese will the image of the black cab now become?

“The Chinese deal has brought no loss to that iconic image,” a spokeswoman for Manganese Bronze, so far the manufacturer of the London cab, tells IPS. “It is very much an English brand. We are looking to sell the Britishness abroad, rather than diminish the Britishness in the UK.”

The London cab, the TX4 to be precise, does step out of Britain – there are a couple of hundred around in the U.S., and they are a little more common in Cyprus, South Africa, Israel and Singapore. But more as a picture of quaint Britain outside of it; only London is their natural home.

“There are very strict rules for qualifying for a taxi in London, and Manganese Bronze meets those,” says the spokeswoman. Geely will now have to meet those standards.

Many have their doubts, going by some of the remarks on the websites of auto fans in China. “A funeral car,” said one visitor to autohome.com.cn. “Geely is a foreign lackey,” said another. “The black cab has no relation to Chinese aesthetics. It is just a matter of time before this plant goes out of production.”

Geely has plans to move more of the production from the plant in Coventry to China. The doubters see Geely as over-reaching itself, but Li clearly has other plans.

For Britain, this is about the last blow to what was once a thriving auto industry. After the Indian company Tata acquired the iconic Jaguar and Land Rover car in 2008, Manganese Bronze, small as it is, was about the only seriously British car maker left.

And, it needed help. The manufacturer of the protective undercoat of paint for the cab went bust, setting off a break in the manufacturing cycle in Britain. Reduced sales last year already had the company in a spot, with an operating loss of about 10 million dollars.

The cab is facing competition now from Eco City, which distributes the Mercedes Vito. The TX4 still has about 80 percent of the London taxi market. Geely will want to keep that, and keep up sales to at least 2,000 units or so a year.

Not a lot, but this is about the Chinese stamp on a British icon – how good it is, and low long it lasts.