London's cabbies hit by back-seat gloom

By Angela Monaghan

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/04/16/bcntaxi116.xml


London's taxi drivers are holding back on buying new cabs because they are being scared off by their City customers who keep telling them how miserable things look.

Manganese Bronze, makers of the famous London black cab, said that sales slowed in January and February as drivers delayed a purchase because of economic uncertainty.

Back-seat gloom from City customers is hitting cabbies' confidence


John Russell, chief executive of Manganese Bronze, did not reveal numbers but said: "If you've got a lot of people in the back of your cab telling you how bad it is for them it's bound to hit confidence. The City is a pretty gloomy place for a lot of people at the moment. Drivers are not going to find £35,000 for a finance deal when they've got to pay their mortgage."

Mr Russell insisted that customers were only delaying their purchases, rather than abandoning plans altogether. He added that March was a better month, because the company offered more incentives to encourage sales, including a flat rate financing offer of 3.9pc and trade-in deals whereby drivers part-exchange their old vehicle for a new one.

Cab drivers tend to buy a new taxi every three to five years, depending on the length of their finance contract, although last year sales at Manganese Bronze were boosted by the TX4, a model launched in October 2006. It sold an average of 350 cars a month in 2007, compared with a long-standing monthly average of about 200.
The latest on the financial crisis

Mr Russell said that results this year were likely to meet forecasts overall, but that the UK was likely to be weaker than analysts expectations, offset by a better-than-expected performance in China, where it produces and sells cars.

The company has changed its financial year to bring it in line with its Chinese joint venture partner, Geely.

Today it reported results for the 17 months to the end of December, which analysts said were at the lower end of market expectations. Manganese Bronze sold 4,200 vehicles for a total of £144.5m, including financing deals, servicing and parts supply. It made a pre-tax profit of £4.9m in the 17 months, compared with £3.7m in the 12 months to July 31 2006.

The board proposed a total dividend of 7.25p a share, compared with the 6p a share it paid out the year before. The final dividend of 1.5p will be paid on June 6.

It seems plenty still buying them up in Sheffield doesn't it?

They are way overpriced for what they offer in comfort and quality.

TX manufacturers would have been bankrupt years ago had it not been for the protection offered them by local authorities up and down the country. Now of course with the advent of the bread van taxis they are feeling the squeez, and if that means bringing prices down in order to compete, then so be it I say.