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Li Shufu aims at global taxi market

Source:Globaltimes.cn Published: 2013-10-24 10:55:43

The classic British-style taxis are unique scenery on the streets of London. This classic hundred-year-old car, together with famous scenic spots including Buckingham Palace, Big Ben and Tower Bridge, is the symbol of London. And it has become a wholly-owned subsidiary of Zhejiang Geely Holding Group. 

Under the new ownership, London taxi follows its classic British traditions. Meanwhile, with Geely's painstaking efforts, the "London Black Cab" was brought back from death and emerged with full of vitality, aiming to march towards the global taxi market.

Geely Taking Control, London Taxi Revitalized

As hometown for automobile industry of the United Kingdom, the English Midland city Coventry has become manufacturing centers of motorcycles and automobiles since the 19th century. Now, Jaguar, Land Rover, Aston Matin and BMW engine plants are still operating in Coventry and its surrounding areas.   

London Taxi Company is also located here. After silently witnessing a century of trials and hardships, four words "Zhejiang Geely Holding Group" and its English logo has been added on the slightly mottled red brick wall.  

Since it was purchased by Geely Holding Group in February, 2013, London Taxi Company has sold out all inventory vehicles after the shutting-down of its production line in 2012. 

Production was resumed and finished automobile assembling began here on September 11.

"The production is resumed very quickly. And everything goes on well." said Paul Woolley, operation director of London Taxi Company. To observe the customs of the place, all senior executives of the company have Chinese translations on their business cards. And new identity of the company—Wholly-owned Subsidiary to Zhejiang Geely Holding Group, is labeled at the back of their business cards.  

After going into operation again, the company can achieve a production scale of 10 vehicles per day and 5 days a week. "Constant quality improvement makes the newly delivered taxis more exquisite."

The workers show great confidence in the new owner. "There are really great changes in a short period of several months. The greatest change is that our co-workers are working with more active attitude. " As a senior worker of London Taxi Company, Paul has been working on the production line since 1996. He and many other co-workers were laid off last October when the company's former owner Manganese Bronze Holdings PLC entered into bankruptcy proceedings.

Paul thought he would have to live through a long period of unemployment, and "never expected to resume my job so soon". He came back to his post in this July and saw many new faces. 

In the next five years, 150 million-pound investment in this section 

At present, the manufacturing equipments in the Coventry plant of London Taxi Company have been improved significantly. Some 65 engineering and technology posts are increased; new personnel are recruited in London. There are almost 170 staff in the company now. In Coventry, Englon TX4 has been put into production. And new vehicles are under research, development and design.

"The anticipated output of the first month has been booked out." said Paul Woolley. The production capacity of the plant is 20,000 automobiles. The company anticipates to sell 2,000 taxis in the first year after the resumption of production, about half of which will go to international markets including Saudi Arabia and the United Arab Emirates, etc.. In London, the existing more than 20,000 cars will be replaced in succession. Geely predicts that in the next five years it will invest 150 million pounds in this section and consider the construction of new production bases in Coventry and other regions in the United Kingdom.   

"After Geely purchases London Taxi Company, the consumers and dealers become confident since they do not have to worry about the follow-up service." said Robert Lederer. Robert Lederer is the UK Retailers Chief Inspector of London Taxi Company. More than 200 new automobiles had been sold here in September.  

Entering into Geely era and accelerated development of London taxi

Geely purchases London Taxi Company at the cost of approximate 110 million yuan RMB. And in the follow-up research and development plan, 1.5 billion yuan will be invested in the research and development of new power. 

Why does Li Shufu bet on London Taxi Company? Many people are puzzled.

"There are no other automobile companies in the world that specializes in manufacturing taxis except for London Taxi Company." Li Shufu's goal is undivided, that is, to make professionalized taxis. 

"London taxi enjoys great reputation in the world. It represents a whole taxi service system and cultural system. It is an important part of the urban functions." Paul, who has been working in London Taxi Company for a long time, always feels very proud. 

In Li Shufu's opinion, London Taxi Company "does not generate huge profits. For the whole Geely Holding Group, its profits are a drop in the bucket". What he values is the special status the company enjoys in the UK, its additional service concept and brand effect. Accessibility for wheelchair user, strict eligibility evaluation of drivers and high-standard service are all outstanding features of London taxi.

With assistance of the new owner, London Taxi Company is confident to retrieve its past glories. According to Paul Woolley, in the next five years, 3 new models will be developed on the basis of the existing product brands. The first model is to improve the existing fully-accessible TX4 taxi. And the second product would be small-size taxi for private rental market. And the last and most significant product is to develop a brand new TX5 taxi which will outperform the energy-saving efficiency and environmental protection function of the existing vehicles in terms of indexes including low-weight car body, zero-emission standard and hybrid power. The plan will be put forward formally in 2018.    

Li Donghui reveals that the research and development of the new products will make use of the global R&D network including the R&D power from the cooperation with Volvo. The hybrid power technology will come from Volvo. Li Shufu is confident that with the aging of Chinese society and development of urban-entering, the domestic taxi will become "more humanistic, more marketization" and gradually take in such higher-cost and better-service foreign products as London taxi in the future.    

Globalization is the goal for London Taxi Company. Except for London, its large orders come from overseas. Its products have been exported to France, Poland, Saudi Arabia and Egypt, etc.  

Peter, Vice President of London Taxi Company, said optimistically that the former estimated 3-year loss-to-gain plan is hopefully to be achieved within one year. And surplus might be realized by the end of this year. 

At present, there are about more than 900 Englon taxis on the streets of China in major cities like Beijing, Nanjing, Guangzhou, Hangzhou, Erdos and Ningbo, etc. The market share is not large.

"To open domestic market, the London taxi must promote its efficiency and lower the fuel consumption." said a worker of Hangzhou Taxi Industry Association.

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