London taxis to hit Europe’s streets next year
LONDON (Reuters) – They might not be black, and the steering wheel will be on the other side, but London’s distinctive cabs should hit Europe’s city streets next year, the chief executive of the London Taxi Company (LTC) told Reuters.
The firm, owned by Chinese automaker Geely, is aiming for a tenfold increase in output to about 10,000 cabs and light commercial vehicles by the turn of the decade, and it wants to sell its taxis to major European cities.
Despite industry concerns over Britain’s future access to the European Union after Brexit, the cab maker has pushed ahead with investment plans and has nearly completed a new factory in central England.
Executives from LTC, which traces its roots back to 1899 and was bought by Geely in 2013, have visited cities such as Oslo, Amsterdam, Paris and Berlin in recent months, seeking new markets for the London black taxi.
Chief executive Chris Gubbey declined to say which city would be the first overseas market for the cab, but the firm will aim to export its new low-emissions model from next year.
“We’ll start selling them in 2018,” Gubbey said, acknowledging that it will be tricky to break into markets long dominated by other brands.
“They tend to be very nationalistic in their product, and I think knowing that, we have to very sensible about what we believe can be our rate of climb in terms of market share,” he said, referring to some European cities.
The firm has invested about £300 million in a new plant near the central English city of Coventry, close to its existing facility that makes the current range of conventional models.
Gubbey told Reuters the Brexit vote and uncertainty around the country’s future trading arrangements had not prompted any investment changes, but there were concerns.
Prime Minister Theresa May recently said Britain would leave the EU single market, which guarantees unfettered trade with the EU. But May also suggested that the car industry might be able to keep elements of free trade under a bespoke Brexit deal.
She also said Britain would rather leave the European Union without a new agreement in place than accept a “bad deal,” prompting concerns in the industry that Britain might have to fall back on World Trade Organization tariffs.
“No deal is a tough deal because it basically means going to WTO standards, which is a 10% tariff,” Gubbey said.
In a worst-case scenario, Britain’s more than 1.3 million car exports could face duties and be hit by the loss of customs-union access. It would take longer and cost more to move components to and from continental Europe.
Around one-third of LTC’s new model will be made of British parts, Gubbey said, less than the 41% UK industry average.
Both, however, fall short of the terms of some trade deals between countries, which can require more than half of the parts in a new model to be locally made, a potential problem depending on the nature of any post-Brexit trade agreement.