Manganese Bronze recalls taxicabs - FT.com The financial viability of the leading manufacturer of London's black taxi-cabs has been called into doubt by a product recall of 400 recently sold models and the suspension of further sales. Coventry-based Manganese Bronze said on Friday that defects in new supplies of steering boxes used in its TX4 taxi model had forced its latest recall. The problems stem from new parts, sourced from China, that was introduced into the lossmaking group's Coventry factory in February. The switch was made as part of a wider cost-cutting programme that involved sourcing more components from Chinese suppliers Shares in Manganese Bronze, which is 20 per cent owned by Chinese car manufacturer Geely, were suspended on Friday ahead of news of the product recall. Cheaper versions of the TX4 London taxi are being manufactured in China for non-UK markets, as part of a deal that has also seen Geely take a hand in sourcing components previously supplied by UK or continental European suppliers. "Discussions are being held with Geely to put in place a robust technical solution for the steering box faults," the company said on Friday. It added: "The suspension of sales will have a very material and detrimental impact on the group's cash flows and the board are working to establish the options available to the business given the impact on working capital." The recall follows a series of embarrassing setbacks for the company. A fortnight ago the taxi maker announced widening losses for the first half of the year on revenues that fell more than 10 per cent. The release of accounts came just an hour before a deadline that, if breached, would have seen shares in the Aim-traded company suspended. The problems over releasing its accounts on time stemmed from the unveiling of a £3.9m accounting black hole in August that was blamed on errors in the introduction of a new IT system. Manganese Bronze ended June with £11.4m of net debt. Shares in the company had fallen to 10p ahead of their suspension, giving the company a market capitalisation of only £3m compared with £230m five years ago. The company said on Friday: "Until such time that a technical solution is developed to rectify the fault, the financial position of the group remains unclear and trading in the company's shares will remain suspended." Falling demand for its taxis swung Manganese Bronze into the red in 2009, as low demand was compounded by costs related to a 2008 recall of some of its vehicles following a series of under-bonnet fires. There was also increased competition from recent market entrant Eco City Vehicles, which has broken Manganese Bronze's effective monopoly with its modified version of the Mercedes-Benz Vito. The rival now claims a just under 40 per cent market share of new cab sales. Both companies face new competition next year in the shape of Nissan, which plans to introduce its own London taxi.