Feature Analysis - TAXi fare for china






















© LTI Limited reproduced with permission. Fairway and TX shape is a registered design. Fairway™, TX™, the LTI device, the LTI and the London Taxis International logos are all trademarks of LTI Limited.



It’s as British as cricket on the village green and cream teas in a sun dappled garden. The London taxi has been a staple of the tourist perception of Great Britain since the invention of the thatched cottage by the British Tourist Board. Now LTI, the makers of the iconic taxi, are taking this tourist attraction abroad with production slated for Shanghai in 2008 by new Chinese partner, Geely.


The current version of the vehicle is the TX4, a highly evolved version of the TXI introduced in 1997. Like its ancestors, it was designed in accordance with the Public Carriage Office’s Conditions of Fitness rules which include, of course, that legendary 25ft turning circle. There have been numerous models of London taxi since the first electric Bersey “Hummingbird” of 1897 but the model that has insinuated itself into the public’s affections is the Austin/Carbodies FX4. This was the capital’s workhorse from 1958 until 1997, a production run bettered in Britain only by the Mini. It was a daunting task to replace it but in 1997 the all-new TX1 retained its predecessor’s prim respectability while marking a technical leap for the firm boasting improvements in driver comfort and passenger access.


The current TX4 was introduced in October 2006 and found immediate success in the taxi trade. In its first month it broke all production records for its producer, now renamed in honour of its offspring as London Taxis International (LTI). However, the specialised nature of all London taxis has confined their use to the capital with just sparing acceptance elsewhere. This has meant that production has always been low at only a few thousand a year. In contrast, a mass market car producer needs to produce hundreds of thousands each year in order to justify the huge cost of the capital machinery: in theory, the body stamping machines can press 2 million panels a year.


In order to achieve economic production LTI has had to improvise a viable production system. For example, the machine that presses the bonnets has been in service for around forty years and is something of an industry legend in its own right. The company has also embraced the modern way of making the body panels up into a single welded unitary bodyshell, often called a monocoque, yet it has retained the old-fashioned separate chassis. As for many manufacturers of off-roaders this belt-and-braces approach is claimed to contribute to an exceptionally strong structure, yet in reality it is more likely to be an aid to manufacturing. A modern unitary body carries all the structural loads for the vehicle so it must be designed and manufactured with high precision. LTI probably lacks the resources to achieve this exceptional standard and so the retention of a separate chassis provides the additional assurance of a steel backbone for the welded body. Land Rover uses a similar approach on the current Discovery, but the result is an extremely heavy vehicle. Curiously, Land Rover uses a unitary body construction on the king of off-roaders, the Range Rover.


Ultimately there is no substitute for scale in production and export markets had been actively sought for the London Taxi. However, in cities like New York their dinky engines and cute size were no match for that rumbling behemoth, the Checker Cab. The new joint venture between LTI and Geely takes a bold step forward with the Chinese firm churning out 20,000 a year of the latest TX4 or around five times more than LTI does itself. This will open the door to economies of scale for LTI since Geely will be able to press body panels on existing high volume machinery. Although there is some possibility of shipping supplies to China the vast majority of the component flow will be in the form of imports to the UK. Not only will this secure LTI economically there will also be knock-on effects with cheaper taxis and perhaps increased sales in the UK.


Nevertheless, there are doubts about the long term independence of LTI. Geely’s production is high scale and does not need the same kind of tricks that LTI has had to learn to make low scale production profitable. This is a direct threat to production in the UK which is almost certain to be progressively downgraded to a simple assembly operation. This is not a problem in itself, but only as long as LTI can keep a grip on the reins of R&D. Research at CardiffBusinessSchool has proposed just such an organisational structure, the vertical joint venture, as a future template for maintaining British R&D engineering skills in partnership with low cost production in the emerging economies. In the future, though, Geely may decide to advance into mass production technologies, developing new designs at its Shanghai Maple facility and abandoning the separate chassis in favour of a unitary body. If LTI is unable to take the lead on R&D then it may find itself outflanked on every side. The only constant in all this is the continuing requirement for London’s Conditions of Fitness which peg any taxi design to the capital’s needs. As the most stringent taxi regulations in the world they give LTI a unique knowledge base upon which it can build. Like they say in China, LTI is living in interesting times.










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