Autos

London Taxis' Next Stop: Azerbaijan


Violet taxis from Manganese Bronze will ferry visitors to the European song championship in Baku

Photograph by President of Azerbaijan Republic Press

Violet taxis from Manganese Bronze will ferry visitors to the European song championship in Baku

The Azerbaijani pop duo Ell & Nikki’s victory in last year’s Eurovision Song Contest has produced an unlikely beneficiary: a British taxi manufacturer. Tradition dictates that as reigning champ of the pan-European songfest, Azerbaijan gets to host the next competition, to be held on May 26. That has prompted the oil-rich nation to order 1,000 black London-style taxis. The iconic cabs are destined for the capital city of Baku, which has a fleet of 20,000 Soviet-era models, mostly Russian Lada sedans.

British automaker Manganese Bronze Holdings (MNGS:LN), which will paint its normally black taxis violet at the behest of Azerbaijani President Ilham Aliyev, is seeing a surge in interest from energy-exporting economies. In 2011 the company sold 1,502 vehicles in the U.K. and 705 overseas. This year, it predicts, it will for the first time sell more cabs abroad than in Britain.

“All the surveys indicate that London has far and away the best taxi service in the world in the view of business and tourist travelers,” says Chief Executive Officer John Russell. “That has a big emotional attraction for people who are trying to develop their cities.”

Manganese, which reckons it has built 85 percent of the cabs operating on London streets, serves 15 overseas markets including Saudi Arabia, Bahrain, and Kuwait. The taxi maker has also received interest from 30 or 40 more countries, says Russell, who has worked at PSA Peugeot Citroën (UG:FP) and Harley-Davidson (HOG). In Britain the cabs cost about $48,000 to $55,000 each. Because the order is so big and their cabs have slightly lower specifications, the Azerbaijanis are buying them for about $27,000 apiece.

Azerbaijan plans to have 3,000 London-style cabs on the streets by next year. Baku, a city of 2.5 million on the western shore of the Caspian Sea, is prospering. Since Azerbaijan’s independence following the Soviet Union’s collapse in 1991, energy companies including BP (BP), Statoil (STO), and Total (TOT) have spent as much as $35 billion in the country.

Drivers with Baku Taxi, the state-backed company that operates the London-style cabs, say passengers like the roomy interior and the meters, which mean an end to haggling over fares. “I turn on the counter, and the passenger sees it on the screen,” says cabbie Adil Eyyubov. “It’s comfortable for clients, they do not have to bargain.”

The black taxis, known as Hackney cabs because of their origin as carriages drawn by French Haquenée horses, feature 25-foot turning circles, as required by London’s Public Carriage Office in the early 20th century, to enable exits from taxi-waiting queues in the middle of the street or tight spaces such as the Savoy hotel forecourt.

Coventry (England)-based Manganese Bronze in 2006 entered into a joint venture with China’s Geely Automobile Holdings to help cut costs and ensure its long-term survival. Under terms of the accord, Manganese buys components and body parts from Geely’s supply chain in Asia before assembling them in the U.K. Geely took a 20 percent stake in the British company and holds rights to sell the black cabs in China and some parts of Asia.

In 2014, Manganese will introduce a new sedan-style taxi as part of the joint venture, and the British company will act as Geely’s distributor when the Chinese company starts exporting cars to the U.K. as early as late this year. Russell says the China deal, by providing access to Geely’s engineering expertise and existing car platforms, has freed Manganese to focus on what it does best: “marketing the magic of the London taxi.”

It remains to be seen just how long Azerbaijan’s makeover will endure after the Eurovision competition fades into musical history. Still, the colorful cabs should at least brighten the drive from the airport to Baku along what, until a recent building boom, was the country’s one good highway.

The bottom line: Azerbaijan is adding thousands of London taxis. Unlike their iconic cousins, these will be violet instead of black.

Rothwell is a reporter for Bloomberg News in London.
Agayev is a reporter for Bloomberg News in Moscow.

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