SCOTTISH TAXI maker Allied Vehicles is eyeing a new £40 million market after obtaining a high court ruling allowing it to sell its cabs in London, Liverpool and Manchester for the first time.
Allied, based at Possil in Glasgow, has spent more than two years in a court battle with Liverpool City Council alongside disability campaigners to overturn a ban on hackney cabs unable to turn within an 8.5 metre radius.
The rule, dating back to the era of horse-drawn cabs, ruled out Allied’s standard Peugot E7 model, handing an effective monopoly to Coventry-based LTI Vehicles, the UK’s only other major taxi maker.
Given equivalent restrictions in London, Manchester, and smaller cities such as Coventry and Peterborough, the rule has denied Allied access to a market worth around £40m a year - more than half the UK total. But Mr Justice Blake has now decided Liverpool’s rule contravened EU competition laws and also the Disability Discrimination Act (1995), as the smaller LTI cabs do not give adequate access for disabled passengers.
Gerry Facenna, Allied’s chairman, called the ruling a “massive” boost for his company, which has already had to fight behind-the-scenes battles in Glasgow, Edinburgh and Birmingham for access to the taxi market “We are very excited about it,” he said. “Dealers all over the country are contacting us to say that they think this is going to open everything up.”
He said that the judgement was particularly well-timed in this respect because its struggling competitor LTI had just given dealerships 12 months’ notice of withdrawal of business, allowing the firm to cut costs through direct sales.
Although Liverpool City Council has a month to appeal the ruling, Facenna said London presented a far more exciting opportunity should the decision stand. The 23,000 hackneys there represent over half the national total, and 1500 of them are replaced each year.
In the past Allied has won an average of 60% of the business in the cities to which it has access. The company first challenged the rules that excluded it from London in court five years ago, resulting in minor changes that left the status quo essentially unchanged. Legal advisers told the firm that mounting another challenge might cost as much as £1m.
“It was going to cost us a fortune,” said Facenna. “We were also fighting Edinburgh council over similar issues at the time, and we couldn’t fight everyone. Fortunately we eventually reached an agreement out of court with the Edinburgh leaders.”
The judgement comes at a time of deep crisis for the taxi manufacturing industry, as banks are refusing to lend drivers money to replace cabs. Last year LTI plunged into £14.2m pre-tax losses as cab sales fell by a third, prompting not only the dealership cutback but also 20% staff cuts. The share price of parent company Manganese Bronze fell 90%, although it has since regained about half of that value.
Allied profits in the year ended April 30, 2008 leapt 19% to £651,000 on a 56% rise in turnover to £69m, but general manager Donald Pow admitted the Glasgow company had found the market much tougher since then.
“We took a significant drop around the turn of the year, but things are beginning to pick up again, and we’re doing well with mobility cars and electric vehicles,” he said, adding that the current year’s figures would show a rise in sales year-on-year, and the company remained profitable.
A spokesman for Liverpool Council told the Sunday Herald its lawyers would wait for the written judgement before deciding whether to take the case to appeal.
“We reached our decision to ban the taxis after lengthy consideration. Our concerns are also shared by a number of authorities,” he said.
Committee members were worried the E7s would not be able to turn in narrow streets. There were also safety concerns over sliding doors and vehicle height.
LTI Vehicles did not respond to a request for comment before the Sunday Herald went to press.