17 Jul 2009 11:44
Eco City Vehicles Plc ("ECV" or the "Company")
The Company announces that it has been informed by a letter dated 16 July from LTI Limited (a subsidiary of Manganese Bronze Holdings plc) to all its UK independent main dealers that it is necessary for LTI to wholly reorganise its dealer network.
LTI has therefore issued all of its independent main dealers with a one year termination notice in accordance their dealer agreements. As such, KPM UK Taxis, ECV's wholly owned subsidiary, will cease to sell new LTI taxis from 17 July 2010 although it will continue to sell used LTI taxis and provide aftersales service to LTI taxis after this date.
ECV had anticipated this course of action since late 2008 following the successful launch of the Mercedes Vito Taxi which has already taken 25% of new taxi sales in London in less than a year with a strong forward order book. LTI taxis formed a diminishing part of ECV's business with only 61 new LTI vehicles being sold in the year to date compared to 242 Mercedes Vitos.
Peter da Costa, Chief Executive of Eco City, said:
"This is an expected development for which we have been planning for some time. We had forecast our sales of new LTI vehicles tailing off over the next 12 months in any event as the Mercedes Vito gained further traction with our customers. We continue to investigate further collaborative opportunities with Mercedes.
"Our expansion plans for the UK are on track and we are in advanced discussions with several former LTI dealers wishing to sell the Mercedes Vito. This follows the increasing level of sales enquiries regarding the Vito that we have received from the rest of the UK over the course of the year.
"The Company's expansion into the growing eco market continues and will see the roll out of a range of vehicles to cater for the UK's environmental agenda. As recently announced, our eco programme has seen its first series hybrid 3.5 ton truck launched this year and will be followed up by a 7.5 ton version and an environmentally friendly Mercedes Vito taxi both due in 2010."
Enquiries:
Eco City Vehicles PLC 020 7377 2182
Peter Da Costa, CEO
Numis Securities Limited 020 7260 1000
Stuart Skinner (Nominated Adviser)
David Poutney (Corporate Broker)