Black-cab sales are plunging, sending the maker of the London taxis crashing into the red.

Manganese Bronze today revealed losses of £14 million in 2008, a near-£20 million turnround on the profits made in 2007.

Black-cab sales plunged by 700, or 37.5%, to less than 2000. Sales are down 18% in the first two months of the year despite Manganese's black-cab dealership Mann & Overton cutting £2000 from the average £30,000 price for a TX4.

The dividend has been scrapped, and Manganese shares today dived 10½p to 57p.

The finances of Manganese, which has cut 80 jobs at its Coventry factory, were worsened by a spate of fires in the new TX4 cabs, leading to the recall of the fleet for checks at a cost of £3.8 million.

It is understood the cause of the fire was a combustible material used in an engine heat shield but, with doubt over whether it is a design fault or component failure, Manganese chief executive John Russell said a final decision on liability and compensation has yet to be made.