The manufacturer of London's black cabs, Managanese Bronze, has called in administrators following mechanical faults and failure to secure new funding.
PwC has been lined up to handle the administration, but has not been officially appointed yet.
The Coventry-based company suspended its shares on October 12, following a recall of more than 400 vehicles after discovering a fault with the steering mechanism.
The company at the time said: “Until such time that a technical solution is developed to rectify the fault, the financial position of the Group remains unclear”.
Manganese Bronze had been trying to secure a loan from Chinese automaker Geely, which owns part of the company under a joint venture called Shanghai LTI Automobile Components.
The taxi maker, which has only produced London black taxis since 2003 under its LTI Ltd operating division, has been in financial difficulty for several years.
In August, it revealed an accounting error had caused it to understate past losses by a total £4.25m. According to the BBC the firm, which employs 300 people, has made losses for the past four years.
In early October it stopped sales of its new TX4 model following the recall.
The problem arose in a new design for the steering box sourced from an unnamed new supplier since February.
The company said “in extreme cases, it could affect the ability to steer the steering wheel”, but denied that the fault would put anyone in danger.
It said in a statement that “the board remains hopeful that the fundamental strengths of the company, the TX4 model and its global reputation will provide the platform for a successful business in the future”.
Manganese Bronze and Geely signed a joint venture agreement in 2006. The JV produces taxis for the international market from a plant in Shanghai.
Sales by the cabmaker have been waning. It sold 1,502 taxis in the UK last year, compared with 1,653 in 2010, a fall of 9.1%.
The BBC reports that Manganese Bronze recorded an operating loss of £3.1m on revenues of £34.3m for the first six months of 2012.