AIM-listed EcoCity Vehicles has signed an exclusive contract with Mercedes-Benz to launch a new Mercedes 'London cab' through its KPM-UK Taxis subsidiary.

KPM-UK will become a multi-franchise dealer, and will run the Mercedes taxi outlet in seperate premises alongside its LTI taxi dealership, which it has operated since 1989.

It will sell a taxi based on the Mercedes Vito Traveliner. It has a rear wheel steer system, developed by EcoCity's associate company One80, which enables the vehicle to meet the 25ft turning circle statutory requirement of London taxis.

From launch on June 26, KPM-UK will target the vehicle at Greater London's 25,000 licensed taxi drivers. It can be be hailed in the street or from one of over 500 designated ranks in London.