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Irizar spans the globe over 120 years

By Doug Jack

The Basque region bordering the Atlantic in northern Spain is the industrial heartland of that country. In 1889, Jose Francisco Irizar, a blacksmith in the village of Ormaiztegi started building horse-drawn wooden carts, soon followed by stagecoaches.

By the 1920s the Irizar family was into buses and coaches on wood timber chassis and eventually graduated to steel. The Irizar family sold out to the workforce in 1959 and joined the Mondragon Corporation, a large and successful Basque organization with interests in many industries.

In 1989 Irizar launched the distinctive and stylish Century at a time the company was building only around 250 bodies per year with questions about its long-term viability. With a new management team Irizar embarked on a period of remarkable growth.

When Spain became a member of the European Community in 1986, import duties that had previously protected domestic chassis manufacturers came down rapidly. With the market now open to imported chassis, membership also gave the strong Spanish bodybuilding industry new opportunities in export markets.

To this day Irizar continues to build on various makes of chassis for the Spanish market. About 10 domestic builders plus importers compete in the interurban and luxury coach sectors, but Irizar consistently takes around 40 percent of the market.

Outside Spain, where coachbuilders such as Mercedes-Benz and Setra dominated markets in France and Germany with complete integral coaches, Irizar teamed up with Scania, which produced excellent chassis, but no integral coach.

In little more than 10 years the two companies created a well-known brand, which became very popular in most European countries. The Scania interurban and luxury coach chassis have a very high degree of commonality with the truck range, which makes it easy to establish an extensive parts and service support network. Irizar also became highly efficient in production. Within a few years, build time was reduced from a typical 40 days to as few as 13 to 14. The new factory in Ormaiztegi incorporated six parallel production lines.

By this time Irizar was building interurban and luxury coachwork in different heights and in several lengths, also left- and right-hand drive. The main production lines have 13-14 stages and work in progress moves once per day. Paint ovens are located on the lines, capable of producing the most complicated graduated schemes.

Irizar subcontracts many of the manufacturing operations with suppliers given a precise date and time to enter the factory and carry out their work, which includes large sub-assemblies such as luggage racks and driver areas. In the late 1990s, Irizar embarked on an ambitious overseas expansion plan in large markets where there was regular demand for coaches for both express services and tourism.

The first move was a joint venture with local partners in Tianjin, China, to build the previous range of Everest coachwork on a variety of imported and local chassis. That decision was far-sighted because the Chinese market was not as open and developed as it is today.

At that time the Chinese authorities chose local partners. The market is since more liberal and Irizar now has different local partners. The updated model range also includes a low-entry city bus.

In 1997 Irizar set up a second joint venture in Morocco. Initially, the law restricted shareholding to 23 percent. As Morocco modernized the company became a wholly owned subsidiary. A new and larger factory opened last year near the capital of Rabat to build the Century body for the express coach and tourist sectors.

Irizar became a regular participant in international exhibitions and was able to claim presence in nearly 50 markets by the end of last century. Production included bodywork in kit form for local assembly in countries as diverse as Venezuela, Chile, Tunisia and the Congo. Irizar even sold into the United States, but that trade failed when the importer went bankrupt.

Irizar further expanded with a factory in Brazil and launched the Century coach in 1998 with a local partner at first but now wholly owned.

In 1999 the company founded Irizar Mexico with a factory erected in Queretaro where it offered lower-height, multi-purpose, Intercentury and Century coach bodies on Mercedes-Benz and Scania chassis.

In 2001 Irizar added the PB to its range, aimed at the highest luxury segment. This dramatically styled coach has many novel features including air conditioning concealed under a cowling at the front of the roof. It became available at optional heights of 11-ft 6-in and 12-ft 2-in, as well as various lengths from 40-ft to 49-ft.

That same year, Irizar entered into a joint venture in India with Ashok Leyland, a major chassis manufacturer, and coach body builder Sundaram Industries, with each partner holding a one-third share. Again, a visionary move ahead of its time as India was just starting to embark on massive highway construction that opened up long distance and commuter coach travel.

Sundaram Industries provided a skilled workforce to assemble a version of the Intercentury to meet Indian conditions. Presently the two factories in India are capable of building more than 2,000 bodies per year.

In 2004 Irizar updated its highly popular Century range, restyling the front and rear faces. By this time more than 15,000 of the previous Century coaches were operating in 65 countries. The New Century went into production not only in Spain but also in Brazil and Mexico, and in China two years later.

In 2006 Irizar opened a factory near Pretoria, South Africa, to assembly bodies supplied in kit form from the plant in Brazil. Since all the factories were building bodies to exactly the same designs and dimensions, subsidiaries could help each other out in times of very high demand.

The Intercentury coach family received its upgrade in May 2007 with the launch of the i4, as well as another variant launched in April of this year. The i4 range offers a choice of internal floor and gangway heights in lengths up to 49-ft.

The floor in the front part of the vehicle is only one step above ground, helping to speed up journey times on relatively short routes while still offering good seating capacity compared with a standard city bus.

In a dramatic shift in May 2008, the members of the Irizar co-operative voted to cut their links with the Mondragon Corporation. Irizar had developed a management model which was different from that of its parent and needed greater flexibility in ever-changing international market situations. The decision also included two subsidiaries, Hispacold, which makes air conditioning, and Bode Masats, a manufacturer of doors and lockers.

Last year, the Irizar factories around the world sold 4,244 coaches, with six per day coming out of Ormaiztegi. Turnover increased by 14 percent over 2007, reaching the equivalent of nearly $700 million. Sales outside Spain accounted for 82 percent of that total. It is an amazing increase from the $28 million turnover in 1991.

Today with its broad product range Irizar is in a better position than many to withstand the global financial crisis. The economy adversely affects top luxury coaches in some markets where passengers tend to have less disposable income.

On the other hand, interurban and scheduled coach services are normally resilient to recession. Many people look for more cost-effective transport, and that is where coaches come into their own.

Doug Jack is with Transport Resources in the United Kingdom.

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Posted by on Jul 1 2009. Filed under Letter From Europe. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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