The world of buses and coaches for 2012
The International Report
By Doug Jack
Every two years, I research and write a large part of The World Bus & Coach Manufacturing Industry 2012 on the world’s bus and coach manufacturing industry. It concentrates on vehicles above eight tons gross where the estimated global production last year was around 320,000 units, excluding North American school buses.
China and India are by far the largest producers. It is quite difficult to obtain accurate data from China, because of the relatively small number of manufacturers making chassis but up to 130 bodybuilders. The latter tend to put their names on the completed vehicles. Many are supplying regionally and some are subsidiaries of city transport operations — in-house builders in effect.
The industry in China is changing, albeit slowly. The government wants to consolidate manufacturing into a much smaller number of large players capable of benefiting from economies of scale. However, the high levels of competition are encouraging innovation and there have been significant improvements in engineering and quality over the last 10 years. Exports have been increasing in number but there is still a very high level of demand from the domestic market, especially for city buses.
There is no doubt that the Chinese have taken a lead in the development of all-electric city buses. There is still a challenge to build vehicles with sufficient range to work all day in city traffic. One solution is to provide fast charging stations along a route and at each end.
The situation in India is quite different. The two major manufacturers, Ashok Leyland and Tata, are in the top five in the world. Western European manufacturers led by Volvo have started building in India, introducing engines that are more powerful. Features such as automatic transmissions and air suspension are driving up the standards of buses in India.
Although Western Europe accounts for just fewer than 10 percent of global production, manufacturers have a strong influence in many other parts of the world through subsidiaries, joint ventures, licensees and direct exports. They are particularly strong in Central and South America. Daimler and Volvo control major Japanese manufacturers.
The structure of the manufacturing industry continues to evolve. Volkswagen already had a majority shareholding in Scania of Sweden. Last year, it acquired a similar majority in MAN of Germany, which required clearance from the competition authorities in Europe, Brazil and China, making Volkswagen a global automotive giant.
European manufacturers Irisbus (Iveco), MAN, Mercedes-Benz, Scania and Volvo are vertically integrated companies, meaning they make their own engines and other drivetrain components. Their coaches often have a high degree of commonality with trucks, which helps with the provision of parts and service. City buses invariably have fully automatic gearboxes sourced from specialist suppliers like Allison, Voith and ZF.
I also added the VDL Group of the Netherlands and Alexander Dennis (ADL) of the United Kingdom, the one European manufacturer really growing strongly. VDL buys engines from DAF (Paccar) and Cummins, while ADL uses Cummins exclusively. It is quite amazing how many bus manufacturers around the world rely on Cummins power units.
A highlight of the report is the series of interviews I conducted with the chief executives of the top seven European manufacturers. I particularly wanted to find out who among them had a major breakthrough or was taking a different direction. I found no sign of that, but they did speak to some interesting developments in engines, hybrid systems and alternative fuels.
All are preparing for the introduction of Euro 6 emission limits, which come into force in January 2014. These will require much larger cooling systems. On coaches, the additional weight is a problem, especially on touring coaches when they have a full complement of passengers and luggage.
The European manufacturers are moving at a different pace on hybrid drive systems. Volvo and Alexander Dennis are very comfortably into volume production — the former with its own in-house system and the latter in conjunction with BAE Systems. MAN, Mercedes-Benz and Irisbus are somewhat behind. The two German companies work with Siemens, while Irisbus uses BAE Systems.
Irisbus recently secured an order for 102 hybrid buses for the French city of Dijon. Part of the deal was to take back in exchange around 60 gas-fueled buses. Scania is running behind the others on hybrid applications. It may be another two years before they reveal their plans, which is interesting because Scania is a very thorough engineering-led company that has remained profitable even in the worst of the global financial crisis.
Mercedes-Benz is also building fuel cell hybrid buses, now in the third generation in which efficiency is substantially better and prices are a little lower. However, fuel cells as a practical alternative are still a few years away. Much depends on what happens with the price of oil over the next decade.
Gas no longer has the advantage, which once led diesel engines in terms of emissions. Demand for gas-fueled buses has fallen off in most European countries, with the notable exceptions of Norway and Sweden. There is strong political pressure to use biogas or compressed natural gas, even if it means devaluing the buses virtually to zero over a five to seven year contract.
All the manufacturers were concerned over lingering serious financial problems in some of their main markets. With a shortage of public funding, city authorities find it all too easy to defer the purchase of new buses for a year or two. Although the interurban and express coach sectors have held up well, the economy has hurt top-end luxury coaches due to less demand for inclusive tours and through competition from low-cost airlines.
Some of the manufacturers publish their financial performance. Others include them in the overall commercial vehicle operations. Scania is probably the most profitable and one of the leanest. Mercedes-Benz makes a reasonable profit buoyed last year by the strength of the Brazilian market. VDL Group admitted to a slight loss due to high development costs of new models that are now in volume production. They felt much more optimistic about 2012. Profits are marginal for the others and not helped by the high development costs for Euro 6.
In 28 chapters, report topics include legislation; diesel engine, alternative driveline and transmission developments; alternative fuels; chassis equipment; body systems and components; climate control; electrical systems and telematics. The following chapters review activities in various regions of the world and include registration and production data for the main markets.
In the developed world, high levels of car ownership mean ridership tends to increase mostly when the price of oil rises. Express coach services should benefit as commuters become more selective about using cars in urban centers.
In the developing countries, the majority of people will never own cars and always require public transport — largely by minibuses on fixed routes. For instance, in the mega-city of Lagos, Nigeria, more than 100,000 minibuses form the backbone of the public transport system.
These small vehicles cause a large amount of congestion and pollution and have a poor safety record. Authorities would love to replace them with larger buses. However, they can only proceed steadily over time, because the small buses provide employment for many people. Again, the price of oil may well be a contributory factor in reducing the numbers of minibuses.
Truck & Bus Builder Reports Ltd in Taunton, England publishes The World Bus & Coach Manufacturing Industry 2012 report. For further information, visit www.truckandbusbuilder.com. The report is an essential reference document for anyone in the manufacturing and component industries. But of course, I would say that. BR
Doug Jack is with Transport Resources in the United Kingdom.