CH Bus Sales: Three years later
CH Bus Sales solidifies TEMSA in North America. The principles speak to BUSRide on the first three years forming the company, bringing three coach models to market and establishing aftermarket support
By David Hubbard
CH Bus Sales, Inc., Faribault, MN, reorganized in September of 2011 with new ownership and management to serve as the North American distributor of TEMSA Global motorcoaches, a division of the Sabancı Group, headquartered in Adana, Turkey.
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Over the last three years, CH Bus Sales led by a handpicked team of industry veterans has successively introduced three TEMSA models and launched its sales and aftermarket service networks.
BUSRide spoke with President and CEO Bob Foley; Executive Vice President, Sales and Service, Duane Geiger; and Vice President, Sales, Service and Product Development, Tim Vaught about the company’s progress, its products and partnership with TEMSA.
Coming to the end of 2014, do you feel you have reached a plateau where you can catch a breath?
Bob Foley: Three years ago, this is where we hoped we would be. We have 500 TEMSA coaches in the market, and we’re planning to open our third sales and service center next year. We’ve also extended our partnership with TEMSA Global, but we can’t exactly take a breather. There is a lot of work ahead.
What excited you in the formation of CH Bus Sales?
Foley: Each of us had worked together at some point in our careers. The group had expertise in the different areas that are needed for motorcoach distribution. We are a small organization with some crossover in our roles. Some of us wear more than one cap, but we never have to worry about someone not understanding their responsibilities, and that was a big help in getting the group off to a good start.
Tim Vaught: For me, it was the opportunity to work with Bob, Duane and Tony Mongiovi. Even though we had worked together for many years, this is our own project. It was exciting for me to get in on the ground floor of what looked like a very exciting company.
Duane Geiger: We believed each one of us could do the job, and we have since surrounded ourselves with smart and professional people. We communicate well and we service our customers. We all understand what we need to do to be successful in this industry.
What is the state of CH Bus Sales at this point?
Geiger: In 2012, our first calendar year, we sold 100 new coaches. We sold 150 in 2013 and this year we will reach 200. These are not huge numbers but they are good numbers for a new high-quality coach in new markets. These numbers reflect our earlier introduction of two TEMSA models, the TS 35 followed by the TS 30, and the TS 45 this year.
Foley: While we are proud of our progress, I have never found a situation where operators come looking for us. We will always go out and meet our prospective customers. Many may know of us, but several still do not know who we are. We have several demos in the field that we take from one operator to the next and continue to knock on doors.
Trace a few keystones that helped CH Bus Sales gain a foothold.
Geiger: We are fortunate to have TEMSA Global as our partner in Turkey. The company is an excellent manufacturer, which helped us greatly in introducing the 35-foot TS 35 and gain credibility. This alone stands out with me, as our customers are seasoned bus companies throughout the country and they’re used to buying coaches. They are coming to respect the TEMSA brand.
Foley: The biggest step, of course, was to put together our original team to build a consistent structure for receiving and delivering TEMSA coaches. Today we are up to 45 employees in our offices, service centers and in the field.
Vaught: Much of that has to do with the systematic approach we have established not only to sales, but also to aftermarket service and warranty. Marv Borntrager joined our team early, to manage parts/after sales service (warranty & technical) and has done a great job. We have streamlined all the processes from delivery to the service centers. Our consistent, repetitive delivery process is an immense help in quality control.
Foley: We are fortunate to have found our location in Orlando, FL, so quickly. It is so conducive to what we wanted to accomplish with a consistent receiving and delivery process. We turn our PDIs and dealer-option installs quickly and the same way every time. This helps immensely in quality control for coaches going to market.
What is the excitement in working with TEMSA Global?
Foley: It has been exciting to work with TEMSA to create what we see as a unique niche in the industry. I truly believe leading off with the 35-foot TS 35 was the right approach for TEMSA because it was the only full-monocoque 35-foot bus in the North American market. It has certainly worked to our advantage in getting operators to know TEMSA and our new company.
Vaught: After reviewing the product, I could see the heart that TEMSA Global had for the North American market, and they were more than willing to work with us to make the necessary improvements to the coach to best suit American operators.
What are some changes you initiated to Americanize the TS 35?
Vaught: We used high quality products that are long lasting, implemented subtle cosmetic changes such as redesigning the step well and entry, and reorganized the dashboard area. Our list of minor changes added up to a big difference.
Not to beat a dead horse, but you did inherit the issues associated with the Caterpillar (CAT) engines in the first TEMSA TS 35s delivered to North America. How did CH Bus Sales manage that situation?
Foley: I can say this: Had the early coaches come with Cummins engines, perhaps TEMSA would have enjoyed a better introduction to North America operators. I realized CAT had some issues, but I just assumed the company was going to fix them — and it never did. It took us about four months to realize the assorted issues inherent in the CAT powertrain were essentially unfixable. There’s no question that we were nervous.
However, at that point we had delivered 10 EPA 07 models with Cummins engines, as well as EPA 2010 demos that arrived in the fall. The Cummins-Allison combination has worked out very well.
Did you convert to Cummins-Allison exclusively?
Foley: We were converting to Cummins as we were coming on board and trying to figure out how to deal with the remaining inventory; how to take care of existing customers who had purchased TEMSA coaches with CAT powertrains, still feeling confident that they were going to work. Some customers never could get them to work, others did okay on short runs where they could bring them in for regens more often between runs. Then we started repowering the CAT powertrains. Fortunately, we didn’t have a great number of units; a total between 60 and 70, so it wasn’t as big of an issue as it could have been. It was a serious issue nonetheless. We have sorted through it.
No question, this situation created some negative PR, but a number of operators knew the members of our group from before and trusted us.
When we asked them to demo the Cummins-Allison combination, they put their foot in the water with us. It has worked well for them.
How significant was it to lead with the TS 35 instead of a more conventional full-size coach?
Foley: This approach has allowed CH Bus Sales and TEMSA to gain a foothold in North America without the traditional 45-foot manufacturer competition. If we would have lead with a 45-foot model, folks might have been a little reluctant because of their brand preferences at that point.
North American coach owners have struggled to find a shorter vehicle that would hold up. Introducing the TS 35 and following with the 30-foot TS 30 has allowed us time and space to work with operators and have them realize TEMSA builds a high quality product.
Geiger: When we went out to meet operators in 2011, charter folks told us their tour groups were smaller than they once were and we got the feeling many operators were perhaps filling some but not all of their buses on every charter. It wasn’t much more than our educated guess that they were ready for a solidly built full-fledged 35-foot motorcoach.
Vaught: The shorter TEMSA coaches are in no way a downgrade, but rather the perfect solution for a smaller charter group.
Geiger: Most of the operators we talk to are getting 90 to 95 percent of the revenue they charge for their full-size coaches; and in some cases, the cost to operate the smaller coach is 50-percent less.
We also have talked to some operators who have actually quit counting passengers. It didn’t matter if there were 30 or 55 riding their 45-foot coaches. With their TS 30s and TS 35s, they have started counting passengers again and measuring utilization.
Foley: We have heard many times how spread out a tour group of 25 or 35 passengers becomes on a 45-foot coach, which is not the quaint atmosphere they enjoy. If you put a group of this size on a smaller coach of the same quality, it is a better experience.
How is CH Bus Sales faring specifically in the midsize bus market?
Foley: For the TS 30, the cutaway bus market is our competition. When companies are working with groups of 25 and 30 passengers for shuttles, schools and colleges, the cutaways work well in certain applications. For the groups that expect a little better ride more akin to a coach with more comfort and luggage underneath, though, that’s where the TS 30 is a perfect fit.
Geiger: We talk to operators about utilization. If they can fill their 45-foot coaches, then that’s the way to go. However, with group sizes getting smaller for a variety of reasons, for charters of less than 40 passengers, it is nice to offer an alternative to a half filled vehicle.
What has the response been to the 30-foot TS 30?
Foley: The TS 30 gives an operator even more versatility in booking smaller charters and longer school travel. However, we have had to convince many in the industry on the merit of this coach. One has to understand the quality, longevity and that this coach is more versatile, in order to justify the price over a cutaway.
Was there always a plan to introduce the TS 45?
Foley: The TEMSA factory was more than willing to work with us to eventually develop a 45-foot coach. At first I didn’t think we really needed the 45-foot coach, but customers were soon requesting the full-size coach because of their success with the TS 35. We delved into it two years ago and are having success.
What does it mean to be able to offer three TEMSA models in different lengths?
Foley: Our family of three models is a distinguishing factor that separates CH Bus Sales. Other OEMs may promote other models and styles, but not as closely related as the three TEMSA coaches we offer. As a company, we need more than one model to build a sufficient volume of sales, and our family of TEMSAs gives us more to offer our customers.
What is the state of CH Bus Sales aftermarket service at this point?
Foley: We are right on track, growing one step at a time. We most recently opened our sales and service center in Fort Worth, TX, and have an expansion plan for other regions of the country. We will be opening in the Northeast in 2015, which will give us stronger presence in New York and New Jersey. We are also putting more mobile service technicians in place.
Can CH Bus Sales share any secret to its early success?
Geiger: We are not ordering as many coaches as we could, simply because we are not necessarily trying to sell as many buses as we can. One of our policies is to sell only as many coaches as we can service correctly and efficiently.
Foley: Putting too many out there too fast and not being able to service them is worse than not selling enough.