Alexander Dennis reaches new heights
At the start of this century, Alexander Dennis Limited (ADL) had a turbulent history. It was owned by the Mayflower Corporation which collapsed, but ADL was then rescued by Scottish investors.
At that time, the company consisted of the Dennis chassis manufacturing facility in Guildford, about 30 miles from London’s Heathrow Airport, and the Alexander bus bodyworks in Falkirk, roughly midway between Edinburgh and Glasgow in Scotland. The business relied on sales to the domestic market, Hong Kong and North America.
The product range consisted of the Enviro200, a midibus around 12.5 tons gross, the slightly heavier and longer Enviro300 at around 14.5 tons gross, the two-axle Enviro400 double-decker bus, mainly for the British domestic market, and the Enviro500, a tri-axle double-decker bus selling mainly in Hong Kong and North America. Their respective gross weights were around 18 and 24 tons.
Colin Robertson returned to his native Scotland as CEO in the spring of 2007. ADL’s turnover was then around $250 million per annum. He had plans to grow the business significantly and said: “I would be very surprised if we had not doubled the business from its present size, at a minimum, in five years.”
Within a few weeks, ADL bought Plaxton Holdings, the last remaining builder of luxury coachwork in the U.K. and a well-respected brand. Plaxton is based in Scarborough, on the north east coast of England. Although it retained a degree of autonomy, it had extensive facilities and soon became the Group’s production center for midibuses. All Alexander Dennis buses are framed in aluminium, while coach bodies use stainless steel.
Under Colin Robertson’s leadership, ADL has become more innovative and faster on its feet. Within a year of his arrival, it started development of a hybrid version of the Enviro400. This model used a small Cummins engine and BAE Systems hybrid drive. Most double-decerk buses in the UK are around 30-34 feet long, because of our old cities and congested roads. They are found not only in London, which is still a major market, but throughout the country. Most normally run full only at peak periods, but capacity of up to 90 passengers saves the costs of duplicate vehicles.
For North American markets, the Enviro500 was initially built to a length of just under 40 feet, but a 42 foot option followed later. These vehicles were virtually the same as large numbers that were being supplied to Hong Kong. Many of the latter were, and still are, supplied in kit form for assembly just across the border in China.
The global financial crisis hit hard and suddenly in the autumn of 2008. It decimated orders for new trucks, and the coach business was hit, because many of their customers were small companies that could not obtain bank finance. Fortunately, city bus orders continued to run quite strongly.
By 2011, ADL increased its turnover to around $550 million, thus achieving the target of doubling its revenues within five years.
The management team was strengthened and efforts were concentrated on three main strategies, i.e. to increase export volumes and markets, to further develop and refine the model range, and to ramp up aftersales and service support to very high levels.
Taking that last point first, Robertson receives twice daily a report of all vehicles that are off the road with service problems. He told me: “We have set a target of 99 percent availability which sounds a high figure, but if you have 1,000 buses, that is still ten too many vehicles that are off the road, and that is unacceptable.”
These reports are analyzed very carefully to check the causes of failure, such as a supplier, a design fault, a manufacturing process or a customer issue.
An early example of export expansion came in the spring of 2012 when ADL entered into a strategic joint venture with New Flyer Industries to promote the Enviro200 as the New Flyer MiDi in the US and Canada. This vehicle fits beneath New Flyer’s range, giving a wider product offering. The Enviro200 already used units that are well known in North America, including Cummins engines and Allison gearboxes. Teams from both companies worked to adapt the Enviro200 to North American conditions and to find local suppliers.
The Enviro500 was facelifted and up-rated mechanically. Until this time, it had normally been built to a height of around 14 feet, 4 inches, which was standard in Hong Kong. A lower height version, a “Go Anywhere” option, was launched for North America, to an overall height of 13 feet, 7 inches, still with perfectly adequate headroom on both decks. These vehicles could circulate without special permission on practically any route.
Coming up to date, at an exhibition in Birmingham at the end of September, Colin Robertson said that the turnover in 2015 would be around $900 million with a significant increase in underlying profitability. ADL unveiled the Enviro400H City, a stylish double-decker bus developed primarily for London. It had revised front and rear styling, and a fully glazed staircase. The H in the designation denoted hybrid, an opportunity for BAE Systems to confirm that the bus had the 5,000th hybrid drive system that it had provided globally.
For export markets, the SuperLo Enviro500 had been developed. This was just 12 feet, 10 inches high, capable of carrying 83 passengers. Toronto had placed an initial order for 250 vehicles with an option for a follow-up 150. ADL is equipping a 45,000 square foot chassis manufacturing facility near Toronto to support this order.
Colin Robertson confirmed that ADL would deliver 900 double-decker buses to Hong Kong in 2015, securing 80 percent of the market! It is one of the most demanding operating territories in the world, with high levels of traffic and heavy passenger loadings, despite competition from the MTR metro system. Land is so scarce in Hong Kong that there is only limited space for parking and maintaining buses. Many of them run round the clock, only returning for refueling and cleaning.
He also announced two further export markets. In New Zealand, the government wanted high capacity vehicles and had therefore changed the previously restrictive axle weight limits to accommodate double-decker buses. The first order called for 39, with further discussions underway.
The largest operator of double-decker city buses in continental Europe is BVG, Berlin. Another North American Enviro500 demonstrator recently entered a trial period with BVG which needs to replace 400 double-decker buses over the next year or two.
ADL is also involved in virtual electric and all-electric buses. Three prototype Enviro400 models are entering service in London. They will operate 70 percent of the time in all-electric mode, taking short fast charges from beneath the vehicle at each end of the route.
The company has also joined up with BYD so that they will body 51 BYD all-electric chassis, to enter service in London by August 2016. The two companies have a close relationship and have signed a contract to collaborate on up to 200 all-electric single deck buses per year over the next ten years, with a possible extension to include all-electric double -decker buses.
Colin Robertson was very positive when I checked a few facts with him before sending this report. He said: “I am confident that our turnover will reach the equivalent of $1 billion in 2016.” That is a four-fold rise from when he was appointed CEO less than 10 years ago!
Doug Jack is with Transport Resources in the United Kingdom.