Daimler, MCI sign letter of intent for strategic partnership

By David Hubbard and Glenn Swain

In a move it says will reconfigure its motorcoach business in North America, on Wednesday Daimler announced it had signed a letter of intent with Motor Coach Industries (MCI) to create a partnership that would result in MCI acquiring the Setra business in North America. Daimler and MCI expect to finalize the deal no later than May 31. Daimler would receive minority ownership in MCI, while MCI would become the North American distributor of the Setra S417 and S407 motorcoaches. As soon as the proposal is finalized, MCI plans to review Setra operations in North America to determine how to integrate it with its current facilities.

MCI CEO Rick Heller said the proposed partnership would allow MCI to expand its luxury motorcoach presence in North America with, what he called, “one of the world’s leading manufacturers” of buses and motorcoaches.

“We are not changing the MCI product line, we are just adding Setra,” Heller told BUSRide on Wednesday. “Having Setra in our product portfolio broadens our offering. Setra is a luxury European motorcoach, and enables MCI to compete in a market segment in which we have not had as strong of a presence until now. We have the E-model, but this brings the European aspect to our company.”

Heller said Daimler’s expertise in manufacturing, engineering, advanced technology and extensive supply chain will enable MCI to progress quicker than the company could on its own.

“Specifically, we can look at engineering as an example,” Heller said. “MCI has very capable engineers, but Daimler clearly has some of the most advanced engineering capabilities in the world. Now as a result of its ownership in MCI, there will be collaboration on the engineering side. Our plan is to support Setra products through the MCI infrastructure, and the Setra brand becomes stronger and more relevant throughout the United States and Canada.”

“The Setra motorcoach represents the highest standards of comfort, performance, customization and quality in a number of key regions worldwide,” said Hartmut Schick, Head of Daimler Buses. “We’re excited at the prospect of this partnership with MCI, which is a leading manufacturer of coaches in North America with top-flight distribution and service networks in the U.S. and Canada. Under a Setra-MCI partnership, customers will continue to enjoy the same state-of-art technology, quality German engineering, and best total cost of ownership in the market. A strategic relationship with MCI will carry forward Setra’s proud tradition in North America, and also take it to the next level – through increased local presence and enhanced customer services for Setra.”