Industry assessment foresees better days

by David Hubbard

For no charge I can offer this glimpse into the future of the coming demand for buses worldwide. According to The Freedonia Group, Inc, Cleveland, OH, an international business research company, demand will expand 4.2 percent annually to 496,000 units in 2014, which will reflect rebounding demand in North America following the 2009 recession, as well as sustained sales in many other markets.

However, any more keenly-focused product and market forecasts, industry trends, threats and opportunities, competitive strategies, market share determinations than this, as well as company profiles from The Freedonia Group are now available for the slightly higher price of $5,900. The complete 294-page report published in September 2010 is now available for purchase by the page or chapter.

The Freedonia Group publishes more than 100 industry research studies annually. The group says unbiased analysis such as it presents in its recent study, World Buses, provides a highly reliable assessment of this industry. Meantime, even the condensed sampler in the press release I received points to more fruitful years ahead for buses in a changing world.

World Buses analyzes the 403,700-unit global bus market. It presents historical demand data for the years 1999, 2004 and 2009, forecasts for 2014 and 2019 by bus type (namely transit buses and motorcoaches), world region and for 19 major national markets.

The study also considers market environment factors, details industry structure, evaluates company market share and profiles 37 industry participants that include Daimler, Hyundai and Navistar.

World Buses found that beyond North America and Japan, both of which experienced significant declines in demand in 2009 [see also BUSRide, October 2010, Letter from Europe, Doug Jack, Report from Japan] the global economic crisis has not had as negative an impact in many markets.

The study says the new sense of frugality taking hold among consumers in many developed markets, coupled with volatile fuel prices, have made bus travel a more attractive option for its cost effectiveness and fuel efficiency.

The Freedonia Group notes that demand for buses tends to be cyclical within markets and depends on region- or country-specific trends, such as demographics, income levels, relative spending on mass transit systems and per capita passenger vehicle density.

In North America, efforts by the U.S. government to stimulate the economy are already translating into a rebound from 2009 levels. Canada is likewise focusing billions of dollars on transit infrastructure, with up to one-quarter of this spending historically focused on buses.

Other forces expected to support bus demand include increasing congestion levels in major metropolitan centers worldwide and the establishment of dedicated and sometimes guided bus ways in key cities across Central and South America, Australia, France and the UK.

The bus market in North America is unique in several ways, notably for its use of specially designed school buses. The U.S. also lacks the dynamic passenger train, tram and subway systems so common in Europe and Japan, making bus travel the primary mass transit option in most U.S. cities. New investments in light rail projects in many U.S. states as a result of government stimulus funding could pose competition for bus sales. However, such spending could also stimulate transit bus sales in multi-mode passenger transportation systems. Western Europe and Japan will experience slower growth in bus demand compared to the United States due to stagnant population increases and aging populations, as well as the prevalence of other mass transit options such as rail. The Freedonia Group study sees China, both the largest market for buses and the largest producer, as one of the fastest growing bus markets going forward. The country could become a regional hub for bus production, although virtually all of its bus output to this point has focused on satisfying local demand. For further details about World Buses visit www.freedoniagroup.com.