Alliance Bus Group represents all of the major small and midsize bus OEMs.
Please offer an executive summary on the current state of the small and midsize bus industry. Vern Kauffman: From a manufacturer’s perspective, we’re not typically involved in the day-to-day business of operators. But, in general terms, something that is on every independent operator’s mind these days is the app-based services. Uber is at the top of the list, and so is Lyft to some degree. I think that’s one of the more pressing issues in the mind of the operators, or at least the people that we talk to. Ken Becker: From a small/medium commercial cutaway bus manufacturer, the big issue is of course money. FTA-funded deals pay for typically 80 percent of our product that we build. We see swings in this as the budget is released every year, but we’re ok. I attended the Mid-Size Bus Manufacturers Association meeting yesterday and it was very interesting. Interest rates are going to eventually go up. They’ve been low for a while, so money’s been cheap. That’s not going to last forever, it’s only going to go up and it’s a matter of the next couple of years. Spending is tight but it is starting to loosen up a little bit. That’s a good thing. I’d say the overall state of the industry is down a little bit right now, but we’re ok. We should have a strong third and fourth quarter. Troy Snyder: Our business is not slowing down. We’re optimistic that the market will stay at its current pace. All in all, the market is flat to slightly up and we don’t envision any slowdown in the near future. Randy Angell: CH Bus Sales/TEMSA are sort of the new people to this industry, although we started in 2011. We started with a 35-foot midsize motorcoach, but we’re a little bit different than the cutaway business in the sense that we’re a monocoque design, full stainless steel coach. It’s been a good niche for us and we’re actually trending up because we deal with customers that have line runs and also do charter tours. We’re doing very well with our midsized and smaller coach and a lot of that business is coming from tour groups getting smaller. A lot of sports teams use our vehicle as well, and it has a lot of intercity applications. The groups are smaller, so we feel that’s our niche right now. Another big part of our manufacturing process is the luggage capacity, that’s a big deal and a big bonus. Becker: We’re seeing a similar trend in Canada with the benefits of smaller buses vs. big city-transit buses. If you’re not filling that heavy-duty transit bus, the smart way to go is the smaller vehicle. K. Cihan Yaycioglu: Before we entered the United States market, we never thought to enter the shuttle market. In Europe and in Turkey there are different sizes of motorcoach. The 30-foot and smaller motorcoaches are very common there as well. The market here, as Randy said, has groups getting smaller and
smaller. It’s becoming very costly for customers to keep using 45-foot motorcoaches, but that customer wants the same customer level in our 30-foot bus. The current state of the small and midsize bus industry is that every year it’s getting bigger and bigger for us. The big fleet owners are looking for a smaller vehicle that services the same comfort level. Jamie Sorenson: The bus industry is wide open for companies willing to accept challenges, from new compliance legislation, emerging technologies in relation to materials and techniques, as well as addressing customer concerns over bus design. I think the cutaway transit bus has been viewed by many as a commodity with a fixed life cycle. It’s our responsibility as manufacturers to invoke change in the industry by listening, observing, researching and building a better product. In what ways are you seeing the small and midsize bus industry grow and advance? Doug Dunn: From the dealer’s perspective, we haven’t seen a lot of growth overall in the marketplace. It’s been rather stagnant the past three years with little blips up or down. It’s obviously difficult for the industry to grow in that environment. It’s caused increased pressure on margins, competitive pressures are higher and it’s been a difficult time to grow and gain market share. Kauffman: We’re seeing coach operators, as the others were saying, who typically run bigger coaches now catering to smaller groups. We’re focused very heavily on the Sprinter platform and that’s one growth area we’re seeing – the big tour operators with a new offering in their service. Gary Rivers: We’re reaching a new market by getting out with those coach operators that we haven’t served in the past. These customers are looking for an alternative to their 50-passenger coach that will service customers in the 30-35 passenger range. That’s where we’re growing rapidly. The biggest opportunity for these coach owners is the price point, which is much less compared to a large coach. They also may need to serve groups of only 30-35 passengers and a large coach is too much expense for that. Our M2 Vista fits nicely into that niche. Becker: This is something that every manufacturer or dealer thinks about. There’s only a few ways to grow. How do you make 15,000 units, for example, become 20,000 units? That has to come from somewhere, and I mean it has to be taken from some other industry. With the small/medium cutaway bus, one way we’re seeing it grow is by taking business from large transit buses. Transit agencies with a large fleet are saying, “We don’t need this heavy-duty rearengine transit bus, we could do it with two small cutaway buses.”
The M2 Vista from Ameritrans
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