July 2009

Despite hesitant buyers, coach builders forsee sales uptick by year's end

by METRO Staff

Two major manufacturers, Greensboro, N.C.-based Daimler Buses North America's (DBNA) Setra and Schaumburg, Ill.-based Motor Coach Industries (MCI), among others, have experienced slight sales dips, but still have a substantial amount of orders to fill.

Tom Chezem, vice president of motorcoach sales for DBNA's Setra, said that their first quarter sales numbers have tracked in line with the industry. "For us, it's down about 30 percent, relative to last year's numbers." The second and fourth quarters, he points out, tend to bring more sales. "In general, our North American market is in a similar situation to our markets in Europe, which are also down approximately 30 percent."

Patricia Ziska, VP/chief customer officer for MCI, said that the company has also experienced a dip in sales of 10 percent in the first quarter. "We may see our market down a couple hundred units this year," she added, even though she notes the manufacturer still has plenty of customers placing orders and public sector sales remain steady.

Chezem and Ziska acknowledge that operators are being more cautious. "Their businesses are doing well," said Chezem. "They're enjoying the benefits of lower fuel costs, experiencing some increased ridership and enlarged customer base because of the high prices of fuel last year, more people are riding, so they do see their business maintaining strength, but they're holding off on big capital investments." Most customers, Chezem added, are waiting for a signal on the third quarter.

Ziska is encouraged by low interest rates and available grants. "Operators are able to get financing. In a lot of places, the tight credit markets make it very difficult to make big investments, but we still have a very steady line of credit for our industry." The Federal Transit Administration (FTA) 5311 F, a rural funding program, she added, can benefit many operators if they're able to fill a needed niche: connecting cities by developing a line haul route. "We'll probably sell an extra 40 to 50 coaches this year because of that funding," Ziska said.

There are a couple of larger orders on the horizon, including the Prevost sale to Greyhound of 140 X3-45 models which should be starting to deliver, Chezem points out, and that could prop up the entire market.

Tim Tang, owner of Santa Ana, Calif.-based Galaxy Coach, which builds approximately 75 percent limousines and 25 percent motorcoaches, said he began preparing for the downturn with the limousine side of his business last year, and that also helped him accommodate the dip in the motorcoach market. "In early 2008, we started seeing this trend [with] the whole industry going slower, because of the financial crisis. We found out the limo service business was down by at least 30 percent on average. For close to three months, our business was very slow, until February or March, when everything came back," he said.

Simultaneously, he said, it seemed like the coach side of the business was gradually gaining and he saw an opportunity to become more prominent in that area with their Partyliner bus. They targeted the charter bus industry and received a lot of positive feedback. The move enabled Galaxy to survive, he added.

One builder and operator, however, is struggling to keep up with a jump in business. Frierson Michener, president and CEO of Florence, Ala.-based Senators Coaches, said that 2009 has been just as strong, thanks largely to tapping the college football market. "In the deep south, the market is stronger in the second half of the year, because...we have college football. There's a lot of coach use for that."

Michener added that Senators will probably increase the size of their corporate fleet by re-converting the buses they use for national tours into corporate or executive buses.

Chezem anticipates that as long as the market remains relatively stable and operators continue landing the same level of business, confidence will snowball, and buying will increase in the late third and fourth quarters, with year-end financing specials and model changes.

Ziska ultimately had an optimistic outlook for the future of coach sales. "We feel good about where we are...we have the right products, and with the attention to green [practices], and protecting the environment, more and more people are looking to motorcoach as a way to make an impact. I think it's going to ...flourish and become more of a movement in this country."

 


Write a letter to the editor
deli.cio.us digg it stumble upon newsvine
[ Request More Info about this product / service / company ]

    There are no comments.

E-NEWSLETTER

Receive the latest Metro E-Newsletters in your inbox!

Join the Metro E-Newsletters and receive the latest news in your e-mail inbox once a week. SIGN UP NOW!

View the latest eNews
Express Tuesday | Express Thursday | University Transit

White Papers

Mass Transit Capital Planning An overview of the world-class best practices for assessing, prioritizing, and funding capital projects to optimize resources and align with the organization’s most critical immediate and long-term goals.

The Benefits of Door-to-Door Service in ADA Complementary Paratransit Many U.S. transit agencies continue to struggle with the quality of ADA service, the costs, and the difficulties encountered in contracting the service, which is the method of choice for a significant majority of agencies. One of the most basic policy decisions an agency must make involves whether to provide door-to-door, or only curb-to-curb service.

Mass transit mobile Wi-Fi & the public sector case study How Santa Clara Valley Transportation Authority successfully implemented Wi-Fi on its light rail and bus lines

More white papers


 
DIGITAL EDITION

The full contents of Metro Magazine on your computer! The digital edition is an exact replica of the print magazine with enhanced search, multimedia and hyperlink features. View the current issue