If you’ve been part of the automotive industry long enough, you may already know that the last Australian-built car rolled off the production line in Adelaide in October 2017. However, did you know that without urgent government intervention, 2027 could be the last year that buses and coaches are manufactured or assembled on Australian soil?
Our country has a long and proud history of manufacturing world-class public transport buses that, importantly, are designed to last for 25 years of operation. Our industry has provided generations of workers with secure, well-paid jobs, often in employment black spots such as the outer suburbs of our capital cities. Specifically, the bus and coach manufacturing and supply chain employs 10,000 people and contributes $5 billion to the economy annually.
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But, over recent years, the sector has been squarely hit by a cascade of mounting costs, state and territory governments boom-and-bust procurement cycles and contractual constraints, including on purchase prices, along with workforce shortages.
Some of the external factors adversely impacting the industry include hyperinflation, cost increases of materials, wages and sea freight, and supply chain uncertainty in general. Plus, we can also add the contract restraints which limit price adjustments far below CPI and PPI (without actually taking into account the external factors mentioned previously).
All of these have left their mark across the full spectrum of the industry, regardless of whether a vehicle has been locally manufactured and/or assembled or imported as a complete bus unit (CBU).
On further analysis, suppliers run the real risk of operating at irreversible financial losses or, worse yet, already incur substantial financial losses even though they are currently booked up for the foreseeable future.
Case in point: Mercedes Benz Bus, Hino Bus, Iveco Bus, Hyzon and E-Busco – all bus manufacturers and chassis suppliers – closed down their operations in Australia since 2021.
And just last month in August, Australia’s third-largest bus body builder entered voluntary administration.
We’ve come down from 100 per cent of our buses and coaches being manufactured in Australia over the past 20 years, to 87 per cent in 2013 and now just 64 per cent in 2023.
So, what needs to happen in the short term if there’s any chance to ebb the flow of the nation’s bus and coach manufacturing and supply chain atrophy? In the very first instance, Australian and State, Territory Government assistance is urgently required if we have any hope to curb the seemingly unavoidable collapse.
Building zero emission buses (ZEBs) is a manufacturing growth opportunity that supports public transport and related key emerging industries, such as battery manufacturing (which was identified as a priority under the Australian Government’s A Future Made in Australia’ Policy).
With more world cities committing to purchasing only ZEBs from 2025, we have the chance to create a brand-new export market, especially if Australian Design Rules are harmonised with Europe.
Dealing with this perfect storm of escalating costs and the contributing factors impacting bus and coach is one of the Bus Industry Confederation’s main areas of advocacy.
The above overview is completely detailed in its recently revised The Bus and Coach Supply Chain in Australia: An industry in Crisis paper, which may be downloaded via the BIC website.
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