EXCLUSIVE: No slow zone


With the tax rebate coming to a close, December 2010 brought on strong bus sales and optimism that 2011 won’t be a slow year

EXCLUSIVE:  No slow zone
<b><font color=red>EXCLUSIVE: </b></font> No slow zone

January 19, 2011

It was a race to the finish to get those tax-concession vehicles delivered by December 31.

This is reflected in the total vehicles delivered for the month as 2010 ended on a high note with 196 units – the best result since June.

Under the terms of the Federal Government’s tax rebate for small businesses, operators were required to have their new vehicles in place by the end of December.

This put pressure on suppliers and pulled some early 2011 business into late 2010.

Industry observers believe the artificial stimulus will create a softening effect at the start of 2011, but this might not be as deleterious as first thought.

A measure of how demand may stimulate supply in the months ahead is with the finance brokers backing operators into new equipment.

Director of Bus Finance Australia Finance Brett Collins says some operators couldn’t buy buses for the sake of buying buses in 2010.

"If a vehicle in your fleet hadn’t reached its age specification under a government contract you had to take the risk yourself to buy a new vehicle."

He says any vehicle not due for replacement under a Government contract and deemed to be still operational meant that vehicle should continue in service.

Despite many in the industry expecting a cooling in sales for 2011, Collins believes it will still be busy.

He says an indication of how busy 2011 will be is measured in the number of inquiries for quotes on new equipment. Toward the end of December Bus Finance had already started to fill its 2011 quote books.

"It’s a good indication that there will be a fair bit of activity in 2011."

Collins says it should be busy for everyone, from single to large operators. He says there will still be Government replacement schemes into 2011 and looks to NSW, Queensland, Victoria and Tasmania as the main states to see continued growth.

Another key area of interest in 2011 will be the creation of supply panels, particularly in NSW, where there are rumblings in the industry among the leading body, chassis and other parts suppliers, each concerned about the creation of a Transport NSW supply panel.

The grumble is about which suppliers will be chosen by the NSW Government for listing as preferred subsidised suppliers.

The idea behind the panel is that only suppliers appearing on the panel’s list will attract operator subsidies for Government-contracted vehicles.

An operator will still be free to choose a vehicle and accessorise with suppliers’ product not included on the list, but it would be at the operator’s cost and risk without Government subsidy.

Some say the new system is fair, in that having a supply panel with a list of preferred suppliers for operators to choose from ‘weeds out’ the fly-by-nighters and the lower-quality manufacturers; others say the result of the lack of consultation leading up to the panel’s creation late in 2010 is a situation where credible suppliers may be excluded. The fear is that some suppliers’ businesses will lose out financially.

NSW is Australia’s largest bus market, and Government-subsidised vehicles make up a big slice of that market. The panel could rationalise the supply-side of the bus and coach industry in NSW to the point where those left on the list could unwittingly be engaging in anti-competitive behaviour.

The Bus Industry Confederation (BIC) is investigating the situation to see whether there is any cause to get the Australian Competition and Consumer Commission involved.

As for the close of 2010, the league table leaders all held their positions at year’s end. Volvo, with 54, topped the chassis tally for the final month, narrowly edging out Mercedes-Benz’s strong finish to the year (51 chassis). BCI also finished strongly, its 17 vehicles delivered being its best result since July.

Volgren (75) again trounced the opposition with body supply, delivering about twice its closest competition, Custom (36). The Transit Australia Group-owned Bustech (22) finished the year well, jumping over Chiron/UBC into third spot.

December 2010 bus delivery data is available here.

For a complete record of January to December 2010 bus deliveries, check the Bus Search Bus Buyers Directory 2011 – available now.

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