Bus body builder Volgren sees market confidence re-emerging soon
As New South Wales-based bus builder Custom Coaches enters voluntary administration, Victorian counterpart Volgren is also feeling market pressure, coming mainly from imported product, yet is determined to prove that the strongest will survive.
Volgren CEO Peter Dale says a marginally tough market is affecting all bus industry suppliers, not just body builders.
“The market is marginally tough at the moment and only the best will survive,” Dale says.
Dale says there has been a decline in route buses in particular, which can largely be attributed to a decline in infrastructure investment.
“The more recent slow-down has been more in the route bus market,” he says.
“From where it sits now, it’s difficult to know how long until the market will recover.”
Dale says the industry will continue as buses have got to be replaced, particularly as urban population growth is predicted.
“Times are tough, volumes are down but generally the industry looks pretty strong,” he says.
“The underlying bus industry in Australia is strong.”
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Dale says there has been a noticeable increase in completely built up units being imported into Australia, particularly in the school and charter markets.
“I think it’s also interesting to note that last year [2013] not only the volume but the proportion of imports dropped off a bit.”
He says there are also more players in the market which offers operators many different choices when it comes to purchasing new buses.
“It’s not just more volume of imports,” he says.
Dale says feedback he has received suggests the quality of the imported buses may not be as good as the locally built vehicles.
He says the advantages of having an Australian-built bus include vehicles being made to order, superior quality and shorter loading and shipping times.
“There’s still, I believe, a very strong desire among operators to have a bus that they want,” he says.
“That’s the bus that meets their specific needs.
“I don’t think it matters whether it’s a government fleet or a small private operator.
“Those specific needs can be met best by a local builder.”
He says quality is also a significant advantage of having an Australian-built bus body.
Volgren was recently bought by Brazilian-based company Marcopolo, who have been astounded at the quality of Australian-built buses.
“They marvelled at the level of quality in Australia compared to that around the world,” Dale says.
“It’s probably going to take some time before imports can truly reach the standard of local builds.”
Dale says a local build also has a shorter loading time, can be more flexible and cuts out the long shipping times.
“That means local build can meet original delivery times when it really matters,” he says.
“I think they are three key advantages of an Australian-built bus body.”
Volgren is working hard to remain competitive in the increasingly crowded marketplace.
“Behind the scenes and out in the market we’re working really hard to remain competitive,” he says.
The company recently launched two new products; the Optimus and Endura buses.
Dale says Volgren is committed to its customers, and coming from a background starting as an operator is a huge advantage given its legacy of ownership by the Grenda family, who operated bus fleets across Melbourne and sold a majority stake in the bus building business three years ago.
“Looking at a bus operator’s bottom line, it’s not about price it’s about the lowest cost of total ownership,” Dale says.
He says the future is looking bright for Volgren, and with support from Marcopolo they plan to expand into the global market.
“Because we’ve got a plan we’re on track and we can see where we can improve and how we can improve to be generally competitive.”
The company is currently working on an order for articulated buses to Niigata city, Japan, due to be delivered in September.
“This order says a lot about the quality, compatibility and competitiveness of the local bus building industry,” Dale says.