It is no exaggeration to say that China could well emerge the bus manufacturing hub of the world. It was my second visit to Busworld Asia held in Shanghai during March 11-14, and I could see vast improvement in the quality and design of buses manufactured in China. An annual event held in Shanghai, Busworld Asia is organised by BAAV, which arranges the world’s biggest exposition for buses. The parent event is held in Kortrijk (Belgium) once every two years.
Although held every two years, the organisers of Busworld Shanghai decided to make Busworld Asia an annual event in view of the size of the Chinese market and its growth. This year’s event attracted participation of 300 companies. Coinciding with the Busworld Asia, the Asian Coach of the Week was also held. As many as 25 major bus manufacturers from China competed for this prestigious award. A team of professional journalists and technical experts judged the buses on various parameters and gave the final award for different categories. Higer, a prominent Chinese bus manufacturer, won the coveted award for the Coach Manufacturer of the Year.
China’s bus industry has been growing fast in the last few years. However, it is very difficult to get the exact production, sales and export figures. One has to rely on the information provided by the vehicle manufacturers. Based on the current production and sales of China’s 70 bus manufacturers, growth in this segment is expected to be far better than last year. Expansion of both rural and urban public bus transport as well as encouraging exports are the major growth drivers. China is in fact exporting to all major markets like the US, Russia, Australia, the Middle East, Africa and even to mature markets like Europe.
Further, China’s urbanisation rate is projected to increase from 30.4 per cent in 2000 to 45 per cent by 2010. Based on the estimated one bus per 10,000 people in cities, the total city bus population will reach at least 630,000 by 2010, registering an annual increase of 30,000-40,000 buses. If replacement is also taken into account, the number of buses will increase annually by 55,000.
Taking the Beijing public transport as an example, the number of public buses increased from 17,000 vehicles in 2005 to about 23,000 now. Beijing has invested RMB3 billion for public transportation for the forthcoming Olympic Games, involving more than 4,000 public buses. The proposed World Expo in Shanghai will undoubtedly encourage development of public buses in Shanghai.
Currently, most of the vehicles plying on Chinese roads comply with the Euro-III emission norms. All public vehicles will be required to conform to the Euro-IV standards by 2010. This would stimulate upgrade and renewal of a large number of buses in urban areas. With a steady inflow of both domestic and international capital, key bus factories will continue expanding, all the while creating a stiff competitive city bus market.
Bus Rapid Transit
Beijing has successfully adopted Bus Rapid Transit (BRT), a traffic concept based on low-floor buses. The benefits: shorter implementation times, less space requirements at bus stops and more flexibility. And often, this goes hand in hand with lower total costs, compared to systems with platform bus stops.
Beijing has already had China’s biggest bus fleet – over 20,000 units. To these will be added some 1,300 low-floor articulated buses to operate on a growing BRT map. Indeed, Beijing has moved quickly since making the decision to go the BRT route back in 2005. In 2006, Beijing was the first city to put a BRT bus line into service. Since then, approximately 10 more cities have joined in.
The BRT concept with low-floor buses is implemented consistently everywhere: extra bus lanes, high frequencies and short dwell times at the bus stops. Almost 90 state-of-the-art low-floor articulate buses are running on the roughly 16 km North-South line in Beijing. They transport up to 160,000 passengers to their destination everyday. The use of low-floor buses enables – as the name already suggests – level access for getting on and off the bus, also known as one-level boarding. The passengers can move through the bus quickly via the central corridor which is also free from platforms and steps. Thus, in Beijing, it is possible to achieve dwell times at bus stops of about 16 seconds. In combination with extra bus lanes on the roads, the BRT line can serve the 17 bus stops in a 3-minute cycle, during the rush hour even in a 50-second interval.
Only 25 months’ planning, involving an investment on construction of only $4.6 million per kilometre, was required for line operation in China’s capital. The time, effort and expenses made were rather low, mainly because it was not necessary to plan and build space-intensive platform bus stops.
Bus market competition hots up
The Chinese Government has decided to invest RMB100 billion for the construction of rural transportation network to help villages have access to highways in the next five years. Based on this, economy and medium-sized buses which are suitable for urban and rural transportation and buses which are 6-8 metres long and suitable for rural areas are in demand. With the rapid economic development in China and the forthcoming Beijing Olympic Games, Chinese bus manufacturers are preparing themselves for stiffer competition. Some like Higer, Yutong and King Long have upgraded their parts and accessories, as well as production lines. They are also keen on developing the bus export market. The other bus makers are busy adding to the variety of their products.
Xiamen King Long United Automotive Industry Co. Ltd. expects its exports to double to 10,000 buses this year. King Long sold nearly 30,000 in 2007 compared to 24,000 units in 2006.
Competitive pricing has helped China’s models sell well in overseas markets, especially in Russia and the Middle East countries. China’s major bus makers like the Yutong Group and Zhongtong Bus Holding Co. Ltd. enjoy growing overseas demand, with their offer of 30-50 per cent lower cost as compared to models from global rivals such as Volvo AB and DaimerChrysler AG’s Mercedes-Benz. In the process, domestic competition among almost 100 manufacturers is getting intensified. China’s bus makers sold a combined 225,000 units last year compared to 191,000 units in 2006.
With Mercedes, Volvo and MAN having set high standards in product design, technology and service, Chinese bus manufacturers have constantly raised their product quality to such an extent as to prompt companies like Scania to sign contracts with many of them.
Interestingly, India could well be the next stop for Chinese bus manufacturers. Next to China, India has the largest potential for bus market expansion, given its huge population. The only Chinese company which has an Indian connection is King Long which has a tie-up with JCBL. If media reports are any indication, more tie-ups are in the offing. For instance, Ashok Leyland is reportedly working with Foton, a major bus manufacturer in China for city buses. Truck major
Asia Motorworks (AMW) has been working with FAW of China for truck cabins and components. The company has already announced plans to enter the bus market and may join hands with a Chinese manufacturer for the bus project. A few more Chinese bus manufacturers are also aggressively scouting for partners.
Currently, Indian companies like Tata Motors and Ashok Leyland do export buses, but they are more Vanilla products for use in public transportation in the Middle East and African countries.
