Alexander Dennis Limited chief executive tells ALBUM Conference that internationalisation has kept up revenues during uncertain times at home

 

Alexander Dennis has exported double deckers to Mexico City

 

The future of UK bus manufacturing cannot be taken for granted, Colin Robertson warned a gathering of bus operators in Glasgow last week.

Addressing the ALBUM Conference, the annual meeting of Britain’s independent and municipal bus operators, the chief executive of Alexander Dennis Limited, the UK’s largest bus builder, pointed out that the UK no longer builds ambulances and fire engines – and buses could go the same way.

Robertson recalled that when ADL was formed in 2004 it was primarily a UK business, and it was very dependent on the London market and the large bus groups. Since he took charge of the business in 2007, annual revenues have more than trebled, from £180m to £600m-plus, due to growth both at home and abroad.

Roughly half of the company’s income is now generated overseas, with recent high profile orders in Mexico and Switzerland. Robertson argued that this internationalisation is vital to
the survival of the business. It helps to insulate ADL against fluctuations in its domestic market, which is currently down 25% year-on-year. And it helps to dilute the cost of new product development, in which ADL has invested over £100m over the past five or six years.

Had we not started to look at how to internationalise, I don’t know where we would be – certainly in terms of keeping 2,500 people on our team

“A new London mayor can turn the world upside down. Political uncertainty can turn the world upside down…” said Robertson. “Had we not started to look at how to internationalise, I don’t know where we would be – certainly in terms of keeping 2,500 people on our team.”

The UK market orders products uncommon elsewhere in Europe, such as double deckers and midibuses, and in right hand drive.

“It is a relatively low volume market. It is a relatively complex market,” said Robertson. “I would put it to everybody here that if some of us UK manufacturers didn’t exist, how excited would some of the big German or Scandinavian or other powerhouses… get at five or six hundred motors a year, with different lengths, different heights, different configurations…

“So it’s up to us to basically internationalise the UK market and it’s up to us to sell you a product that you want to buy.”

However, Robertson is confident that UK bus builders can defend their domestic positions against Chinese competitors – despite their much lower cost base. He pointed out that the Chinese model has historically been based on repetitive, high volume orders for thousands of identical buses at a time

 

SOUNDBITES: What ADL chief executive Colin Robertson had to say about…

Brexit

“Where’s Brexit going to go? Two and a half years ago it was 1.45 euros to the pound, today it’s 1.13. We buy engines, axles, transmissions, gearboxes, steering systems and so on. Suddenly, our cost base goes up 10 grand a bus and you tell us where to stick that.”

A bus scrappage scheme

“Should there be a scrappage scheme? We think yes. Why, in a common sense world, would you put 10 or 20 grand into something [for an exhaust after-treatment retrofit] that’s 12-13-14 years of age, at the end of its life?”

Standardisation

“We need to try and convince you to buy a more standard product if we can… Every time we faff about with stuff we create an opportunity to screw up your experience in terms of on time delivery and quality. So I am a zealot internally, trying to look at how we narrow that funnel, while recognising that you need to buy a product that gets the job done for you.”

Fuel technologies

“We as a country are brilliant at trying lots of different things… The UK never ceases to amaze me, the number of different solutions that are out there. They all tend to be workable… I daren’t not have a chip on plenty of numbers on that roulette wheel, because I really, genuinely don’t know what the legislators will do next… I think there are so many agendas out there in the UK… I don’t see any of them vaporising.”

 

This article appears in the latest issue of Passenger Transport.

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