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June 01, 2007  |   Comments (0)   |   Post a comment

Q&A: Large Bus Manufacturers

Key executives at the three large bus OEMs weigh in on industry developments and challenges.

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IC Corporation

Michael Cancelliere
Vice president and general manager of Bus Vehicle Center

How are the Type C and Type D markets looking for the 2007-08 school year?
The markets are shaping up as we had expected. Due to increased activity that we saw in 2006 driven by the emissions changes, industry volumes are down slightly for conventional and transit products in 2007.

Has there been any market shift in favor of the Type C over the Type D school bus, or vice-versa?
Currently, we do not see any significant marketplace shifts. The balance between Type C and Type D school buses has remained constant over the past few years. For the most part, customers who have typically been conventional customers have remained, and likewise for transit products. There are some factors on the horizon that could affect this trend, so we continually listen to customer needs and stay attuned to the market.

Do you expect the prices of the raw materials (steel, rubber, copper, etc.) to continue to climb? If so, will school bus prices need to be adjusted upward?
We continue to see signs that raw material prices will maintain an upward trend. As a corporation, we relentlessly pursue ways to control costs. For example, we’re bringing on new tire suppliers and sourcing more components overseas. Since 75 to 80 percent of our total costs are related to the cost of materials, this will continue to impact our marketplace pricing.

In a recent SCHOOL BUS FLEET survey, 52% of respondents described the quality of new school buses as “good”; 17.9% as “excellent”; 18.5% as “fair”; and 3.5% as “poor” (8.1% had no opinion). How does that fit with your assessment of customer satisfaction in general?
I think the results are representative of what we hear from our customers. This represents an opportunity for us and other OEMs to continuously improve our quality. There is no reason why more customers should not rate our products as excellent. Consequently, we continue to invest in the quality of our products at both the design and manufacturing level.

What are the key concerns of your customers these days in regard to your Type C and Type D products?
We have been hearing from our customers that they are looking for overall product enhancements in our type D products. It has been several years since we have refreshed these products, and we are excited for the new products we will be releasing in the next six months.

Are you getting more inquiries about placement of three-point belt systems on your large buses (as well as your Type A vehicles)?
Yes, we have seen inquiries on the rise regarding seat belt systems in general for our products. At the recent NSBA show in San Francisco, seat belts were on the minds of many of the school board members in attendance. We are closely monitoring state legislation, and working to provide education to the industry on seat belts through the American School Bus Council.

Looking 10 years into the future, can you predict how school bus design and engineering might change to adapt to customer needs?
I believe that the underlying need from our customers will not change over the next 10 years: providing the safest form of transportation to and from school for our children. How we go about this has changed, and will continue to evolve in the future. Emissions regulations, GPS technology, RFID tracking, seat belts, structural safety, vehicle quality and cost structure are just some of the continuing enhancements we are seeing. As another example, IC Corporation showcased a concept low-floor school bus last year at the NAPT conference that provided an improved method of loading and unloading both special-needs and non-special-needs passengers. This type of creative thinking will continue to be needed to respond to customer needs in the future.

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