Celebrating its 10th year in ADL ownership, Plaxton remains a force to be reckoned with
Serving the fickle new coach market has always been a challenge, especially given its long-term cyclical nature.
Against the backdrop of the ups and downs in industry ordering patterns, often shaped by economic or legislative events, it’s not suprising that Plaxton stands alone as the UK’s sole-remaining full-size coach builder.
But, far from being a struggling hanger-on, significant investment by parent Alexander Dennis Limited (ADL) since its 2007 purchase from the management buy-out team, has seen it thrive.
Indeed, 2017 will see Plaxton’s Scarborough plant build 950 vehicles, the same as ADL’s Falkirk site, an increase from the 830 in 2016.
ADL’s total production – including its USA and Asia-Pacific factories – for 2017 is expected to be 2,244 vehicles, slightly lower than 2016’s 2,465 total.
Marking the 10th anniversary of Plaxton becoming part of the ADL ‘family’, CEO Colin Robertson said that the doubters who thought ADL would close the site have been proved wrong.
Indeed, the site now employs 660 people – double that of a decade ago – compared with Falkirk’s 780. Despite it now building large quantities of buses, Plaxton’s coach business is thriving. And, in the production hall a picture of founder FW Plaxton still surveys the scene.
Range expanded
Continuous improvement, along with a range of new models, whose variations in length and interior give Plaxton a comprehensive range, will be added to with a new inter-urban model in 2018, based on the Leopard (see news p11).
Other recent additions to the range include a 12.2m Panther, a 14m Panther Exec and a 61-seat Panther on two-axles. All, says Coach Sales GM Mick McElhone, introduced as a response to specific customer requests.
However, the domestic market is of insufficient size to sustain a coach-only business and bus building has long been part of Plaxton’s repertoire. These days it’s ADL Enviro200 and Enviro400 single- and double-deckers for the UK market that make up the bulk of production.
More exotic is the first of a batch of 90 tri-axle two-door Enviro500 ‘deckers being built in Scarborough and bound for Mexico; the rest of the order will be completed locally in a new ADL plant.
An indication of ADL’s continuous international sales conquests, was represented during our visit by the demonstration of an Enviro 500 SuperLo. The reduced height ‘decker, is bound for the USA for display at the country’s major exhibition this summer.
The long-standing international business not only delivers the volume to ensure that ADL remains profitable, but also helps smooth out the peaks and troughs of a fluctuating domestic market. Comments Colin Robertson: “We’re a UK business with international tendencies.”
Tougher times
While the Plaxton arm of the business, its Scarborough plant, and the wider ADL business is in rude health, with a 4% margin and turnover maintained at £600m, Mr Robertson is realistic about the future.
A surge in orders, generated by the UK’s PSVAR regulations deadline for double-deckers coming into force on 1 January, has abated.
ADL has done well in winning new business, and now supplies all major groups, alongside new ‘conquest’ customers, including Blackpool Transport, Reading Buses and Trent Barton, it recognises the wider economic backdrop.
The result is that 2017/18 is tough for all manufacturers. On the one hand the larger groups are not ordering as many new vehicles, as they try to determine what technology to use in the metropolitan cities for clean air initiatives.
The currency slump caused by the Brexit vote has not been restored, and price increases are now feeding through due to many major components being priced in Euro, rather than Sterling. Brexit uncertainty has also accelerated inflation.
A third factor is that commodity prices, such as glass, tyres and aluminium, which make up a larger proportion of material costs have risen, hitting a three-year price high.
Overall, from Brexit to today, the €0.21 movement in the value of the Pound means that the cost of a €50,000 basket of parts for a typical vehicle has gone up by 19%.
Set against this are factory efficiencies; new working practices, such as laying the vinyl floor in a new bus before the sides are fitted, or buying a complete pre-plumbed toilet module-cum-staircase for coaches, has reduced the number of build hours.
Using suppliers based on the same site in Scarborough for metal fabrication reduces transport costs, while a £2m investment in an automated CNC machine working 24/7 to produce parts has brought increased efficiency.
“The competitive landscape is tough for all players, both domestic and international,” says Mr Robertson. “We are exploring further efficiencies in our supply chain and in the year to date have already made a £3m payroll and overhead reduction.
“But the foreign exchange rate impact means that we foresee the market will drive a price increase of up to 4%. And this assumes there is no further currency deterioration.”
Efficiencies
To reduce the total cost of ownership (TCO) ADL has looked in detail at the fuel consumption of its buses to understand where every drop goes, and where the losses are. Major areas of energy losses are rolling resistance, torque converter and brakes (due to air usage) and ADL is working with its suppliers to optimise performance.
Rolling resistance will be tackled with super-single tyres on drive axles.
This follows work over the last few years that has included optimised gear shift, electric fans, LED headlights, stop-start and weight reduction, among others. Together, they offer a 17% fuel saving over a conventional Euro 6 diesel.
To come will be a 48v mild hybrid, taking car industry hybrids as its cue. To be launched in 2018, it is less complex than full hybrid and doesn’t use high voltage. Super-capacitors are fitted, rather than batteries, avoiding issues of the larger up-front cost, and mid-life replacement.
A motor generator unit connected to the propshaft recuperate 12kW during braking, delivers up to 180Nm of torque during acceleration. Fuel consumption in an Enviro400 is expected to be reduced by 4-8% depending on duty cycles.
Options
While the coach products have an established list of options, rapid developments of innovations in ADL’s bus market – such as USB chargers – has led to a host of individual specifications.
Now, taking a lead from the car market, four ‘bundled’ packages are offered, which can be taken individually, or together. Overall the bundle price is cheaper than separate items, thanks to production consistency.
The City Package (Enviro 400 only) adds City body styling, glazed staircase, skyview rear upper deck window and three skyview roof windows with solar film.
The other packages are available on the Enviro200 and 400 ranges. The Convenience and Safety Package has wireless bell pushes, USB sockets in seat backs and under-seat lights, illuminated staircase glass and LED lights on the steps (on E400).
The Ambience Package adds ambient-sensed dipped beam and saloon lighting, plus speed-sensing dimmable saloon lighting. The Smart Package delivers Low Emissions Bus certification that qualifies for higher BSOG, thanks to e-cooling, smart accessories, stop-start and Voith DIWA transmission.
Says Customer Development Director Keith Watson: “Creating the desire for ownership is extremely important to us, but creating the desire for ridership is the industry’s challenge.
“We need to be at the forefront of developing features and benefits to help our customers grow their patronage and revenues.”
Next steps
AD Connected is the next step, bringing together everything from remote diagnostics to automated parts ordering.
A fleet management system, it costs around £200 (including a ruggedised tablet), and is cloud-based meaning it can be used on desktop/laptops and Android devices. There are no ongoing charges or other costs.
ADL is using it for its Mexico contract, while in the UK Blackpool Transport, Trent Barton and National Express are early adopters.
All vehicle makes and ages can be used, and when the system debuts in January 2018, it will coincide with an upgraded parts website whose user-friendly functionality matches that of Screwfix and John Lewis.
AD Connected also complies with DVSA’s requirements meaning it can be used for maintenance planning, walk-round checks and remote enforcement.
It’s just one of a number of innovations that ADL is working on.
On the vehicle front two all-new projects, currently embargoed but pretty much open secrets in the industry, are hinted at for 2018, but they will be another story.
