National Express Group (NEG) has signed an 100m deal with Alexander Dennis Limited (ADL) for 600 new buses for its West Midlands and Dundee fleets. It represents replacement of more than a third of NEG’s current 1,600 strong fleet, with an average age of 8.5 years..
The exclusive arrangement, which locks ADL and National Express together for the next five years, is the biggest one-off, multi-year deal to be signed in the UK bus sector in modern history. It underpins production programmes across ADL’s manufacturing sites, particularly in Falkirk and Scarborough.
A mix of double-deck and midi buses, the deal also involves the supply of parts. The order follows delivery of 60 ADL double-deckers last year.
National Express UK Bus MD Peter Coates says: â€œThis multi-year contract represents a major step forward in terms of revitalising our bus fleets â€“ and in the way we do business.
â€œBy working exclusively with ADL we can harness the vast wealth of knowledge within our various engineering teams, improve vehicle reliability and performance, and give customers better service.
â€œIn parallel with this, we have clear visibility in terms of costs, planning and vehicle replacement programmes, as well as the opportunity to work with and to influence ADL in the way they design and engineer the vehicles of the future.â€
Adds NEG Group Purchasing Director Eddie Kerr: â€œThis new, exclusive contract is an extension of a business relationship that has been nurtured successfully in recent years.
â€œA by-product of this multi-year deal is the opportunity to create a nucleus of engineering skills â€“ and talent â€“ between two compatible companies focused on customer satisfaction and technology leadership. It is also particularly pleasing that all of these buses will be built at ADL factories in Scotland and England, helping us to underpin jobs in the UK.â€
All will be Euro 6 and the first 100-plus vehicles (a mix of double-decks and midibuses) will be delivered in the second half of 2014. Then a further 125 buses per year will be delivered during 2015-2018.
The deal follows big recent successes for ADL with First and Stagecoach. ADL has tripled the size of its business in the past six years, from 170m to 530m in 2013.
ADL CEO Colin Robertson says: â€œMulti-year contracts make so much sense for everyone involved. They give both parties a clear profile of expectations, forward-build programmes and financials.
â€œAn added bonus is that they release our best and brightest people, on both sides, to pursue new business growth opportunities, rather than being locked into months of repetitive tender negotiations annually.
â€œMy instinct is that in the years ahead we will see changes in the way we do business and more ‘partnerships’ of this nature developing in the bus industry.â€
Pictured at the Scarborough signing ceremony: Colin Robertson, Peter Coates and Eddie Kerr.