ADL: Investing and growing

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Scarborough was in the spotlight last week as ADL continues its growth strategy launching new product and exploring fresh markets

Cheetah XL on a Mercedes-Benz Atego, the much anticipated small coach replacement to the Vario-based Cheetah (See pages 16 to 20) was unveiled at ADL’s (Alexander Dennis) Scarborough factory last week where the new model is now in full production. Also in build there are the first Euro 6 Enviro200 MMCs (Major Model Change) for National Express.

Overall, body production is expected to be 870 units at Scarborough this year where a further 250 Enviro200 chassis will also be assembled. General Manager of ADL Scarborough, Alan Atkinson said that Cheetah XL output will be two a week – 78 in 2015 and a figure that has already been increased to meet growing demand.

A brief tour of the ADL factory showed the diversity of current production. As well as Enviro200s and Enviro200 MMCs there were Enviro400 MMCs for Reading Buses and National Express, and a full range of coach product – Cheetah XLs and Panther Cub-bodied Volvo B8Rs to left-hand drive Elitei Volvo B11Rs for PolskiBus. After an initial 20 for the Souter Investments-owned Polish operator last year, a further 25 are currently in build, six of which will be to a higher specification.

ADL CEO Colin Robertson had high praise for staff at Scarborough. “This facility reminds me of the art of the possible,” he said. “This is a business that in its 108 years of history has started into the abyss of extinction more than once, but not in our stewardship. Eight years and £10m of investment later the facts speak for themselves. This facility is now at the heart of a company that has grown three-fold in the same time. I will be disappointed if, as a total business, our turnover does not take us towards £600m this year.

“The Plaxton brand – and the Scarborough facility – is at the heart of that success story. We have a great bunch of people here, ready to accept change, ready to lead the way, ready to acknowledge that customer focus, quality, reliability, teamwork, a passion for the job, and safety, are all at the top of our agenda.

“Some people at ADL say I have a soft spot for Scarborough. Those that know me better will verify that I don’t do ‘soft spots’, but I do recognise hard work and achievement. Achievement that has seen Plaxton increase employment by 50% to over 600 people, the vast majority of whom live within a 10-mile radius and make a significant contribution to the local economy. Achievement that has seen this factory extend its product portfolio to include midi and full-size luxury coaches, midi buses that are the best-selling in Britain, and double-deck vehicles that likewise are UK market leaders. On top of that low-emission hybrid vehicle are built here too.”

ADL spent £18m on product development in 2014, but this year it will be even more at around £20m. Around 28% of all new coaches in the UK are bodied by Plaxton and ADL has circa 45% of the total bus market where there’s still significant demand for Euro 5. “Operators know the product and we organise ourselves around what our customers want,” said Colin. “Logically by the end of this year there will be no Euro 5, but if others still offer it, we will have to compete with that.”

ADL is continuing to work with Transport for London on the introduction of four inductively-charged Enviro400Hs on route 69 before the end of the year in a project part funded by Europe-wide ZeEUS. However, there will not now be a similar number of plug-in hybrid electric Enviro350Hs for Glasgow as that demonstration is not proceeding.

ADL already has a longstanding relationship with Volvo Bus in the UK, supplier of most of its coach chassis, but it is now also bodying bus chassis for both Stagecoach and Go-Ahead. The PolskiBus orders are helping to develop the relationship with the Swedish manufacturer in Europe.

Outside the UK, ADL now has wholly owned subsidiaries in USA, Canada, Hong Kong, Malaysia, Singapore and New Zealand. Joint ventures are in place in USA (two), China, Malaysia and New Zealand while there are distributorships in Saudi Arabia (Manahil International) and UAE (Al Rostamani).

ADL announced late last year that it has a contract to supply Metrolinx in Canada with 253 low-height Enviro500s.  An option for a further 150 over the five-year period of the contract is also included. It’s expected that the Toronto transport authority will boost its double-deck fleet by a further 400 units after 2020 and ADL will be in prime position to secure this business. Almost 125 Enviro500s had already gone into service in Toronto prior to the contract being agreed and a site has now been secured near the airport where ADL will establish a chassis assembly facility.

“We pick projects where we believe that we have a higher probability of winning,” said Colin. “Double-deckers are now seen as potentially a major mainstream solution particularly in North America and that’s a good landscape for us.”

The certainty that comes from the Metrolinx order means ADL can invest more in its product support both in Canada and USA. It is 10 years since the first Envitro500s went into service in Las Vegas and nine years for those in Toronto – longer for some of the buses running in British Columbia and New York. “Repeat business is the best endorsement you can get,” said Colin.

Nowhere has that been more true than in Hong Kong where ADL has a market share of 70-80%. Buses have an 18 year life cycle in the former British colony. That means very roughly an average of 350 need to be replaced annually, but because of the large number of new vehicles that New World First Bus bought when it took over from China Motor Bus in 1998 there has been a need for significant investment recently. Around 800 new vehicles entered service in 2014. That’s expected to be 1,000 this year and 700 in 2016 before it falls back to a more average year figure in 2017.

ADL’s Chinese assembly partner is Guangtong Auto in Zhuhai and Colin expects ‘MMC’ to be rolled out in the Far East next year. “History is a great predictor of the future,” he pointed out. “We have a good supply chain in Hong Kong and we have given customers the product they’ve asked for. The backup is there.”

Hong Kong provides ADL with a firm foundation to develop other markets in the region, notably Singapore, Malaysia and New Zealand. Its order from SMRT Buses in Singapore has been well documented. The first 2.5m wide Enviro500s (apart from a Kiwi-bodied coach for an Australian operator) are 40 for Rapid KL in Malaysia which is also buying 80 Enviro200s. Apart from initial prototypes, chassis and body assembly is entirely local in conjunction with Deftech, Scomi and TMA.

A new market for 2.5m-wide Enviro500s is New Zealand where ADL hopes to secure its first breakthrough orders shortly. Chassis will be assembled in Malaysia and bodywork by Kiwi Bus Builders which continues to build 30-40 Enviro200s a year after completing several hundred primarily for NZ Bus. The first Enviro500s could be in service by the end of the year and annual production is likely to be 40-50 units over the next two to three years.