WINTER GARDEN, Fla. — An unexpected slump in the first quarter left ABC Companies with “a good year but not a great year” in 2017, but optimism nonetheless flourishes at ABC facilities across the country.
ABC President and CEO Dane Cornell said the company has its biggest-ever backlog of Van Hool motorcoach deliveries for the first half of 2018, expects to start electric motorcoach deliveries in 2019 and anticipates the opening of a Van Hool assembly plant in the U.S. within 24 months.
ABC will sell about 1,000 new and used motorcoaches in 2017, down from 1,150 last year, Cornell said. It has sold motorcoaches from Belgian-based Van Hool for 30 years.
“There was a very slow start to the year. It was hard to pinpoint,” he said. “I believe operators were refreshing their fleets at a good pace over the last three to four years and there was just a bit of a pause in the first quarter. Carrier consolidations led to excess vehicles on the used market and there wasn’t the demand that there had been in the past.”
Cornell said ABC hit its second-quarter projections, had a decent third quarter, “and we are looking to finish the fourth quarter strong, but I don’t think our total-year projection will catch up on the first-quarter’s slowness. We are not going to be too far off. I would summarize this as a good year but not a great year.”
The diversity of Van Hool offerings expanded with the introduction of the 35-foot CX35 a year ago.
“We have a broad range in our product line — we have a good mix of double-decks, CX35s and the two 45-foot single-deck products,” Cornell said. “We have a pretty diverse customer base. We’ve been able to get a few operators over the last few years to give us a try. Now they are buying from us, so we’ve added to our customer base.”
In addition to the CX models, ABC also sells 40- and 45-foot versions of the Van Hool TX luxury touring coaches and the 45-foot, double-deck TDX motorcoaches that seat 81 passengers.
As for the orders booked for delivery in 2018, “about 65 percent are the 45-foot single decks,” Cornell said. “The CX35 and the double-decks make up the rest.”
ABC and Van Hool have tapped into the market for employee shuttle buses operated by tech companies in northern California, Washington, Oregon and some other areas.
“Our Silicon Valley customers are growing their employee bases and a percentage of them are riding the shuttle buses,” he said. “That portion of the business is growing.”
As for the traditional charter and tour business, he said, “That market is still there, but I think there are more opportunities, and I think operators are looking for contract service work. I think that will be a growth area. I don’t know if the new coach market will grow that much, but I think it is stable. We might see 2- to 3-percent growth next year over this year.”
Values of pre-owned motorcoaches are victims of operator consolidation and the lack of new entrants, Cornell said.
“Our industry is going through a little bit of transformation on the pre-owned market due to the fact that the industry, from a business standpoint, is not growing. There are not a lot of places to go with used vehicles that operators are trading in,” Cornell said.
“I think we are going to go through somewhat of an adjustment on pre-owned valuations and how pre-owned vehicles are viewed over the next year or two.”
Van Hool and ABC are excited about the prospects for electric shuttle and commuter coaches, he said.
The companies made a formal announcement during the APTA Expo in Atlanta last month of plans to equip the CX45 coach with an electric drive system manufactured by Proterra of Burlingame, Calif.
“We are going to start with the 45-foot coach, which will be called the CX45E. That vehicle will be introduced at the end of 2018 with deliveries beginning in 2019,” Cornell said. “We will develop alongside that the CX35E.”
Electric vehicles could account for “a double-digit percentage of what we sell in the shuttle applications. On the shuttle services you have designated routes, you know the distances and terrain, the load capacities and all the things that factor into how long a vehicle can run on a charge,” he said. “We are hoping to have them meet the ‘Buy America’ guidelines in the near future so we can get into the public-transit market with them.”
That would be made possible by the next optimistic road sign facing ABC Companies.
“Our partner Van Hool is in the final phase of selecting a city to build a ‘Buy America’ plant in the U.S.,” Cornell said. “We expect that plant to be up and running within the next 24 months or less.”
Vehicles produced in that plant would qualify for purchase by public-transit systems and other government agencies that receive federal transit funding. The electric coaches also are attractive to many companies that operate employee shuttles.
“The tech companies are looking for technology that is cleaner, quieter and more efficient. They’re always looking for the next best thing,” Cornell said. “There also are public-transit agencies that have similar desires.”
Other technological advances waiting over the next hill will improve electronic monitoring and servicing of motorcoach systems, he predicted.
“I think we are going to see more real-time diagnostic monitoring from the home base or satellite bases where the operator can see how the vehicle is performing and what it is costing to operate and can monitor malfunctions,” he said. “The base will be able to communicate with the drivers to let them know what the issue is and what to do. If it is a software issue, it might be possible to fix it remotely.”
A cross-country network of parts and service facilities allows ABC to promise parts deliveries anywhere in the continental U.S. within 24 hours. The company operates shops in Jersey City and Camden, N.J.; Winter Garden, Fla.; Costa Mesa, Calif.; Grand Prairie, Texas; Faribault, Minn.; and Sombra, Ontario.
A Muncie-Baker replacement parts subsidiary is based in Muncie, Ind.
A Redwood City, Calif., center supports employee shuttle transportation in the Bay Area.
ABC is preparing another service shop in Newark, Calif., on the east side of San Francisco Bay between Oakland and San Jose. That garage will service motorcoaches operated as employee shuttles by private businesses.
“We have about 450 coaches that are under contract maintenance service for a variety of tech-based companies,” Cornell said. “That is why we are adding the Newark location. It is going through a remodel phase right now and will open in the first quarter of 2018.”
ABC is continuing work at its Florida facility on a five-year contract to refurbish up to 120 MCI D4500 motorcoaches for the Georgia Regional Transportation Authority, which operates commuter services for 13 counties in metropolitan Atlanta.
That shop also is refurbishing 23 MCI D4500 motorcoaches for the Potomac and Rappahannock Transportation Commission that serves communities about 25 miles southwest of Washington, D.C.
“We have cautious but optimistic views of next year as far as new coach sales go,” Cornell said. “We are optimistic about the next five years as far as we are headed with our technology, our products and bringing online a plant that will allow us to compete in the market for public-transit agencies and private customers.”
