Mid-size buses: Backbones of many fleets

by Jessica Rohloff and Rick Stoff

“Sixty-eight percent of UMA members who share their fleet information have mini coaches and/or executive vans in their fleet,” according to Maggie Vander Eems, UMA’s Vice President of Member Services and Meetings. “I think operators will appreciate the addition of our Executive Mini Coach Pavilion at Motorcoach EXPO in Nashville, January 19-23, 2020.”

Mid-size size buses outsell motorcoaches by an eight-to-one margin. They are less expensive, of course, meet many needs for regional travel and shuttle service and have become a staple of the wedding business, said Thomas Holden, a consultant from Charlotte, North Carolina.

The traditional automobile limousine has fallen somewhat out of favor, he said, while mid-size vehicles accommodate more passengers and offer attractive price points for acquisition and maintenance. Many are outfitted to the same level of luxury as high-end motorcoaches.

Sales of medium-size buses, often referred to as “cutaways,” approach 16,000 annually, according to a report prepared by the National Transportation Safety Board in association with a mid-size bus accident.

“According to the Federal Transit Administration study on the market for small- to medium-size buses, the industry does about $600 million dollars in sales each year. According to NTEA (National Truck Equipment Association), the costs for a new medium-size bus ranged from $50,000 to $225,000 in 2017. In comparison, the cost for a new motorcoach is typically about $500,000,” stated the NTSB report.

“The production volume of mid-size buses reported by MSBMA (Mid-Sized Bus Manufacturers Association) members grew from about 10,000 (in 2002-2003) to nearly 16,000 units per year in 2015. In comparison, there were about 2,141 motorcoaches produced for the North American market in 2015.”

The MSBMA reported that 8,999 mid-size buses were sold to public agencies in 2016 while 5,615 were delivered to private operators. The association estimates that 20percent of the privately sold buses go to churches, schools and communities for use as activity buses, 10 percent are used as hotel and rental-car shuttles and 10 percent are used as tour and charter buses.

Holden spent 16 years as director of operations and general manager of UMA member Rose Chauffeured Transportation before going into consulting.

“I started in the limo industry. Limos were used mostly on weekends for weddings and proms. The limousine became a dinosaur almost immediately. We saw it coming,” he said. “Markets changed as the ridership changed. Also budgets have changed.”

Operators received more requests for vehicles holding more seats.

“We bought minibuses, which some people refer to as cutaways, which technically they are,” Holden said. “We moved a lot of people to weddings in minibuses. Obviously the bride and groom jumped into the back of a Cadillac. Not everybody gets to ride in the fancy car.”

The NTSB study defined the cutaway concept:

“This type of vehicle is manufactured in two stages. The first stage is to build a truck or van cab and chassis, known in the industry as a commercial cutaway. The second stage is the installation of the bus body and passenger seating compartment onto the cutaway.”

There is no regulatory definition for a mid-size bus, NTSB found, but the report classified them as passenger vehicles ranging from 6,001 to 26,000 pounds in gross vehicle weight.

 “If you’re not growing and changing, you die.”

“Markets across America vary. Some are heavy corporate markets, others are heavy party markets,” Holden said. “Traditional chauffeur-driven companies—I call them that instead of limo companies—expanded into the minibuses many years ago, and expanded the size of the minibus over the last 10 years. And then obviously some have expanded into motor coaches. ”

“The traditional minibuses created were 24- or 28-passenger cutaways on a Ford or a Freightliner chassis. They had a cloth interior, they were very generic, very basic people-movers,” he said. “As the minibus industry kept evolving and the quality of the ride became more important, then the buses started evolving. In many cases they started evolving into more of a luxury type of transporter.

“If you’re not growing and changing your style, you eventually die,” Holden continued. “What they’ve done with these minibuses is put in interiors that are the same as the limo interior. Black leather seating, wider seats that recline. Elegant lighting throughout. Up to date with LED lighting so it changes colors to change atmosphere, depending on your client base. Also an entertainment system—whether you’re watching video movie or sound, it makes for a nice ride.”

The premium cutaway manufacturers now build vehicles holding 23 to 56 passengers, Holden said.

Filling niches

“A business I know in the Chicago market had 10 motorcoaches and found they were not cost effective. Expensive to maintain and a very expensive cost per mile. So when Executive Coach Builders made a 57-passenger bus on a Freightliner chassis, they immediately made a very large order and got rid of the motorcoaches. It was more economical to run that type of vehicle,” Holden said.

A typical cutaway bus costs $225,000 compared to $600,000 for a motorcoach, he said.

“They’re job-specific. Someone doing simply shuttle work can have the traditional fabric interior, without all the bells and whistles and still perform a fantastic job. The high-end quality is not necessarily needed for that transportation.”

Holden sees no benefits in the fuel mileage delivered by cutaways. “They go through a lot of fuel just like a motorcoach, but they are cheaper to maintain in daily use. The cost of insurance is less because the value of the vehicle is less, and your overall cost of operation is reduced.”

On the other hand, he said, “A motorcoach can last 20 years, but a cutaway will never last 20 years. The average lifecycle in an average company is seven years. Some people will blow them out in three to four years, depending on the usage.”

On yet another hand, he said, the cutaway operator will always have a relatively new fleet. “In seven years you could have a brand new minibus or a seven-year-old motorcoach. Many motorcoach companies keep buses 20 years. They redo the fabric and paint and give it a whole new look, but it’s still a 10- or 15-, 20-year-old motorcoach.”

The cutaway is likely to serve local and regional needs rather than cross-country trips, Holden added. “As it gets older, you’re pretty much going to keep it as a regional bus versus a cross- country bus. Yes, you can drive a cutaway up and down the east coast, but it’s not recommended because you’re never going to have the ride a motorcoach does.”

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