GREENSBORO, N.C. A few years back, Daimler Buses North America made a strategic decision not to make major changes to its top-of-the-line motorcoach, the Setra S 417, or its product line.

The reason, according to company executives, was because the federal government was finalizing new emission standards that bus manufacturers would have to meet, first, in 2007 and then again in 2010.

The Setra S 417, which was introduced seven years ago, would get regular upgrades, they agreed, while the final emission standards were being rolled into place and the new engines that were built to meet them were rolling off production lines.

"Were the small guy looking up in North America," says Tom Chezem, Daimler Buses vice president of sales. "So, for us, the question became do you roll out new products when you have to come up with a whole new engine, anyway, in a few years. There really wasnt a good economic reason for us to bring out a bunch of new product that we then would have to change engines on in 2007 and in 2010."

With the 2010 emission standards now set, and the last of the required new engines ready to hit the market place, things are about to change.

"Now that weve got the new engines, I think that has stabilized, so you should be watching for what we are going to bring in the future," says Chezem. "There are definite plans but I would like to leave it like that for a while so I dont steal all of my thunder."

He said Daimler sees the motorcoach industry in North America as a growth market and it is looking forward to being part of that growth. "Our objective is not to be No.4 in the market and the only way we can do that is with additional products," he notes.

Although Daimler opted not to bring out a new motorcoach for 2010, it is introducing a significantly upgraded and improved S 417 at the 2010 United Motorcoach Association Expo in Las Vegas next month.

"This is our first major face-lift and while it probably wont look much different from the outside, once you get into the details there are a lot of things that it is made up of," said Chezem.

A focus on safety

Safety measures are among the top improvements made to the newest S 417.

The coach has a front collision bar or guard that will prevent a car from sliding underneath the coach in a head-on collision, and passenger and driver crumble zones that will protect people inside the bus during a frontal crash.

The design focuses the energy in a front-end collision to areas within the structural frame that will collapse and absorb the energy, basically protecting passengers. In addition, the driver compartment will shift backwards, absorbing the energy and moving the driver away from danger.

"It is unique to us and there is no other manufacture in the world that has anything of this nature focused on driver safety and preventing fatalities," said Chezem.

The S 417 also is equipped with automatic lights that go on as it grows dark, automatic wipers that start when the windshield gets wet, and fog beams that light up the sides whenever the bus is turned.

Setra had to make an engine switch for the coach, too, because of Detroit Diesels surprise decision a year ago to stop supplying the general motorcoach industry with engines beginning with the 2010 models. Although Detroit Diesel has since reversed that decision, Diamler had already chosen a Mercedes-Benz engine for the S 417, making it the only major bus that will use the M-B OM 471 engine.

The engine features Daimlers Blue Tech SCR, or selective catalytic reduction exhaust emissions system that meets the governments latest requirements. The German-built system, which has been tested in Europe for the past two years, uses a single canister that handles both the particulates and nitrous oxide to reduce pollutants.

Daimler for Daimler

"We elected to differentiate ourselves and demonstrate that difference through branding by highlighting the fact that our system is not the same as other systems because it is designed by Diamler for Diamler," said Chezem.

"Because of that, we believe we will have a little more efficiency in the operation of our vehicle."

Daimlers showcase at UMA Motorcoach Expo also will feature the companys customer support network, which includes four service centers and a new partnership with Detroit Diesel that will expand service stops to much of the Midwest.

But what about those new products that are coming? Some in the industry are betting a smaller, less expensive model than the S 417 is sure to be among them.

"I dont want to give away too much, but it definitely is a segment we are looking at and we are seeing how we can play in it and provide value" said Chezem. "It is not just, let me give you a cheap coach, but let me give you a coach with value."

Meantime, Daimler is facing the same economy-stunted sales market as other coach manufactures and is trying to work through it by setting goals and targets for all of the companys groups and functions and then zeroing in on areas that need special attention.

"Its all about focus on the customer, focus on people, focus on processes and provide good quality products and services," Chezem stressed.

Luxury market shrinks

He expressed concern, though, about new coach sales, especially the luxury market, which he estimates was down about 50 percent during the first three quarters of 2009. All segments of new coach sales were off 15 percent in the third quarter, according to National Bus Trader, but up a bit from the second quarter.

"The reason you buy a new bus is because your business is growing," he said, noting that only the most diversified motorcoach companies appear to be doing much of that.

He cautioned, too, that the glut of pre-owned buses available for sale probably will continue to hamper new bus sales and may be the biggest challenge faced by manufacturers in the current market.

"You get pretty good numbers on the new coach side, you know what is happening and where it is going and you can use that to help you understand what you should be doing to differentiate your target and make changes based on your product line," he said. "But the thing that comes up and bites you is the pre-owned market."

Chezem noted there is little demand right now for the high number of used coaches on the market and that could lead to dealers reducing prices to settle cash-flow issues, which, in turn, would interfere with the price and sale of new coaches.

"Those low prices come back and impact your new-coach price because somebody is going to say I am not going to pay $400,000 or so for a new coach if I can buy a two-year-old coach for $200,000 or something like that. That is really the challenge," he emphasizes.

Long term, though, things look great, according to Chezem, mainly because he believes the demand for green, environmental friendly, low-cost transportation, coupled with higher air fares, will benefit the coach market.

"But I think it is a longer-term perspective, a five- to 10-year window, maybe," he adds.

However, Chezem notes he is hearing now from operators who say organizations and individuals are already inquiring about "green" buses when they book trips.