Revealed: SA’s future bus and coach market

Lots of people are working from home and some believe that many people will still work from home post-pandemic. How will this impact the commuter bus market?

This has been true for the past 21 months; however, the ever-increasing vaccination rates have the potential to allow people to return to the office full-time sooner rather than later. Some companies have already implemented this, such as Discovery Health who have made the move that all staff are to return to work from January 2022 on condition that they are fully vaccinated.

I think that the future will see a mix of these two worlds – a hybrid working environment and culture, blending the real necessity to have face-to-face interaction with your colleagues, as well as the flexibility to work from home a few days per week. The impact of this on the commuter market within South Africa at least shouldn’t be too bad in the long term. 

The UK government’s Bus Back Better strategy is very interesting. Should the SA government do something similar?

Most certainly. There is a definite lack of focus and drive in formalized and regulated public transport systems in South Africa from an overall strategical planning perspective. Negotiated interim and long-term contracts come to mind here. Our operators compete in the same space as taxi operators who do not have the infrastructural capability to offer the service level, safety standards, comfort levels and structured platform that many of our bus operators offer. Speaking to the end-user of bus and taxi services, the passenger, they crave peace of mind and tranquillity during their daily journey to and from work.

The fact that the multi-billion Rand taxi industry has found a way to keep the South African Revenue Services at bay really damages our ability as a country and as an industry to provide the means, infrastructure as well as the dignity of public transport pleasure that many passengers can experience elsewhere in the world. Safe, clean, comfortable, access to Wi-Fi … these features all make the journey that much more productive and efficient.

This is our biggest challenge at the moment. To get an economy growing, we need to get people moving. I truly believe that more effort and focus in this area is required.

When do you think the bus market in South Africa will recover? Will this happen slowly?

Personally, I feel that recovery, in whichever form that means to each of us, will happen at a slower pace than what we expect. The bus and coach industry in southern Africa has been put under severe pressure and ultimately our customers are paying the price.

Many of those that operated a handful of buses on a smaller ad hoc contract basis have not managed to survive due to not having a sustainable income these past few months. It’s sad to see that those familiar faces that have been around for many years are no longer in business today.

Medium-sized operators who have been fortunate to have the cash flow to survive this terrible situation have encountered damage to the balance sheet that could take months, if not years, from which to recover.

Larger-sized operators who were also fortunate enough to have a better balance sheet, stronger cash position and some freehold vehicles in their fleet have also been affected. They still have debts to service and overheads to pay. Whilst they have consolidated and procured fewer units, their fleets have still aged and still need to be maintained. If they are not careful this deficit will eventually catch up with the business.

However, looking at the glass half full… some very smart and prudent bus and coach operators have also found themselves in a better position today than a year or two ago. This is because they have managed their business interests really well in the past. These operators will continue to grow from strength to strength.

Do you have any substantial orders or success stories that you can share with us?

A customer that purchases and invests in one Scania bus or coach is a success story. A customer that purchases or replaces a large portion of their substantial fleet with new Scania buses or coaches is also a success story. Luckily for us, we have had both of these scenarios on multiple occasions this year.

Our strength is that we are able to service the small, medium and large operators respectively and repetitively.  We have a great bus and coach team at Scania South Africa, and they are fully involved in all aspects of both our brand as well as the customers’ business brand.

We roll up our sleeves and get stuck in so to speak. Understanding every cog that turns in the operators’ business is what has allowed us to break into new fleets with conquests of new customers. At the same time, we have been servicing our loyal customer base and we have also been tailoring unique financial solutions for the discerning business owner. We’ve been doing this while achieving an 80% market penetration in our repair and maintenance contracts business.

When will we see widespread adoption of electric buses in South Africa?

I think sooner than what we all believe. Some operators have already been testing battery-electric vehicles (BEVs) for some time with very good feedback and results.

As soon as we start to get the early adopters of BEV product, the exponential uptake will surprise us all.

Thinking from an operator’s perspective; when planning the replacement of a percentage of a fleet to adopt BEVs, one would need to sell or trade the older ICE product. If only a handful of operators start adopting the BEV business model, the economics of supply and demand forecast means that very soon there will be an excess of used ICE products in the market. This would drive down the ability to demand the previously required price of the said used vehicle. This has the potential to put other operators that haven’t reacted quickly enough in a poorer position over time.

When will autonomous buses come to South Africa?

There’s a fair amount of testing going on in different parts of the world at the moment, and one always needs to keep an eye on the global trends. But I think we’re still fairly far off from this point.