S'pore bus builders thrive despite China imports

S'pore bus builders thrive despite China imports

Singapore - THE local bus-building business may sound like a sunset industry amid stiff competition from cheap Chinese imports, but it is actually thriving, thanks to the government's Bus Services Enhancement Programme (BSEP) and Early Turnover Scheme (ETS).

ETS offers incentives for the replacement of older diesel vehicles with cleaner Euro V models, while the S$1.1 billion BSEP is adding about 1,000 new public buses between 2012 and 2017.

But as far as BSEP is concerned, local bus assemblers are not enjoying business from the two public-transport companies, SBS Transit and SMRT Corp, which purchase mainly European-made or -assembled buses.

Rather, the bus-building industry is tapping demand from private-transport operators, who run about 90 per cent of the new routes created under BSEP to supplement those of the two main service providers; examples of such routes include City Direct Bus Services and Peak Period Short Services.

These private-hire companies, which may ferry schoolchildren, workers and tourists, either buy completely built-up, made-in-China buses, or get them from local bus assemblers, who do not actually manufacture the vehicles, but import bus chassis - the engine, transmission and suspension - upon which they fabricate bus bodies.

Occasionally, the bus builders here enhance the suspension or modify the chassis frame to lengthen the wheelbase or add a luggage compartment.

Together, these locally assembled buses and coaches account for about 10 per cent or 80 units of the total annual new bus registrations.

There are three main local-assembly companies - SC Auto, Soon Chow Corp and Liannex; a fourth, LexBuild, hopes to join the fray as it kick-starts its operations.

Quality, customisability and after-sales service have been key to their success.

Charles Tan, managing director of LexBuild, said: "Local builders are still doing well, even with the influx of cheaper Chinese brands in the past six to seven years. This is because they have put in more effort to ride on government policies and move up the technology, skill and product design ladder."

When China-made imports first appeared here eight to nine years ago, they quickly cornered the market because they cost significantly less - up to half as much - as their locally assembled alternatives.

But the China-made buses have since been dogged by quality and reliability problems, so some operators are gravitating back to locally assembled vehicles, with their more sophisticated design and technology.

David Soh, managing director of Soon Chow Corp, Singapore's oldest bus manufacturer, said buyers here still prefer locally built buses for the convenience of readily available spare parts and ease of repair.

"We can custom-make to their requirements, whereas imported buses are all ready-made," he added. Soon Chow, started in 1926 by Mr Soh's grandfather, is focused on specialty work, such as the assembly of high-end coaches, a segment in which China-made buses are unable to compete.

The company's clients include big tour companies and those requiring specially outfitted vehicles, such as Singapore Ducktours and SATA.

Increasingly, though, the industry is becoming hamstrung by manpower cost and shortage, and may have to look to overseas manufacturing facilities.

Mr Soh's Soon Chow Corp is planning a factory in Myanmar to produce buses for the market there. "We may also import these buses for the Singapore market, as it is cheaper to manufacture there. But we will still maintain a factory here in Singapore for sales, maintenance and repairs," he said.

Mr Tan's LexBuild is already applying Singaporean know-how and leveraging on Chinese labour; the majority of its bus assembly operations are based outside Singapore, in its plant in Fujian province's free trade zone port.

There, it incorporates UK turbodiesel engines, German transmissions and steering and Chinese air suspension into a monocoque bus body.

A customised bus from LexBuild costs 15 per cent more than an average completely-built-up Chinese import here, said Mr Tan.

He added: "But it is still more than 15 per cent cheaper than the locally assembled bodies mounted on a European chassis."

What is important to him is that his company's experience and capability in end-to-end bus bodyworks engineering are able take into account private operators' feedback.

"We can better understand the needs and wants of both the operator and commuters, who have new and higher expectations."

This article was first published on January 6, 2016.
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