During the second half of 2005, Frances Kernodle Associates, in partnership with Hidalgo & DeVries, conducted a research study on the viability of the U.S. transit bus manufacturing market on behalf of the Federal Transit Administration (FTA) of the U.S. Department of Transportation. The report was recently released to the public via the FTA website. The following excerpt is an Executive Summary of the Non-Rail Vehicle Market Viability Study :

Currently, only four manufacturers account for most of the transit bus production in the United States. Nevertheless, buses represent the largest single mode of public transportation. In order to investigate the viability of the U.S. transit bus manufacturing market, this study examined a variety of reference sources on the topic and conducted surveys and interviews with representative transit agencies and bus manufacturers.

A general consensus emerged from the study that the viability of the U.S. bus manufacturing industry is at risk. Increasingly, the ability of bus manufacturers to meet the demands of public bus transit has diminished. Research related to the needs of transit agencies, with respect to non-rail vehicles, demonstrated that a variety of factors influence the purchasing decisions of transit agencies, including fleet size, vehicle age, service needs, and financial capacity. Vehicle types and sizes that are critical for current and future operations of transit agencies reflect each agency's operating environments, including service area climate, population size, and community needs. In addition, new technology that addresses fuel economy and environmental requirements is also considered an important factor for driving purchasing decisions, particularly decisions made by large transit agencies. The inter-related issues of maintenance, technical training, implementation of new technology/alternative fuel sources, as well as budgetary constraints, pose challenges for transit agencies. The diversified needs and challenges of the transit agencies, in turn, have gravely impacted the bus manufacturers and their ability to meet the market demands.

Needless to say, the bus manufacturers have expressed serious concerns regarding the state of the industry. The fluctuation in demand and the general lack of volume in orders and purchases of transit buses threaten the bus manufacturing business. Various issues –– such as procurement and contracting, warranties, the Buy America policy, funding, and demand for new technologies –– have compounded the difficulties faced by bus manufacturers today. In addition, costs of doing business have become increasingly high, specifically materials and fuel prices and healthcare costs. Requirements such as the Altoona Bus Test, 12-year/500,000 mile service life, and the 2007 and 2010 emissions standards also pose major challenges for the bus manufacturers.

Research results suggest that the current crisis faced by the transit bus industry must be addressed immediately. Expanded examination of specific issues relating to public transit needs and trends will enhance FTA's ability to assess policies and develop new initiatives in order to respond to the increasing demands of the transit bus industry.

The full report can be downloaded from the FTA website at: www.fta.dot.gov/16911_16914_ENG_HTML.htm

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