Blue Bird looks to fly into China

BEIJING - Blue Bird Corp, a leading manufacturer of school buses in the United States, is looking for potential partners in a bid to enter the huge Chinese school bus market, according to its CEO.

"We've met several potential partners (bus makers in China) in the last few days and we've got more ahead of us," said Philip Horlock at a school bus fair in Beijing on Thursday.

Horlock said the company recently rated China as a priority market and the feedback it received at the fair has been overwhelmingly positive.

"I am more than positive (about the prospects for school buses). I see the government is behind it, the people want school buses, they want the business," he said.

The international fair, the first of its kind in China, was organized after the safety of school buses became a national priority in the wake of a string of road accidents involving school pupils and preschoolers in the last two months of 2011.

Horlock said he found the enthusiasm for school buses in China is "incredible" and the market prospects are "going to be huge".

Blue Bird held talks with the Ministry of Education in July and the ministry has shown interest in introducing the company's technology to China, according to Horlock.

Despite the bright market prospects, the company is aware that it will need to partner with local companies to expand its business. "We cannot ship everything from the US, as the shipping would account for 50 percent of the cost," said Russell Mitchell, the company's sales and marketing director.

Despite the already escalating competition in the Chinese market, Mitchell is confident that the company has a cutting-edge advantage and will employ the strategies necessary to lower the price of its buses.

"It's all steel and the safety index is beyond comparison," Mitchell said, adding that the bus maker will bring the exact safety standard of school buses to China when there is opportunity.

According to the organizer of the fair, the city government of Huanghuagang in Hebei province has already offered Blue Bird free land and factories if the company decides to invest in the city.

Blue Bird, based in Fort Valley, Georgia, has an annual production volume of 30,000 to 40,000 school and activity buses.

Some other manufacturers, such as Baoding Chang'an Bus Manufacturing Co and Zhengzhou Yutong Bus Co, have welcomed the potential competitor from the US.

"It is a good opportunity for bus makers to learn from their ideas and technology," said Tian Xiaoguang, director of the marketing research department of Baoding Chang'an.

Tian added that the types of school buses that Blue Bird is trying to promote "may not satisfy the Chinese market entirely in terms of maintenance costs and practicality".

A manager at Zhengzhou Yutong warned about the already slim profit margins in the school bus industry.

"Currently homemade buses already take 95 percent of the market in China. The profit margin is already as low as 3 to 5 percent," Wang Wenbing, deputy general manager of Zhengzhou Yutong, was quoted as saying by National Business Daily.

Sales of school buses have risen since the end of 2011 in the wake of the road tragedies.

Statistics from the China Highway and Transportation Society shows that bus makers nationwide sold 1,652 vehicles in January, almost one-fourth of the total sales volume in 2011.

China currently has a total of 285,000 school buses, fewer than 10 percent of which are specifically designed for that purpose, according to She Zhenqing, deputy secretary-general of the bus branch of the society, at a seminar on Wednesday. She estimated that the total volume of the school bus market in China could reach 1.06 million buses.

China Daily

(China Daily 02/18/2012 page9)