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China’s school bus demand still limited

The 2012 China Beijing International Exhibition on Buses, Trucks & Components held in Beijing on May 16-18 was largely a school bus show thanks to the country’s attention on school bus safety and regulations.

Organized by the Ministry of Transport, which supervises the country’s highway bus transportation, the show featured dozens of domestic bus makers showcasing their school buses. U.S. bus makers Navistar and Bluebird also participated.

Different from the passenger car market, China’s commercial vehicle market has long been an arena of domestic brands. Although Chinese bus makers have been trying to develop higher-end and luxury buses for both domestic and overseas markets, most of them are making affordable buses that meet Chinese safety and emission standards.

The school bus segment is in a similar situation. Medium and small cities and towns offer the largest potential market for school buses. But customers are extremely price sensitive, which explains why domestic bus makers still monopolize output and sales of buses and school buses.

The price of a Bluebird or Navistar school bus is at least three times more than a local product. Even after halving the price of a 10-meter school bus to ¥300,000 ($47,619) by working with Chinese partners, it is still double that of a similar local make. According to statistics released by China Association of Automobile Manufacturers, the average price of products of 21 Chinese school bus makers is ¥150,000.

Moreover, school buses take up only a very small percentage of China’s bus market. For example, only 3 percent of students in Beijing take school buses with the rest of them using public or private transportation. Yutong Bus, China’s leading school bus maker, sold 13,728 buses through April of which only 2,900 were school buses.

Although sales of school buses rose in February to 2,925 units and averaged 2,000 in March and April, annual sales will be only 25,000 instead of the predicted 50,000 units.

Due to budget concerns many local governments are reluctant to offer financial support for public schools to purchase school buses. With many uncertain factors, demand for school buses in China may not soar as expected.


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