Alexander Dennis to pause coach production in 2025. Challenges and strategies on the UK bus market according to MD Paul Davies

Alexander Dennis has had a strong year in 2024, maintaining its position as the UK’s market leader. With over 1,000 buses delivered by the end of October and projections to reach 1,500 by year’s end, the company continues to navigate a highly competitive landscape, where international players, particularly from China, are beginning to make significant inroads.

However, the company has also had to make difficult decisions, such as pausing coach production in 2025 due to declining volumes since the pandemic.

We met Paul Davies , President and Managing Director of Alexander Dennis, at Euro Bus Expo 2024 in Birmingham, where the company also shared further details on the upcoming Enviro200EV model. We discussed the growing influence of global competitors, the impact of government initiatives like the Better Buses Bill, and how Alexander Dennis is adapting its strategy to stay ahead in an increasingly competitive and evolving market.

We were delivering as many as 200 coaches per year before the pandemic, but since the pandemic we have been around 50 – 60 per year. That’s why we are going to pause coach production next year because we don’t have enough volume to have a dedicated line.

The UK has established itself as a leader in zero emission bus deployment in Europe so far…

The speed of transition to zero emission buses in the UK has been quite fast thanks to government fundings not only to support purchases but to support operations. These schemes have been instrumental in stimulating the industry.?

Having said that, the diesel bus market is still quite strong for us. We are quite relaxed as we have chosen to be propulsion agnostic to best serve our customers. On one side, we invested money to bring new products to the market, but on the other side we have also invested in having a good diesel bus range and that market is still strong, although less open to disruption and gaining less attention.?

You recently stated that the UK bus market is an “uneven playing field”. Can you elaborate more on this??

In Scotland for ScotZEB2 the requirement to compete as an industry player was to fulfil the Fair Work First standards of employee remuneration, welfare and safety, which for us is ok as we have the practices already in place including paying more than the real living wage. But what was frustrating is that this was only applicable to businesses based in the UK, not to OEMs based outside of the UK, whether in Europe or elsewhere. This is illogical as it is disadvantageous to companies based in the UK that like us have been investing a lot in product technology and jobs – we employ 1,900 people across the UK and utilise many UK suppliers.

Do you think import duties can play a role in this?

There are a number of issues that we argue could be reviewed. Tariffs are a big talking point. Import duties on diesel buses are 16 percent, and the main players in the UK market have historically been European-based manufacturers. Import duties on electric buses are only 10 percent. This market is much more open to disruption due to Chinese players. My argument would be: China has a head-start on zero-emission technology due to government investments and support. This difference should be reflected in the commercial environment to ensure that our domestic industry can flourish while we continue to deliver competitive products.?

If you are a new company only selling zero emission buses, then it’s a challenge. We have seen the story. We are lucky we will have delivered 1,000 diesel buses this year, plus we have a very strong aftermarket business. If you only focus on zero-emission buses there will typically be a smaller aftermarket revenue stream given there are fewer moving parts than on diesel vehicles.?

How do you expect the Better Buses Bill to impact the demand for zero-emission buses?

Clearly the political landscape is changing with a new government and a change in place towards publicly-managed public transport.?

Looking beyond the Better Buses Bill, the Labour government have said that they want maximum economic benefit out of public funding. They are talking about a reform of procurement policies in order to give some level of consideration for companies such as ours that are based in the UK, pay wages in the UK and therefore have a higher cost structure.

Of course we are glad to hear that the economic benefit of jobs in the supply chain is going to be valued somehow. I don’t expect the government to help us for free. Our primary focus is on delivering first class products as the UK has a very challenging bus market and customers have very high expectations. So our main job is to make sure we’re offering good products.

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