new York Daimler Truck has set itself ambitious goals for the expansion of the coach business in North America. “We want to be a driving force in the market,” explains the head of the newly created North America bus division, Thomas Rohde, in an interview with the Handelsblatt. “In the medium term, we are aiming for a market share of 15 to 20 percent.”
That would be a significant increase: According to its own figures, Daimler Buses currently has a market share of less than five percent in the USA. The Setra brand buses recently sold in the USA are based on a 20-year-old platform. Daimler is therefore opting for a completely new start in the USA.
The Swabians have been active in the USA with buses since the takeover of competitor Kässbohrer and its Setra brand in 1995. The Mercedes-Benz brand has not been used there before. “That’s changing now,” says Rohde. Shortly before the corona pandemic in 2019, Daimler examined its own presence in North America – with a clear result: “We were not successful with the previous concept,” says Rohde.
For a long time, Daimler had relied on a general agent model with a main importer that changed several times and sold the Group’s Setra buses. In 2019, the new subsidiary “Daimler Coaches North America” (DCNA) was founded with headquarters in Fort Mill, South Carolina. Rohde was her first employee.
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The daughter now has 30 employees. These work primarily in the import center in Jacksonville, Florida, and as sales experts in the four regions West Coast, Northeast, Southeast and Central. As part of a roadshow, they introduced themselves to buyers and workshops.
Tourrider bus from Istanbul
DCNA wants to be successful with the newly developed Tourrider, a comfortably equipped diesel bus for long-distance travel, which Daimler offers in North America in two equipment levels. List price is upwards of $500,000. The buses are produced in the group’s own bus factory near Istanbul and then exported.
The buses are tailored to the needs of North America and are not available in any other region of the world. “Due to the high use of road salt in the Northeast of the USA, we had to design the bus as a stainless steel concept. A separate shell construction hall was built in Turkey for this purpose,” explains Rohde. There are also other American customer requests – such as a split windscreen that makes it easier to replace in the event of a stone chip.
“The first customer vehicles will arrive in the USA at the end of October or beginning of November,” says Rohde. In 2023 they want to increase sales significantly.
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Group circles say that Daimler hopes to be able to sell a mid-double-digit number of buses by the end of the year. By 2023, the market share should be in double digits. In view of the 1700 coaches that are sold in the USA in normal years, then theoretically almost 200 buses could be sold.
If the market share can actually be increased to 20 percent one day, Daimler would even sell more than 300 buses per year. Add in the aftermarket business, which brings in a four-digit sum per bus each year, and in the best-case scenario, Daimler could generate more than $170 million in bus sales in North America.
Important long-distance bus market
However, such example calculations are subject to large uncertainties. New sales of coaches in the USA fell from 1,700 to 500 in the wake of the corona pandemic. And buses in the US are operated by many small and medium-sized tour operators, four-fifths of whom own fewer than 10 buses, for an average of one-third longer than in Europe.
“Many customers have moved their buses less in two years of the pandemic and can therefore delay new purchases,” says Rohde. Nevertheless, he believes that demand will now pick up again. “We already have the first major orders on the books,” says Rohde. One of the first Daimler customers is Yankee Line from Boston.
A partner from Germany could also help with the expansion: Flixbus. The Munich-based company took over the traditional US supplier Greyhound in 2021 and wants to grow strongly in the USA. Tourrider buses could be used for this – even if nothing has been signed yet.
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“Of course we speak to Flixbus. We have the same goal: to get people from private transport to buses,” says Rohde. However, the Flixbus partners – the local bus companies who bring the Munich company onto their platform – would still cover a lot from the stock.
The Daimler bus business in North America should also quickly break into the black thanks to a lean cost structure. “We act like a start-up,” says Rohde. His company buys all administrative services from Daimler Truck North America, which is much larger with around 30,000 employees and also has a headquarters in Fort Mill and represents the Group’s important truck division. “We want to concentrate fully on the customer. Daimler Truck North America helps us with the administration and offers maintenance services.”
DCNA deliberately limits itself to coaches. There are no plans to sell city buses and regular-service buses in the USA. Since the public tenders in this segment of the bus market stipulate American production, Daimler cannot compete with its buses from Istanbul.
Difficult expansion
US industry experts and competitors believe that the ambitious expansion will not be easy. “Many Americans frown on driving Greyhound, Trailways and the like. Planes or cars are preferred for long-haul routes,” says a top manager from the industry. Those who drive long-distance buses often have limited income. Therefore, the reputation of the means of transport is not the best. “Daimler will have to market its buses well in order to establish them permanently.”
Daimler Truck CEO Martin Daum had already announced to the Handelsblatt in 2021 that he wanted to use the “enormously attractive” long-term potential in the bus sector: “Look at North America. So far we have hardly been present with coaches. Only recently, however, did we present a Mercedes touring coach there: extremely luxuriously equipped and networked.” Daum was convinced: “This is the ideal vehicle for replacing planes for short flights on long-distance bus routes in the USA.”
In the Handelsblatt interview, Daum had also announced hydrogen buses “in the medium term”. By 2030 there should be a “CO2-neutral” vehicle range in every segment. However, the new offer in North America is not that promising: the Tourrider buses are powered in the classic way with 450 hp diesel engines from Mannheim. There is also no electric alternative.
“We want to be directly successful over the long haul. That’s why we’re starting with buses that are based on the existing infrastructure,” explains Rohde. Own bus production in North America is not planned for the foreseeable future.
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