Midland Bluebird Limited (T/A McGill’s) Volvo B7RLE/Wright Eclipse 2
Volvo to stop building complete buses in Europe.
Volvo Buses has announced that it will be ending production of complete buses and coaches in Europe as part of a new business model aimed at improving profitability and securing its long-term competitiveness. Wroclaw plant, where also electric buses are built, will be closed in Q1 2024. The manufacturer will concentrate on chassis production in Europe and leave Volvo-based bodies to others.
The decision comes after years of losses in the European market, and Volvo Buses plans to implement a new model already successful in other markets.
‘Our business in Europe has been loss-making for years. With this business model, that we already today apply successfully in many markets, we will improve profitability and secure our long-term competitiveness’ said Anna Westerberg, President of Volvo Buses.
According to Ms Westerberg, the company will continue to have the customer interface, offer a complete range of buses and coaches in partnership with selected external bodybuilders, and provide strong uptime service and a high standard of safety and quality. This will result in a leaner structure, improved flexibility, and the ability to better meet market requirements and customer demands.
Volvo Buses will continue bodybuilding manufacturing in Wroclaw until the first quarter of 2024, with orders for complete buses and coaches in Europe being delivered from the Wroclaw plant as planned. The company will also continue to give full service and support to both existing and new fleet offerings.
As part of the transition, Volvo Buses has signed a Letter of Intent (LOI) with Vargas Holding, which will divest Volvo Buses’ premises in Wroclaw and re-purpose the facility for future growth. The LOI includes Vargas Holding’s aim to offer employment to parts of the Volvo employees, some as early as the third quarter of 2023.
The decision to end production of complete buses and coaches will affect around 1,600 positions at Volvo Buses, with approximately 1,500 of these being based in Wroclaw. Volvo Buses says it has initiated discussions with respective unions and will work with Vargas Holding, local authorities, and other parties to support affected employees in finding new employment opportunities. My thoughts do go out to the staff involved, who will be facing an uncertain future.
Implementation of the new business model is expected to temporarily impact Volvo’s revenues in Europe during the transition period in 2024 and 2025. A restructuring provision of approximately SEK 1.3 billion (116 millions euros) will negatively impact operating income in the first quarter of 2023. The expected negative cash flow effect is estimated to be approximately SEK 1.0 billion, with the majority impacting 2024. Once the transition is completed, the move to the new business model is expected to make the European bus operation profitable.
If all this seems familiar the same sort of thing happened to Leyland Bus when Volvo took it over. Firstly the bodywork production ceased, then chassis production stopped in Leyland’s United Kingdom factory and then Volvo’s Irvine plant where it moved to, Ironically some of chassis production then moved to Wrocław when Irvine shut.
In the United Kingdom, at present the integral buses presently offered are the 7900H (Diesel Hybrid) and 7900E (Full electric). Sales have been modest, which is a polite way of saying it’s not sold well. Lothian has taken the most of hybrid type, with a small batch also going to First Berkshire. The electric version has went to Transdev Harrogate & District and Stagecoach West Scotland. Indeed Volvo had recently launched its new electric buses, the BZL range of single and double-decker buses, in partnership with MCV in the UK. So the 7900 was probably going to die a death anyway, in the UK at least.
However where it leaves coaches is more interesting. Volvo had been building integral coaches for some time, although in the UK it’s only been offering these for a few years. It’s offering has been 9700 range and it’s actually done reasonably well, McGill’s have some for FLiXBUS operations and more on order. Parks of Hamilton have recently taken delivery of some too, replacing Jonckheere bodies in Park’s preference. However it would appear that this integral model is to go as well, as it’s also built in Poland too. Of course Volvo coaches are also available in UK with either Alexander Dennis owned Plaxton and also MCV bodywork.
So Volvo will revert to just being a chassis manufacturer in Europe for buses, having preferred partners for bodywork. For many years in the UK, it’s partners were Wrightbus and many operators chose their products. An example of this is 2230 (SF11CWJ) seen here, which is a recent addition into the Midland Bluebird fleet, albeit still in McGill’s colours. Alexander Dennis and MCV bodywork was also an option, on double-deckers certainly. However since the insolvency event suffered by Wrightbus, very very few new Volvo buses have been bodied by the ‘new’ Wrightbus. Volvo’s new main bodybuilding partner in the UK is now MCV, although Alexander Dennis is an option for double deckers, particularly with Lothian Buses.
Midland Bluebird Limited (T/A McGill’s) Volvo B7RLE/Wright Eclipse 2
Volvo to stop building complete buses in Europe.
Volvo Buses has announced that it will be ending production of complete buses and coaches in Europe as part of a new business model aimed at improving profitability and securing its long-term competitiveness. Wroclaw plant, where also electric buses are built, will be closed in Q1 2024. The manufacturer will concentrate on chassis production in Europe and leave Volvo-based bodies to others.
The decision comes after years of losses in the European market, and Volvo Buses plans to implement a new model already successful in other markets.
‘Our business in Europe has been loss-making for years. With this business model, that we already today apply successfully in many markets, we will improve profitability and secure our long-term competitiveness’ said Anna Westerberg, President of Volvo Buses.
According to Ms Westerberg, the company will continue to have the customer interface, offer a complete range of buses and coaches in partnership with selected external bodybuilders, and provide strong uptime service and a high standard of safety and quality. This will result in a leaner structure, improved flexibility, and the ability to better meet market requirements and customer demands.
Volvo Buses will continue bodybuilding manufacturing in Wroclaw until the first quarter of 2024, with orders for complete buses and coaches in Europe being delivered from the Wroclaw plant as planned. The company will also continue to give full service and support to both existing and new fleet offerings.
As part of the transition, Volvo Buses has signed a Letter of Intent (LOI) with Vargas Holding, which will divest Volvo Buses’ premises in Wroclaw and re-purpose the facility for future growth. The LOI includes Vargas Holding’s aim to offer employment to parts of the Volvo employees, some as early as the third quarter of 2023.
The decision to end production of complete buses and coaches will affect around 1,600 positions at Volvo Buses, with approximately 1,500 of these being based in Wroclaw. Volvo Buses says it has initiated discussions with respective unions and will work with Vargas Holding, local authorities, and other parties to support affected employees in finding new employment opportunities. My thoughts do go out to the staff involved, who will be facing an uncertain future.
Implementation of the new business model is expected to temporarily impact Volvo’s revenues in Europe during the transition period in 2024 and 2025. A restructuring provision of approximately SEK 1.3 billion (116 millions euros) will negatively impact operating income in the first quarter of 2023. The expected negative cash flow effect is estimated to be approximately SEK 1.0 billion, with the majority impacting 2024. Once the transition is completed, the move to the new business model is expected to make the European bus operation profitable.
If all this seems familiar the same sort of thing happened to Leyland Bus when Volvo took it over. Firstly the bodywork production ceased, then chassis production stopped in Leyland’s United Kingdom factory and then Volvo’s Irvine plant where it moved to, Ironically some of chassis production then moved to Wrocław when Irvine shut.
In the United Kingdom, at present the integral buses presently offered are the 7900H (Diesel Hybrid) and 7900E (Full electric). Sales have been modest, which is a polite way of saying it’s not sold well. Lothian has taken the most of hybrid type, with a small batch also going to First Berkshire. The electric version has went to Transdev Harrogate & District and Stagecoach West Scotland. Indeed Volvo had recently launched its new electric buses, the BZL range of single and double-decker buses, in partnership with MCV in the UK. So the 7900 was probably going to die a death anyway, in the UK at least.
However where it leaves coaches is more interesting. Volvo had been building integral coaches for some time, although in the UK it’s only been offering these for a few years. It’s offering has been 9700 range and it’s actually done reasonably well, McGill’s have some for FLiXBUS operations and more on order. Parks of Hamilton have recently taken delivery of some too, replacing Jonckheere bodies in Park’s preference. However it would appear that this integral model is to go as well, as it’s also built in Poland too. Of course Volvo coaches are also available in UK with either Alexander Dennis owned Plaxton and also MCV bodywork.
So Volvo will revert to just being a chassis manufacturer in Europe for buses, having preferred partners for bodywork. For many years in the UK, it’s partners were Wrightbus and many operators chose their products. An example of this is 2230 (SF11CWJ) seen here, which is a recent addition into the Midland Bluebird fleet, albeit still in McGill’s colours. Alexander Dennis and MCV bodywork was also an option, on double-deckers certainly. However since the insolvency event suffered by Wrightbus, very very few new Volvo buses have been bodied by the ‘new’ Wrightbus. Volvo’s new main bodybuilding partner in the UK is now MCV, although Alexander Dennis is an option for double deckers, particularly with Lothian Buses.