South Africa’s public transport industry is a complex and challenging one, but a rewarding frontier if tackled correctly. For Marcopolo, one of the world’s largest bus body manufacturers, it is a challenge the group can take in its stride; we spoke with Mikel Ecenarro, General Manager of Marcopolo South Africa, who told us about the company’s plans to change the industry from the inside.
Headquartered in Brazil, Marcopolo is the country’s main body manufacturer for buses, and one of the largest in the world. The company has been in operation for seven decades, six of which have included the international market, and one of its main overseas operations is its presence in South Africa. This South African branch of the company began operations in 1996, and in 2001, opened its current manufacturing facilities, which were later refurbished in 2009. As for Mikel, he has been with the company for two years, but in his time as General Manager, he has overseen this limb of Marcopolo beginning to tackle a series of wide-scale changes as a part of his 2022 vision. These changes would not only affect the company itself, but its clients, and the way South Africa as a whole approaches the purchasing and manufacturing of its buses. Before breaking this down for us, Mikel gave us some context for how the company is situated within its market:
“What I believe makes us quite unique is our wide product range, which offers standard commuter buses through to luxurious coaches. Another unique quality of Marcopolo is our production capacity. Our factory here in Johannesburg gives us a full capacity of 1500 buses a year – the highest building capacity for buses in South Africa. Despite that capacity, we are currently only producing 300 a year, because the market is not asking for more.”
Marcopolo’s vast build capacity was made possible in the upgrade of its facilities in 2009, in order to meet a tender in 2010. “Usually, the government issues contracts without much time in advance, so they need buses urgently.” The market has been coming down for the last four years, by 15% on average each year. “It’s a paradox, because the population is growing. The bus is thought to be one of the most efficient and cheapest modes of transport: in most countries, if the population is growing, they utilize more buses, but in South Africa there is an exception.”
The reason for this is largely linked with a lack of clear policy and proper government support: the laws around permits and tenders are unclear, according to Mikel, and the country is also not investing in the supportive infrastructure that an effective and growing bus service would require. Given this lack of support, the bus industry is not growing as needed, and instead, privately run taxi companies are filling the unanswered demand. Taxi companies are cheaper to establish than a bus company, and rely far less on government policy. However, whilst they are a convenient solution for company owners, they lead to more traffic and congestion, more pollution, and far more expensive travelling costs for South Africans.
However, even though this means the bus industry is not currently growing as it should, it hasn’t come to a stand-still, and it hasn’t stopped Marcopolo developing what it offers.
Traditionally in South Africa, manufacturers produce buses in bulk, and customers purchase from this stock. Marcopolo is hoping to alter the mindset of its market and to change this tradition. The company is expanding its engineering capabilities, with the aim of being able to provide bespoke buses, made to brief, as quickly as it would take a customer to receive a stock bus. This wait time for a stock bus is approximately one month – this is the industrial lead time frame that Marcopolo is looking to match.
On top of this, the company aims to improve the value of its products to its customers by offering Marcopolo Services – services that support a bus for its full 15-20 year life. “In many cases, our customers are modifying and refurbishing their buses by themselves or with unofficial third parties. What we’re now offering is that you can have that bus refurbished, reconfigured or upgraded by us. Bringing buses back to Marcopolo instead guarantees that the same skills used to build the bus will now carefully reconfigure it with the bus body building mindset, hence receiving an official OEM stamp, which will help to boost the bus’s value up at resale. Most importantly for Mikel, it expands the Marcopolo experience with the customer and with the product. “We want to show the customer that we offer the best total cost of ownership (TCO), so we definitely suggest being partners for the life cycle of a bus.”
This value is already partly in place due to the sheer quality of the company’s buses. Marcopolo is a well-known brand, and recognized for building reliable and robust products, setting the benchmark in the industry. “Our products last for 20 years, even in this harsh environment. We build buses that can cope on African and South African roads. The best total cost of ownership is not about buying cheap – it’s about buying intelligent, and in those 15-20 years, you’re going to have the return on the investment.
As Marcopolo South Africa is part of an international group, the basic designs for its buses originate from its headquarters in Brazil. However, the buses built in South Africa are very different to their Brazilian cousins. Whilst models may bear the same name in the two countries, their actual makeup will differ, as the South African engineers innovate on and alter these designs in order to respond to South African environment conditions. For example, the bus will be heavier, with a re-enforced structure, and it will be differently finished in order to better absorb the local road conditions. This process is ongoing, with designs constantly adapted and improved on, to make sure buses are as durable and suited to their purpose as they can be.
In order to achieve these high standards and consistent high quality, Marcopolo has recently re-opened its in-house training centre, which trains their workforce up for not only the existing production lines, but also to enable them to carry out the new bespoke services the company plans to offer. However, wisely, this change is not being introduced all at once. Instead of a wide-scale change, its introduction is gradual, with 2022 as a goalpost. This gradual introduction allows the company to focus in on its staff, training small groups of five or six at a time, to ensure they get the detailed input and support they need. This also allows the company to gauge the reception of these new services and to expand them as and when demand occurs. For bespoke services, these are first being offered to valued long-term customers.
When a market slows down, a company can either slow down with it, or push to rise to the top, and this is what Marcopolo is doing. New government policies and other changing factors may eventually allow the bus market to speed back up, and when it does, Marcopolo will have used this time well, and will be ideally positioned to benefit. Until then, by offering so much more to its customers than its competitors can, Marcopolo should have nothing to worry about, and may even spearhead a change to an industry attitude throughout South Africa.