Mobility-On-Demand: The Future of the Bus Industry By Richard Demirjian, T/CCI Manufacturing President
April 30, 2018 in Blog
Government regulations & funding, clean air standards, the urban impact of global warming, hot spots, traffic congestion, and changing demographics are driving innovation in the bus industry around the world. India requires an investment of USD $750 billion to achieve its ambitious transformation in urban transportation and supporting infrastructure to meet the above challenges.
The bus industry, like many sectors of transportation, works to keep up with trends in consumer comfort, convenience and travel patterns. With the number of variables that contribute to the evolution of the market, it’s more critical than ever for bus manufacturers to stay a step ahead of the changes. By offering cleaner diesels, Hybrid and Electric Bus options.
T/CCI Manufacturing has been servicing the bus market since 2007. Just ten years ago, air conditioning was a luxury, far from typical in the industry outside of large touring buses. That started to change in the early 2000’s. In North America, manufacturers were starting to add air conditioning to school buses, but it has yet to achieve 35 percent penetration. In South America, where the mini and midi bus were a primary mode of city transportation, people were willing to pay a little extra to ride air-conditioned buses.
We are seeing that in India too now. People have demanded Bus Air-Conditioning and are willing to pay a premium for that comfort and connectivity. Initiatives such as ‘Shivshahi’ type schemes of STUs to Private Operator Partnerships will spearhead growth in Bus HVAC from luxury Coaches to Urban and Intercity bus sectors. The innovative moves of some HVAC manufacturers to offer HVAC systems on a charge per kilometer basis including installation, life cycle management Repair and Maintenance Contracts spreading the capital cost will increase HVAC penetration of the bus market through new build and retrofit. Such partnership schemes should increase the HVAC market to eight percent installed in the next five years.
In China, we’ve seen the whole bus market explode. Five to seven years ago, there was no air conditioning on buses in the region and the large compressor market only made 10,000 pieces a year globally. Today, China is the world leader and 90,000 – 99,000 air-conditioned busses enter the market each year. 2017E HVAC was installed on 47 percent of electric buses and 46 percent of cleaner diesels. HVAC penetration of the Chinese Bus parc is only 27 percent. The higher 2017 percentages now reflect the urgency to tackle urban air quality and industrial SMOG.
The air conditioning component is just one part of the bus industry that must stay ahead of global changes in the market to accommodate demand. Companies like T/CCI have been working with bus manufacturers to fill a significant niche and as the market continues to evolve, the ability to meet these needs will be critical to the survival of global manufacturers.
Here’s a snapshot of the next five years:
Global demand for buses is expected to grow 4.3 to 5 percent annually through 2018-2022. Most of that expansion will be driven by strong unit market demand in Latin America, Middle East/ Africa, China and India an incremental growth of circa 190K.
The Indian market will grow the intercity/ Premium Bus sector by 13 percent p.a. 7.5-12T midi bus sector by eight percent p.a. and the 12T to 16T MDV/HCV sector nine percent p.a. The Hybrid, Electric and CNG powered units will grow by double digits but with a cost factor of 3-4 times the ‘value’ bus market leader, demographics will dictate a need for seating capacity, comfort and safety through the implementation of the new Bus Build Code AIS:054 and BS4 emissions engines.
Today, while the industry is still focused on comfort and efficiency, there is a significant shift to meet more stringent environmental standards. The move to electric buses is gaining traction. The air conditioning industry is challenged once again to ensure maximum comfort, while running more efficiently and taking up less space. As regulations get tighter, it’s getting harder for diesel engines to meet the environmental requirements, so the bus industry is refocusing on propane, Hybrid and all-electric solutions and facing significant cost down challenges compared with conventional Diesel driven solutions.
All major component manufacturers need to embrace and contribute to these technological advancements. What that means for T/CCI and the Air- Conditioning industry is finding ways to take the air conditioning system compressor from engine driven, to be integrated into their air conditioning unit on top of the bus.
When it comes to electric buses, we are prepared for them to follow the auto industry. It is realistic that electric buses will take over streets in many parts of the world in the next five to 10 years.
Our engineers have been working to make scrolls that are lighter weight, with less pulsations that we can turn faster and are more efficient. It’s about finding the right formula to blend the weight, speed and efficiency into an electric package.
T/CCI’s first electric compressors are sampling right now with customers in the field. We hope to be selling production compressors later this year and we fully anticipate the production volume will double every year for the next five years. By 2023, we will be producing as many electric compressors as we are piston type compressors.
Like the integration of any industry-wide change, certain regions of the world will adopt the new technology and designs before others. China will lead way in the next five years to address its high pollution issues. The Indian market is preparing for the infrastructure changes needed to adopt a broad-based change to electric. It will be closer to 10 years before the United States transitions to electric buses, but the change is coming.
When we talk about the future of the global bus industry, the development of technology goes far beyond meeting the needs of the electric bus market.
In many countries, European nations in particular, regulations are emerging that will require new refrigerants. These refrigerants, while more environmentally friendly, will reduce compressor capacity. We’re working to make smaller and more efficient solutions.
T/CCI is developing some new categories of compressors, like the QP25, that will provide the same footprint as the 210cc compressor but with 20 percent more cooling capacity.
Sensor technologies are also a critical component for manufacturers in the research and development of new products. At every turn, were looking for ways to capture real-time data. Our units are designed to perform in extreme conditions. As we add sensors onto the compressors, we will be able to feed information back to capture real time data from the road. The real time data will be critical to document how our compressors are performing within certain systems in variable conditions, and most importantly, to increase up-time on vehicles and prevent catastrophic events before they happen.
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