What is the current situation in the coach market?
“The current market remains incredibly tough for coach operators – and sadly many of our customers are fighting for the survival of their businesses. The tourism sector has been hit particularly hard and is still almost at a standstill. Coach operators are trying to be creative and find new opportunities elsewhere, but they are naturally very cautious about adding risk to their business. Scheduled line businesses are less affected because in many regions they offer an essential service to society. However, many lines have been cancelled and, although there is some traffic, there are fewer passengers and therefore less revenue for our customers.
“We are now approaching the start of the season for many operators. A normal season in Europe would generally begin in April but as with 2020, that will not be the case this year. We hope that conditions will improve in the peak summer months, but we are expecting significant limitations, and we have to accept that this is the reality for 2021.”
We are upholding the close relationships we have with our customers and are listening to their needs in these times of uncertainty.
How is Volvo Buses addressing the difficult conditions its customers are facing?
“Obviously we are upholding the close relationships we have with our customers and are listening to their needs in these times of uncertainty. The first step Volvo Buses took was to make our coaches safer with the Clean & Care programme, which among other things offers continuous disinfection for air and all surfaces inside the vehicle, partition walls to protect the driver, high efficiency active filters and onboard sanitisers. It not only targets the coach owner and helps support their business, it also factors in the safety of the crew and of course the passengers. It has been well received by customers who have opted to use it.
We understand that there are two main obstacles to restarting coach businesses – limited cash flow and uncertainty in the market. That’s why we have teamed up with Volvo Financial Services to launch Flexible Financing – a number of smart rental and buying solutions
“We also understand that there are two main obstacles to restarting coach businesses – limited cash flow and uncertainty in the market. That’s why we have teamed up with Volvo Financial Services to launch Flexible Financing – a number of smart rental and buying solutions that include lower initial investment, shorter commitment periods, attractive buyout options and possibilities to change the agreements over time. They have been carefully designed to ease the way forward when customers restart operations.”
Can you explain how the Flexible Financing options work?
“There are four different options now available to address the current situation. The first one is short-term rental, which allows businesses to rent coaches for three months up to a year, with an attractive option to claim a high share of rental payments back if the vehicle is purchased at the end of the agreement. It’s a good low-risk option for testing the market. The second offering is a pay per kilometre solution for a minimum of two years. A minimum mileage is specified and then you pay as you go per kilometre when you exceed it. The third option is a seasonal lease where you pay more or less according to seasonal variations. Finally, when purchasing a coach, it is now possible to delay the repayments for the first three months, and Volvo Buses will cover the interest costs during this period. Flexible Financing applies to stock vehicles and is available immediately to both new and existing customers in selected markets across Europe, and for the foreseeable future or until market conditions dramatically improve. We will also review each option moving forward – if we feel one solution is working particularly well, it is likely that we will continue to offer it.”
Can we expect other initiatives when customer businesses are up and running?
“Yes, looking ahead, we are pleased to announce that we will be offering two new service contracts to provide peace of mind for our customers when normal operations resume. These include Flexigold – a flexible, usage-based contract that offers all the uptime benefits of the Volvo Gold Contract but also follows the seasonal fluctuations of a coach business. It works by recording the mileage of the vehicle via real time monitoring and allows for a deviation of plus or minus 20 per cent on an annual basis compared to the mileage specified in the agreement. Put simply, if you drive less, you pay less. The aim is to better accommodate the seasonal nature of the coach sector. We will also be introducing Gold Contract Extended. It combines our Gold Service Contract with Towing Extended and also covers additional costs should a breakdown occur, such as a replacement coach to complete the trip or hotel accommodation for passengers up to the value of 5,000 Euros.”
What does the future hold for a sector that has been severely impacted by the pandemic?
“It is very hard to predict, but 2021 is going to be another difficult year for the industry as it tries to get back on its feet and welcome passengers – albeit in smaller numbers and more likely towards the end of the peak season. We must ride out this storm together, and we hope that these new initiatives will help support our customers through this uncertain period. On a positive note, we believe there is a longing to travel among many consumers, and we are very much looking forward to a refreshed and revitalised coach sector in the future.”