DEALERS WEIGH IN: How the Economy Is Affecting Business, Customers
turn affects vehicle manufacturers and other suppliers. Clearly, school bus dealers are also feeling the pinch. In August and September, School Transportation News reached out
I to
more than a dozen companies that are representative of the seven school bus manufacturers, large and small, and asked several questions based on the economy and the challenges facing dealers. About two-thirds of the respondents
said they consider their company to be representative of a small business, as is currently defined by the federal government.
For wholesale trade ❝
industries, small businesses employ 100 or fewer employees and gross $6 million per year in sales receipts. So, it also comes as no surprise that the current economy ranked as the No. 1 concern for school bus dealers.
t’s no secret that shrinking state and local budgets continue to squeeze school districts nationwide, which in
what buses it wants in the contract, as well as when and how the buses are to be delivered. “Tis would give the dealership the
opportunity to present all the value-added components of the company, giving the customer a higher quality product and superior service after the sale, which is exactly what the customer deserves and wants, but it is hard to do with a low bid,” said the dealer, adding that retaining high levels of customer service is a “battle” when dealing with low-bid margins. “Te biggest challenge may lie in getting
school systems to think differently, and creatively, about their bus purchases and service options to counter the ‘old way’ of doing business,” added another dealer from Florida. A New England dealer said the school
bus manufacturers can assist dealers by extending longer, interest-free terms on buses kept in stock. A dealer in Florida said he has noticed the manufacturers are
economy is affecting their ability to hire people who know the school bus business. One dealer from the Midwest said that it has become much more difficult to hire “competent mechanics.” “Te ones we have are very good, but
with the company’s growth, we need many more,” said another dealer from Georgia. Another
dealer said his company
has increasingly focused on customer service, which means more mobile service technicians must be available to assist school districts in performing their
Te biggest challenge may lie in getting school systems to think differ-
ently, and creatively, about their bus purchases and service options to counter the ‘old way’ of doing business. ❞
— Anonymous Florida Dealer Respondents said limited funding for
school district purchases of replacement buses is their main challenge, which most visibly is affecting company sales numbers. But a variety of other issues have also arisen, or continue to pose challenges, such as remaining profitable in the low-bid environment of school bus procurements. A dealer in Georgia said he would like to see more customers bid procurements as RFPs instead of IFBs, or invitations to bid, wrapped around a government agency such as a school district knowing exactly
already offering creative financing packages and incentives related to parts and training to help drive business. Another dealership said factory-sponsored stocking programs from the OEMs can ease the burden on dealer inventory as well as upfront expenditures. Several dealers also indicated that aggressive price cuts by out-of-state vendors are a problem that can adversely affect repair and warranty work. Interestingly, only one dealer mentioned
rising fuel costs as the biggest burden to overcome. Several others said the
28 School Transportation News Magazine October 2011
warranty work and conducting vehicle safety inspections. “Our customers are seeing their budget
dollars shrink, which leads to less manpower at their level,” he added. “We’re trying to assist whenever possible with our own personnel.” Another suggestion a dealer in Alabama
offered was for OEMs to provide even more
localized technical training. All
school bus manufacturers already hold at least semiannual training at their plants and also supplement this training with events at local dealerships. ■
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