July 26, 2016 Innovative Routes

Volume 11 | Issue 3

Busscar has been manufacturing buses since the dawn of Brazil’s automotive industry. Michael Sommers discovers how the pioneering company has managed to remain an inventive driving force in this growing segment.

Augusto Bruno and Eugênio Nielson got into the bus business by pure chance. The Brazilian brothers of Swedish descent were actually carpenters who decided to open up a woodworking shop together in 1946, in the town of Joinville, Santa Catarina. The idea was to manufacture custom-made wooden furniture, desks, and window frames. Any item a client wanted, Nielson & Brother would make. This motto explains why, in 1948, the brothers didn’t turn down a job to remodel the body of a bus (at the time, buses’ structures were made from wood). Nor did they balk, in 1949, at building the body of a bus in its entirety, which they then mounted upon the chassis of a Chevrolet Gigante. In fact, the fruits of their labor became the prototype for a whole new business that would transform them into one of the leading bus manufacturers in Brazil and Latin America.
ENTERPRISING INITIATIVE
From the beginning, the enterprising initiative and innovative solutions that the Nielsen brothers brought to their small start-up were defining characteristics that seduced customers and propelled the company’s growth. In the early 1960s, Brazil’s automotive industry was still in its nascent stages when Carrocerias Nielson, under the helm of Augusto’s son, Harold, launched its first prominent new bus model. The Diplomata put the company in the vanguard of the coach bus segment. In fact, the very name itself became synonymous with intermunicipal buses. It was the first of many revolutionary products that the company would launch over the next few decades. In 1987, it took a giant step forward when it entered the urban bus market with the state-of-the-art Urbanuss. In the 1990s, the company changed its name to Busscar Ônibus and the innovations only seemed to increase. Under its new moniker, in 1998, Busscar launched the Panorâmico DD, a standard-setting double decker coach, and the following year it branched into the growing microbus market with the Micruss. In 2002, the Urbanuss Pluss Tour became the first double decker tourism bus in Latin America, while in 2003, the Miduss won accolades as Brazil’s first rear engine Midi Bus.

Busscar’s marketing manager, Rodrigo Pikussa, emphasizes that the Nielsen brothers’ pioneering spirit is still very much alive, and is one of the major factors that continues to drive the family-owned company (currently operated by the third generation of Nielsens) forward. “Busscar is the only Brazilian manufacturer with its own experimental engineering laboratory,” he points out. “We carry out all sorts of structural tests in our own plant. As a consequence, we achieve higher quality in terms of resistance and durability than many of our competitors – right from the outset, during the conception and design of our buses. This results in better performance on the road and earns us the confidence of clients and consumers.”

HIGH STANDARDS
According to Pikussa, high design standards in terms of functionality, sturdiness, and sheer attractiveness constitute one of the biggest selling points of Busscar’s products. With regard to coach buses – the company’s traditional specialty and main focus, representing 60 percent of total sales – Busscar stands out for its design, durability, and trustworthiness. Together with its post-sales service network of parts replacement and technical assistance, these characteristics are also what set apart its urban buses, which account for 30 percent of all sales, from those of its competitors.

Indeed, Busscar has a strong presence in Brazil’s bus segment, with a 15 percent share of the marketplace. Says Pikussa: “In the urban bus segment, we have around five or six major competitors. Caio is ranked number one, followed by Marcopolo and Ciferal and then us. However, in terms of our specialty, which is coach buses, we have around of 30 percent of the market, only slightly behind Marco Polo. The company’s more recent foray into the microbus segment (which already accounts for 15 percent of sales) has seen it competing with a much greater number of manufacturers due to the smaller expense of producing these vehicles. Nonetheless, based on the segment’s current growth, Busscar believes expansion into this niche market was of strategic importance.

PREPARED FOR THE FUTURE
“In the Brazilian market, the switch to lighter buses that use less fuel, are non-polluting, and have lower operational costs constitutes an important trend,” declares Pikussa. Brazil is already in the vanguard in the production and use of ethanol along with flex fuel vehicles that run on a combination of gas and alcohol. “Right now, we’re looking at the possibility of buses that use a combination of alternative fuels, among them natural gas, which emits far fewer exhaust fumes,” confesses Pikussa. With this goal in mind, Busscar recently entered into a partnership with Brazilian petroleum giant, Petrobrás. The company is also the only one manufacturer of electric low-floor trolleybuses that have been successfully operated since 2001 in São Paulo.

Aside from developing new technology, Busscar is also forging ahead with the creation of new and alternative products, from smaller and intermediate sized buses with more agility to larger biarticulated vehicles that offer more space. “Both of these types of products facilitate the creation of the new and improved BRT (Bus Rapid Transport) systems that are being implanted in major Latin American cities such as Bogotá, Santiago, and Lima.” Indeed, inspired by the pioneering mass transit system that was inaugurated in Brazil’s greenest city, Curitiba, in the 1970s – and served as an inspiration for urban planners throughout the world – Busscar developed a new line of larger bi-articulated vehicles for Bogotá’s new public transport system. The scale of the project was so large that it led Busscar to open up a joint-venture plant in Colombia, where it manufactures both urban buses and microbuses.

The Colombia plant wasn’t Busscar’s first foray beyond Brazil’s borders. In 1998, the company opened a plant in Mexico for the manufacture of coaches that are sold throughout Mexico and Central America. “Brazilian buses are renowned throughout the region for being top-of-the-line. For this reason, the region’s two major players, Busscar and Marcopolo, end up going head-to-head throughout Latin America,” declares Pikussa. “However, export growth depends on individual markets. Factors such as the exchange rate and the ‘Brazil cost’ (taxes, labor costs, tributary charges) mean that our products aren’t always competitive. It’s often cheaper to produce them elsewhere. Although we’re studying the possibility of further overseas plants, our main focus is on expanding here in Brazil.”

Indeed, the company is getting back on its feet after weathering a financial crisis in 2002-2003 and then undergoing a restructuring in 2004 that coincided with a reinvigoration of the domestic market. As a result, Busscar experienced growth rates of 90 percent, between 2004 and 2005, and of 30 percent between 2005 and 2006. While in 2004, it produced 1,697 buses, by 2007 that number had shot up to 4,381. Currently, at its 275,600-square-foot facility, Busscar produces 21 buses a day.

VERTICALIZATION
Key to its output – and to the singularity of its products – is the fact that Busscar is extremely verticalized. Adhering to the founders’ entrepreneurial approach, the company has always made most of its own components, including doors, windows, seats, and all plastic parts. It was with this goal of self-sufficiency in mind that it started two autonomous divisions (also located in Joinville). In operation for 25 years, Tecnofibras specializes in developing plastic technology and in producing parts for all Busscar’s vehicles as well as clients in Brazil’s automotive sector such as Volkswagen, John Deere, Mitsubishi, Ford and Mercedes. Launched in 2001, Climabuss manufactures air conditioning units for Busscar and for other clients in Brazil and overseas.

“We were always verticalized,” declares Pikussa. “We had to be since, from the outset, our specialty has been to produce customized buses. Our clients come to us with very specific demands and we have to have great flexibility in order to respond to them. The fact that we produce the majority of our components internally gives us this flexibility and competitiveness. It allows us to meet our clients’ needs and that is our number one priority.”

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