TABLE OF CONTENTS FOREWORD ............................................................................................................................... III ACKNOWLEDGEMENTS.................................................................................................... III DISCLAIMER/NOTICE ...................................................................................................... IV GLOSSARY................................................................................................................. V EXECUTIVE SUMMARY........................................................................................................... 1 STUDY GOALS & OBJECTIVES.......................................................................................... 1 HIGHLIGHTS OF THE MARKET OVERVIEW .......................................................................... 2 KEY FINDINGS RELEVANT TO PARTICIPATING PUBLIC TRANSIT AGENCIES ..................... 4 KEY FINDINGS RELEVANT TO CUTAWAY BUS MANUFACTURERS.................................... 6 KEY ELEMENTS OF OBSERVATIONS & CONCLUSIONS ........................................................ 7 INTRODUCTION ....................................................................................................................... 11 RESEARCH BACKGROUND.............................................................................................. 11 RESEARCH METHODOLOGY ........................................................................................... 13 CHAPTER 1: MARKET OVERVIEW..................................................................................... 16 1.1 PRINCIPAL SERVICE FOR CUTAWAY VEHICLES IN PUBLIC TRANSIT................... 16 1.2 FLEET SIZE, VEHICLE LENGTH & OTHER CHARACTERISTICS............................. 19 1.3 VEHICLE COSTS ................................................................................................. 23 1.4 FUEL & PROPULSION SYSTEMS .......................................................................... 26 1.5 MARKET SUBSTITUTIONS................................................................................... 33 1.6 FEDERAL FUNDING & RELEVANT LEGISLATION ................................................ 37 1.7 RIDE SOLUTION –- PUTNAM COUNTY, FLORIDA ................................................ 42 1.8 REPRESENTATIVE TRANSIT AGENCIES ............................................................... 43 1.9 CUTAWAY MANUFACTURER HIGHLIGHTS AND INFORMATION........................... 49 CHAPTER 2: TRANSIT AGENCY SURVEY RESULTS & ANALYSIS ............................ 57 2.1 OWNERSHIP & OPERATIONS .............................................................................. 58 2.2 CUTAWAY FLEET INFORMATION........................................................................ 60 2.3 TYPES OF SERVICE ............................................................................................. 63 2.4 NEW PURCHASES & DELIVERY .......................................................................... 65 2.5 FEDERAL PROVISIONS, PROCUREMENT ISSUES AND FUNDING ........................... 67 2.6 FUEL SYSTEMS & NEW TECHNOLOGIES............................................................. 73 CHAPTER 3: CUTAWAY MANUFACTURER SURVEY RESULTS & ANALYSIS ........ 76 3.1 FINANCIAL PERFORMANCE ................................................................................ 76 3.2 PRODUCTION CAPACITY .................................................................................... 78 3.3 PRODUCTION MATERIALS AND COMPONENTS.................................................... 79 3.4 LABOR FACTORS................................................................................................ 80 3.5 SALES, GENERAL AND ADMINISTRATIVE EXPENSES .......................................... 81 3.6 WARRANTY ISSUES............................................................................................ 82 i CHAPTER 4: ANALYSIS OF INTERVIEWS WITH CUTAWAY MANUFACTURERS 84 4.1 CURRENT STATE OF THE CUTAWAY BUS MARKET ............................................ 84 4.2 FACTORS RELATED TO PUBLIC TRANSPORTATION & THE FTA.......................... 87 4.3 PROCUREMENT ISSUES....................................................................................... 91 4.4 SALES & MARKETING, LABOR, MATERIALS, WARRANTY ISSUES, R & D .......... 94 CHAPTER 5: CONCLUSIONS & OBSERVATIONS ............................................................ 99 5.1 COMPETITIVE LANDSCAPE FOR CUTAWAY MANUFACTURERS ........................... 99 5.2 CHARACTERISTICS OF CUTAWAY MANUFACTURERS VERSUS HEAVY-DUTY .. 104 TRANSIT BUS MANUFACTURERS.................................................................................. 104 5.3 SUMMARIZED MARKET TRENDS ...................................................................... 105 5.4 RECOMMENDATIONS........................................................................................ 107 INDEX OF APPENDICES ....................................................................................................... 110 APPENDIX 1: DATASET................................................................................................. 111 APPENDIX 2: LIST OF U.S. TRANSIT AGENCIES REPORTING CUTAWAY VEHICLES....... 148 APPENDIX 3: TRANSIT AGENCY SURVEY INSTRUMENT................................................ 153 APPENDIX 4: MANUFACTURER SURVEY INSTRUMENT ................................................. 161 APPENDIX 5: MANUFACTURER INTERVIEW QUESTIONNAIRE ....................................... 167 BIBLIOGRAPHY ..................................................................................................................... 177 ENDNOTES ............................................................................................................................... 182 ii Federal Transit Administration Foreword The U.S. cutaway vehicle manufacturing industry provides the most widely available form of public transportation today. Generally associated with demand response, these small-to-medium-sized cutaway vehicles are used by thousands of U.S. transit agencies in addition to numerous private sector applications. By comparison, manufacturers of heavy-duty transit buses face greater challenges. As reported by HD/FKA in the Federal Transit Administration’s (FTA) 2005 Non-Rail Vehicle Market Viability Study, no fewer than ten bus manufacturers have either reorganized or gone out-of-business. Outside of the cutaway bus market, the financial condition of most bus manufacturers is tenuous at best. The FTA sponsored this research, following the 2005 bus study, to provide an exploratory evaluation of the U.S. bus manufacturing industry as it relates to small-to medium-sized cutaway transit buses. This study is available to all interested readers but includes information particularly salient to federal transportation officials, transit agency representatives, and bus manufacturing industry professionals. The study includes a market overview and results/analysis of surveys, questionnaires, and interviews with representative U.S. transit agencies and U.S. cutaway bus manufacturers. The first chapter represents the market overview component of the report and provides the background and overview of the current U.S. cutaway bus industry as well as trends that affect the cutaway bus market. The second chapter presents key findings and perspectives provided by transit agency participants. The third and fourth chapters report on information gleaned from cutaway manufacturers based on interviews and surveys. The final section presents conclusions as well as observations regarding the competitive landscape faced by cutaway bus manufacturers in the United States. The primary research –– information provided by representative transit agencies and bus manufacturers –– is an essential element of this report. It should be noted that commentary provided by transit agency survey respondents has not been attributed to specific individuals or agencies in order to comply with the non-disclosure statement that was printed on the survey instrument. Additionally, the financial data and other company information, as well as the verbatim commentary, provided by the bus manufacturers are summarized, analyzed and presented in such a way that the protection of proprietary data is assured. Acknowledgements This research would not have been possible without the support of the transit agencies and bus manufacturers that graciously participated in this study. All of the participating transit agency officials and bus company executives shared important perspectives, information, and experiences that were useful in analyzing the current state of the small to-medium-sized cutaway vehicle market. In addition, the Federal Transit Administration ––especially Helen Tann, Henry Nejako, Michael Malloy, Roy Chen and others –– provided valuable advice. iii Federal Transit Administration Disclaimer/Notice This document is disseminated under the sponsorship of the United States Department of Transportation in the interest of information exchange. The United States Government assumes no liability for its contents or use thereof. The United States Government does not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the objective of this report. iv Federal Transit Administration Glossary Acronym or Abbreviation Full Description ADA Americans with Disabilities Act AFV Alternative Fuel Vehicle APTA American Pubic Transportation

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