SCOTTISH bus builder Alexander Dennis will today unveil a major alliance with a Chinese battery technology expert that could see the two companies manufacture up to £2 billion worth of vehicles.
Alexander Dennis, which employs about 1,000 people in Scotland, and Chinese company BYD expect to build 200 single-decker buses per annum over the next 10 years as they embark on a partnership focused on zero-emission electric vehicles.
The Scottish company estimated that the 12-metre, single-deck vehicles that it plans to produce with electric bus specialist BYD would represent total turnover of £660 million.
And Alexander Dennis revealed it was already in advanced discussions with BYD with a view to extending the alliance to include double-decker buses.
The Scottish company declared: “When this happens, there is potential to triple the scale of the current deal to almost £2bn.”
Alexander Dennis is a heavyweight international player in the manufacture of double-decker buses, with major export and domestic sales of such vehicles.
The large-scale alliance with BYD, the announcement of which coincides with Chinese President Xi Jinping’s visit to the UK, is Alexander Dennis’s biggest-ever joint venture, a spokesman for the Scottish company said.
The alliance is not expected to create additional jobs at Alexander Dennis, but will help to underpin current employment levels.
About 850 of Alexander Dennis’s employees work at its factory at Camelon in Falkirk. Other Scottish-based staff are employed at the company’s head office and product development site at nearby Larbert.
Alexander Dennis and BYD in July unveiled a £19m deal to build a fleet of electric buses to go into London next year.
Referring to today’s unveiling of the much larger-scale alliance with BYD, Alexander Dennis chief executive Colin Robertson said: “This is the start of an exciting journey with enormous potential, and we are delighted to be working with BYD.
“Their expertise in electric vehicle technology is second to none, while we have a global reputation for robust, reliable, high-performance vehicles that deliver what they promise, and are backed by world-leading parts and service support, both in the UK and international markets.”
Alexander Dennis employs about 1,000 people in total at its sites in Yorkshire and Surrey. It also has about 500 staff working overseas. About a further 1,500 people work on Alexander Dennis contracts in overseas manufacturing partnerships.
The Scottish company has established overseas manufacturing operations in China, Malaysia, New Zealand. and North America.
Asked if the alliance with BYD would create additional jobs at Alexander Dennis, the company spokesman said: “No, but it will help us underpin the future. There will be a long transition period, maybe 10 to 15 years, before we move to emission-free buses entirely, so it is important that we consolidate our leadership in key markets, continue to extend our global footprint and stay at the front of the technology race. This deal helps us achieve all of these objectives.”
Mr Robertson said: “The combined strengths of BYD and ADL [Alexander Dennis Limited] create a powerful new alliance, and I look forward to our business relationship flourishing in the years ahead. It is a fine example of British-Chinese co-operation and two innovative companies working together to create cleaner, greener transport solutions.
“It is also important to recognise that it is initiatives like this that help us support 2,500 ADL jobs, and a further 1,500 in our build partnerships around the world.”
Wang Chuan-fu, founding chairman of BYD, said: “Working with top industry partners such as ADL will enable us to speed up acceptance of our vision for fully-electrified public transport systems that can make a major contribution towards the clean air challenges facing cities around the world.
“ADL’s know-how and local market experience in the UK, combined with their global expertise in the double-deck sector and our class-leading knowledge of electric technology, creates the perfect platform to jointly develop a range of cost-effective, emission-free vehicles to suit every requirement.”
In 2008, US billionaire Warren Buffett invested $232m to take a 9.89 per cent stake in BYD.
Alexander Dennis revealed recently that it was on track for a 20 per cent rise in turnover in 2015 to a record £600m. And it is understood that its underlying operating profits for 2015 could come in at around £25m, up from £18.7m in the year to December 2014.
Stagecoach co-founder Sir Brian Souter’s Highland Global Transport investment vehicle has a stake of about 55 per cent in Alexander Dennis. Edinburgh merchant bank Noble Grossart has a holding of around 35 per cent, with Mr Robertson owning around 10 per cent.
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