Global Bus Market – A Key Determinant to the Global Mass Transit System

Global Bus Market – A Key Determinant to the Global Mass Transit System

By Knowledge Sourcing Intelligence Blog

In all societies across the world public transport is a matter of paramount importance. Out of all land-based transport, the bus is the most patronized mode of passenger mobility. Nevertheless, in contrast with railways (both light and heavy) it at times loses out on the appeal despite its capability to offer sustainable means of accessibility and mobility. Further in many countries (both developed and developing) retaining the patronage of public transport in general and particularly that of the bus. The countries that are rapidly transitioning towards a high level of economic efficiency and are marked by increasing aspirations and the capability to own and use an automobile, it would emerge as a growing challenge and is expected to impact the prospects of all kinds of land-based public transport particularly that subsumed under the majority of regional and urban travel.

bus market

There has been a considerable change over the past few years as far as the provisioning of route bus services in quite a few countries. Until the 1970s the provision typically comprised private players which is a common practice in developing countries, after which it was exclusively provided by the public sector. However, the 1980s marked a significant shift to the private sector which was in large part due to the felt need of minimizing the expenses from public funds, create provisions for private sector innovation which was perceived to enhance customer services and contribute to further cost reduction. Moreover, in developed countries there increasing attention has been paid to the creation of a completive environment. This would not only increase the patronage by delivering enhanced passenger transport services but also minimize the amount of subsidy paid from the government purse to both public and private operators. Competitive tendering or CT was the instrument that has been implemented for the achiever of rights of provisioning of services in most of the locations where the competition was deemed fit. The eagerness for delivery of route bust services by private operators through CT has been diverse among countries. In mainland Europe, negotiated contracts were prevalent with certain exceptions Viz. the Netherlands, Sweden, and Norway. On the other hand, the presence of the private sector in the provisioning of bus service has always been the practice in Australia, and during the 1990s initially in Adelaide and Perth through tendering out of services, the functions of the private sector were increased. Later there was a shift from negotiated contract to CT in Sydney that was only applicable to private operators to protect the comparatively less efficient public operators. However, in 2018 comprising an element of demand-responsive services for the first time, a private operator won the right to deliver services. Thus, such initiatives by the national governments underscore the instrumentality of contracting that has been beneficial passenger transport sector, thus to a certain extent the global bust market.

With the growing development in autonomous vehicles, the global bus market growth is expected to be further challenged. Further, gradual incapability of public transport systems to respond to the evolving needs of the market and the inherent attributes of flexibility and convenience that is offered by car have effectuated in the loss of market share, particularly in large metropolitan areas of certain western cities even though there have been certain promising signs of revival in certain cities. Further, the present market profile is marked with the preponderance of certain noteworthy features which are (a) greater complexity of activities carried out in the daily life cycle, (b) increasing wealth and the growing availability of attractive credit facilities from banks, among others and (c) the flexibility offered by alternative forms of transport (and non-transport responses such as telecommuting). These are influential agents of change that push conventional regular fixed-route public transport even further away depriving it the chance of catering to the mainstream demands of everyday passengers.

Nevertheless, there have been a few indications that suggest an increasing use of public transport, even though modal shares are being impacted due to quite a few reasons which are inclusive of but not limited to train journeys which are destined to lower-priced residential locations and take relatively longer hours. However, the consequence of the aforesaid on the overall transport task is usually of minor significance. Additionally, in a growing number of developing economies as well as in developed economies, rail transport and motorized urban public bus transport is a niche market provider and appears to remain that way over the not-so-distant period. This possibility is despite the facilitation by the greater and increasing availability of digitally supported technology of new vistas to provide better information to the public about the scope of service offered by public transport. The role which is expected to be played by the bus during the coming years as well as in the multi-modal developments which are related to Mobility as a Service (MaaS) is somewhat indeterminate, despite the growing perception that a MaaS sans public transport at its center will increasingly become car-based which wouldn’t lead to an ideal environment. Thus, in view of the diverse needs of customers that encompass both latent and real needs and the kinds of services which are made available to the via public transport offerings that are capable of capturing certain passenger markets, the bus, among others is an instrumental mode of public transport.

Therefore, there are quite a few aspects that are beneficial for the automotive industry as a whole and the potential to drive the global bus market growth which has been forecasted by Knowledge Sourcing Intelligence LLP to grow at a CAGR of 4.47% and attain a market value of US$66.780 billion by 2025 from the market value of US$51.355 billion that has been estimated for 2019. With the rapid rate of urbanization, an increasing number of commuters who travel to and from home to reach their fixed workplace, the bus market growth is augmented. Additionally, a growth in population which according to the medium-variant projection of the United Nations forecasts to reach 9.7 billion in 2050 from the 2019 estimates which are in the order of 7.7 billion is also anticipated to effectuate a healthy global bus market growth. In this regards the expanding population of school children is an attractive passenger market as well.  Further, the growing number of a variety of events that are being organized by event management companies necessitates the provision of pick-up and drop services for delegates, participants, and other stakeholders.