Vehicles

CHTC Bus Group Pursues U.S. Motorcoach Market

Martin Romjue
Posted on October 28, 2019

CHTC vice president Jack Wang with the companies leading model, a 56-passenger HT45. (photos by Martin Romjue/LCT)

CHTC vice president Jack Wang with the companies leading model, a 56-passenger HT45. (photos by Martin Romjue/LCT)

CHINO, Calif. — The newest entrant into the motorcoach industry is positioning itself as the maker of less expensive, practical new buses built mostly with U.S. and European parts.

CHTC Bus Group N.A. has expanded its facilities and support network so it can take on new customers across North America, says Jack Wang, vice president of the CHTC bus business unit, based in the city of Chino near Riverside, Calif.

“Everything here is about service because it’s our number one focus this year,” says Wang, whose office sits on the second floor of a sprawling commercial warehouse that houses the bus unit and related import-export business. The company has 40 employees in the U.S. and plans to hire more.

CHTC buses are finished and prepped for delivery at its North American headquarters and facility in Chino, Calif.

CHTC buses are finished and prepped for delivery at its North American headquarters and facility in Chino, Calif.

Global Sourcing

CHTC (China High Tech Corp.), headquartered in Beijing, China, is owned by a state-run government corporation, and its North American subsidiary is CHTC Bus Group N.A. The buses are all built in Nanchang, the capital and largest city of the Jiangxi Province in southeastern China.

The manufacturer joins a North American motorcoach market mostly defined by foreign-based builders: Van Hool (Belgium), Prevost (Quebec), Temsa (Turkey), and Irizar (Spain). U.S.-based motorcoach manufacturer MCI builds its buses in Winnipeg, Manitoba and Pembina, N.D. When you factor in global parts sourcing and factories in multiple nations, every big coach on the American road has some international roots.

CHTC, which entered the U.S. market in 2015, moved to its 110,000 square-foot Chino facility in Southern California in June 2018. It added a new service facility on a two-acre lot in Azusa on Oct. 1. Buses are prepped and readied for delivery at the Chino complex, where the company also keeps demos. As of September, CHTC had about 30 buses in stock on a lot five miles away in Pomona and more than 30 buses on the road.

Although CHTC motorcoaches are built in China, about 65% of the parts come from the U.S., 19% from Europe, and the chassis are built with Australian steel, Wang says. The lower labor costs enable the manufacturer to price its buses below those of competing North American and European brands.

Although CHTC motorcoaches are built in China, about 65% of the parts come from the U.S.

Although CHTC motorcoaches are built in China, about 65% of the parts come from the U.S.

Affordable New Buses

Like its competitors, CHTC offers a black-on-black coach model that appeals to luxury transportation operators. Its two models sold in the U.S., the HT45, 56-passenger coach, and the HT35 mid-sized coach, retail for $450,000 and $350,000. Cheaper Chinese assembly labor allows it to sell buses at lower prices in the U.S. Wang says CHTC is the only Chinese motorcoach manufacturer in the U.S. that has a significant market presence.

“Our bus is designed and engineered in a way that focuses on the user,” he says. “The bus fender will open all the way around, including along the front, giving you easy access within reach. Sometimes you eliminate the need for lifting the bus.”

CHTC buses, like competitors, are designed and built to last 10+ years/1 million+ miles, making them a long-term fleet investment, he adds. “We offer you a product with majority-made U.S. parts and we just do a good job of assembling them.”

Wang inside the HT45, which can include leather seats, woodgrain flooring, TV screens, ambient lighting, and other amenities associated with black-on-black luxury buses.

Wang inside the HT45, which can include leather seats, woodgrain flooring, TV screens, ambient lighting, and other amenities associated with black-on-black luxury buses.

Promoting A New Image

Two obstacles CHTC has faced in the U.S. market are concerns about tariffs on Chinese-built products and some misleading perceptions of Chinese buses, he says.

Wang emphasized despite a “Trump” tariff of 25% on each bus, CHTC so far is absorbing the costs and not passing it on to customers.

“We are taking a pretty good hit,” he says. “We hope it will cool down or go away. We are trying to grow our business and it’s not all about maximum profit.”

Another big challenge is battling the stereotype that a Chinese-built bus is cheap and inferior in quality, says Wang, who grew up in Dallas, Texas.

“Changing one's perception is possible, but it takes a lot of effort and trial. The first thing I told my team members is ‘we will not fail.’ We continue to go out there and have people try our product, and most of the time we get positive feedback. Throughout the demo, they get to know the bus.” Test customers have complimented the bus on, for example, how it climbs hills and its quick-cooling air-conditioning.

“But the perception we carry is a historical burden on the shoulder,” he says. “In earlier times, some private Chinese companies came over here and shipped a few inexpensive buses that didn’t come with available parts or good service. They just wanted to sell the bus, but we’re not like that. We're here to make sure we can produce high-quality components that are North American market ready. Then we put in the best service. And then we can talk about selling.”

CHTC maintenance trucks can travel to customer locations for emergency repairs. In addition to Southern California, the company has authorized maintenance partners in Dallas, Orlando, and Miami

CHTC maintenance trucks can travel to customer locations for emergency repairs. In addition to Southern California, the company has authorized maintenance partners in Dallas, Orlando, and Miami

U.S. Parts & Support

The diesel buses come with Allison transmissions and Cummins engines like many of their U.S. counterparts. The HT-45 uses the Cummins ISX 425, and then will be switched to the X12 on the 2020 model year. The HT-35 uses the Cummins ISL345 which is being updated to the L9. Both bus models have the B500R Allison transmission and German-built ZF suspension. Air conditioners are made by the Canadian company Valeo.

On the 2019 model, the compartment holding four batteries offers a slide-out tray for each one, making it easier and cheaper to replace a battery. With such redundancy, “it costs less in the long run when replacing them,” Wang says.

The company has authorized repair and maintenance partners in Dallas, Orlando, and Miami, since its clients so far are concentrated in California, Texas, and Florida. CHTC buses are commonly used for chartered resort casino transportation and line runs. Wang underscored the fact he and his staff are available to clients 24/7 on their cell phones. CHTC Bus Group is marketing consistently on social media and has an employee dedicated to the effort.

Moving into 2020, CHTC wants to focus on California and the West Coast for sales, especially in the nearby Los Angeles market.

“We feel like California is the most difficult state to run this business,” says Wang, citing the state's strict regulations and heavy taxes. “And if we can do a good job here, then we can simply duplicate that elsewhere. if you can do a good job sustaining your business and growing in this type of environment and atmosphere, you should be able to develop business in the other states.” One advantage for international importers like CHTC is its regional proximity to the Ports of Los Angeles and Long Beach.

“We could certainly come out with a cheaper bus, but then you would have to sacrifice quality. So that’s not our business model. Nine out of 10 people who try our bus like it and feel the price is very fair.”

CHTC Bus Group U.S. Timeline

  • 2015: Entered U.S. market; met D.O.T. requirements
  • 2016: Safety and road tests of motorcoaches
  • 2017: Started marketing and selling buses, with five sold
  • 2018: 23 buses sold; exhibited at industry trade shows
  • 2019: 33 buses on the road with plans to grow market share; added new facility
  • 2020: Returning to International LCT Show, Feb. 16-19

Related Topics: bus manufacturers, CHTC Bus Group, motorcoach operators, motorcoaches, new vehicles

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