Raba Rt of Hungary has won its first certificate to supply major parts directly for buses built in USA, gaining approval to sell axles there to NABI Rt, Raba told just-auto.com today.
“This is another milestone in cultivating an independent identity for our products in the world’s most important market,” Istvan Pinter, Raba deputy chief executive, said.
Raba is the biggest exporter to America among Hungarian manufacturers with accumulated sales there of $1.5bn since 1974. It already has shipped axles to USA for: farm vehicles from Fiat SpA’s CNH Global NV and Deere & Co; trolleys from Skoda (Plzen) as; and trucks from Marmon Group Inc. The Hungarian company also delivers axles and components to US axle makers ArvinMeritor Inc and Dana Corp.
NABI, whose full name is North American Bus Industries, recently qualified Raba’s front and rear axles as options in future sales of its heavy-duty buses to public transit authorities in USA.
“These axles are special,” Andras Racz, NABI chief executive, said. “They feature disc brakes, and the front is a drop axle. We tested them, and the performance was excellent.”
NABI, headquartered in Budapest, expects its US sales of heavy-duty buses to rise from 600 in 2000 to at least 800 in 2001, Racz said, noting customers have options to buy an additional 3,200 before 2005. ArvinMeritor now supplies all axles, and the busmaker wants a second source, but Raba faces regulatory hurdles, he added.
When US cities and counties buy buses, federal law caps the foreign portion of the value of the vehicles at 40%, while requiring key parts like axles to be assembled in America.
“We hope these restrictions will be waived,” Racz said. “But they are political issues, and they may take time to change. I would not want to make any predictions, but we hope we can achieve these changes, especially over the location of axle assembly.”
NABI, whose main market is America, makes in Hungary integrated bus bodies that are completed at its plant in Anniston, Alabama, USA. The company would like to fit Raba axles onto the bodies in Hungary, Racz said. But the axles may need to be shipped to USA separately in kits for final assembly there – to satisfy US rules, he added.
The certification could spark opportunities for Raba to supply axles to other busmakers in USA, where the company’s exports totalled $74.4m in 1999 and $69.6m in 2000.
“The prospects for our bus axles in America look good,” Miklos Saghy, Raba director of business development for axles, said. “During NABI’s tests, our axles required no unscheduled maintenance stops.”
NABI would be a breakthrough customer for Raba: the busmaker ranked third in US sales of heavy-duty buses with an estimated market share of 12.5% in 2000, Racz said.
Raba, based 120km west of Budapest in Gyor, separately said it expected a new order from USA in first-quarter 2001, but it specified no details about the potential deal, according to a dispatch by Bloomberg, reported in Budapest Business Journal (5-11 February 2001).
First Hungary Fund Ltd of Jersey in UK Channel Islands, owner of 54.15% of NABI, held 10% of Raba from 1997 to 2000.
Raba’s biggest shareholders now include: Gyor municipality (10.98%); Malaysian conglomerate DRB-Hicom Group (10.37%); European Bank for Reconstruction and Development or EBRD (10.37%); Raba’s treasury (10%); Hungarian textile maker Graboplast Rt (8.24%); and Menedzsment Befektetesi Kft or Management Investment Ltd (4.39%). No other owners hold over 4%. The remaining shares have been floated on Budapest Stock Exchange.
Raba works mainly in the commercial-vehicles world, supplying axles plus chassis and engines for agricultural vehicles, buses and trucks. Based usually on licenses, the company makes small volumes of buses, military and special vehicles, tractors and trucks. Axles are the forte, and Raba is the fourth-largest producer of them for heavy vehicles, among independent manufacturers (behind ArvinMeritor, Dana and ZF Friedrichshafen AG of Germany).
The company’s full name is Raba Magyar Vagon -es Gepgyar Rt (Raba Hungarian Carriage and Machine Factory PLC).
Read a feature about Raba here.
F +36-1 / 317-7257
T +36-1 / 266-2693
To view related research reports, please follow the links below:-