Thinking about what is happening in the Livery industry and why it is happening may help us in making large financial decisions.

Over the last several years, Limo Buses have really taken hold of the 10 + PAK carriage of passengers for large events such as proms, conventions and other venues. In the late [...]]]>

Thinking about what is happening in the Livery industry and why it is happening may help us in making large financial decisions.

Over the last several years, Limo Buses have really taken hold of the 10 + PAK carriage of passengers for large events such as proms, conventions and other venues. In the late 1990s and from 2000 up till 2005, large SUVs became in vogue for 10+ passengers. SUVs continue to remain popular but all you have to do is to go to a Limo Show, star of the show is the Limo Bus.

Why the popularity? I think the increased popularity of Limo Bus carriage since 2005 has to do with the following (not in any particular order):

1) Public’s resentment regarding the fuel consumption of SUVs such as the H2.
2) The experience riding in a Limo Bus is different than being in a Limousine or a stretch SUV.
3) Most Limo Buses are exempt from local authority in most areas. These coaches come under the auspices of the D.O.T.
4) Up to just under GVW 25,000 pounds you don’t need a CDL license to drive these buses in many areas.
5) Limo Buses typically have heavier duty frames, suspensions, which mean kinder ride and a longer usefully lives.
6) You can fit more people in larger Limo Buses. The largest stretch SUV hold up 24 passengers compare this to the largest Limo Buses that can hold up to around 52 passengers.

Let’s take a look at these reasons.

1) Public resentment regarding SUVs became apparent with the spike in oil prices that we have experienced since 2000 when gas was at 1.50 a gallon. In 2003/ 2004 we had a depression brought on by the burst in the Internet bubble and also around this point we got involved in the war in Iraqi. Big gas guzzling vehicle were suddenly no longer in vogue. Even Arnold Schwarzenegger, as the Governor of California, had to sell off his prized fleet of Hummers (to the tune of $850K). Limo Buses are high occupancy vehicles; manufacturers making them ‘greener’ (as are limousines) and there does not seem to be similar resentment at this platform level.

2) The experience in taking a Limo Bus is different then the experience in riding in a large stretch SUV. Beyond all kinds of apparatus that you can put in a Limo Bus versus an SUV, I think the big difference lies in how the passengers can interact. In a long stretch H2 or Escalade when you are sitting in the front of the SUV you can forget about having a conversation with people at the other end, unless you are the boss and your employees are aboard. The Limo Bus on the other hand has a wide isle, and with interior heights in the 6.5’ range, which makes moving around inside these buses easier and this enables greater interaction for all riders.

3) Limousine Operators in many areas have to purchase permits to operate in many public venues such as airports, ports or even in downtown areas. Places like downtown Chicago where only QVM vehicles can get permits to operate. The local authorities levy fees, fines for non-conforming coaches/operators and they determine which coaches are acceptable or not acceptable for the area under their control.

Limo Buses are subject to D.O.T. regulations. These buses can service Ports of all kinds with no permits required (at least around the South Florida market). The D.O.T sets rules for the entire country. Trucks, Motorcoach Lines and others are also under D.O.T. control. They have a separate inspection process and D.O.T. inspections are required for coaches that hold over so many passengers. It varies according to the area where you are located. The D.O.T. enforces its rules differently from area to area. New York City, New Jersey’s D.O.Ts are notoriously tough and appear to getting tougher, especially on Limousine companies. The D.O.T also tells you whether you have to have a direct access to the passenger compartment of the Limo Bus, which is spectacularly important to know, if you are looking for a Limo Bus in some areas..

4) Many areas allow drivers who do not have Commercial Driver’s Licenses to operate truck and other vehicles with Gross Vehicle Weight under 25,000 pounds which covers most Limo Buses on the market. These areas typically require that the Driver has “Passenger Endorsement”, which is a written test down in Florida, and that means it is not that hard to get.

5) Many operators operate their Limo Buses once a week on the weekend, depending on the time of year and how aggressively the operator is in the market. A Limo Bus that is putting 20,000 miles per year is very common. Operators that are planning to put on more miles, depending on the size of the platform, may need to go up one chassis size (such as going from an E450 to an F550). The conventional wisdom is that if you are going to put a lot of miles on a Limo Bus buy the Diesel, which works except for some real problematic Diesel Motors that are on the market.

Diesel motors for Limo Buses generally make better sense than Gas motors; there are of course some exceptions to this. Diesel motors are built to heavier specs than most gas motors, which typically leads to a longer useful life for a Diesel. The Limo Bus typically has to idle for long periods which use up a lot gas, and strains the motor. Diesels can idle for long periods with little gas use. The operator who only plans to put 20,000 miles a year on its coach may want to look at the difference in cost between gas & diesel in terms of the cost of the coach. A gas coach may cost a lot less than the same coach with a diesel motor and you can buy a lot of diesel with $10,000.00.

All motors have issues. When you are purchasing you should check out what the possible issues are prior to purchasing the Bus, ask the operator if he experienced any of these issues and find out how the owner may have handled these issues. Have problem areas, like the welds that attach the body of the coach on to the chassis rails, should be checked for cracking.

How you plan to use the bus should determine which platform you should purchase. For instance, if you know that the Bus will be only going out on weekends and you will be only putting a 300 to 500 miles per week on the bus, then a light weight Ford/Chevy Chassis will work, you don’t need an F650\750, International or Freightliner chassis. If you plan to put a lot of miles on the coach then these larger chassis may make sense.

6) Up until fairly recently, there have not been many Mid-Size Limo Buses on the market. By Mid-Size, I mean Limo Buses that will hold over 32 passengers. Krystal’s KK38 was typically the largest size Limo Bus available which is rated at 28/30 passengers (in California). Now you can purchase a good variety of Mid-Size Limo Buses. The cost of the Bus typically rises as the passenger capacity rises. New Limo Bus builders have entered the market and Coach Builder’s can purchase Commercial Buses with chassis and shell constructed to their specs and then fit them out. You can find Limo Buses made on General Coach of America Frames, Gaval, Champion and others. National Builders like Krystal, Tiffany, Ameritrans, Turtletop and others. There are also some good regional builders such as LimoLube in Chicago.

Why does an “online video” go viral? All of a sudden a person, pet, or other object becomes the object of mass fascination. Why instantaneous sensations? Maybe it is timing, or meeting some critical mass of viewers, or perhaps these icons embody some deep need in our society.

These icons [...]]]>

Why does an “online video” go viral? All of a sudden a person, pet, or other object becomes the object of mass fascination. Why instantaneous sensations? Maybe it is timing, or meeting some critical mass of viewers, or perhaps these icons embody some deep need in our society.

These icons tap into the deeper currents that always flow through our culture and society. The iPhone phenomena for example: One man’s vision to combine a phone with a computer created almost an unbelievable sensation. It tapped into our collective need for communication, knowledge and adventure. The world will never be the same.

There are other smart phones, some of them with unique features that surpass the iPhone, but it is the iPhone brand that has captured the hearts and minds of the world. This is a case where the shear utility of device combined with its uniqueness lifted it to the status of a must have item almost immediately.

While the Hummer can’t come close to causing the stir as the iPhone did, the Hummer in its own way, has messed with our psyche.

The Hummer started out as the military’s replacement vehicle for the Jeep. It was Arnold Schwarzenegger who saw the HUMVEE and decided he wanted one. Schwarzenegger had finished Terminator 2 in 1991. At the height of his prominence as an action hero, he decided that this was his car… “Look at those deltoids; look at those calves”, Arnold’s comment upon having the first Hummer produced for civilian use in 1992. This whole story of how one man convinced a large military manufacture to build a one-off, a custom build of the HUMVEE captured the Nations imagination and he went on to become an even greater public figure. In his third year as “Governator” he decided he needed to get “Green”, so he sold off his entire fleet of Hummers ($950K).

GM purchased the Hummer in 1999, it produced the first H2s. GM produced three models: H1, H2 and H3. The H1 was built up until 2006, the H2 last model year was 2009.

The public’s reaction to the hummer was very interesting. While it had amazing appeal initially, as time went on, the public and even the man who made it all possible had apparent issues with the machine. It had nothing to do with the machine itself, but with fuel consumption. The Hummer was perceived to be wastefully at odds with American’s desire to rid itself of its reliance on overseas oil. The public perception for this vehicle changed… instead of seeing Arnold, the Terminator in the H2… many now saw an arrogant, wasteful, money-grubbing individuals who apparently had no concern for how much fuel their huge vehicle was consuming. Sales of Hummers dropped from 33,000 units in 2005 to just over 6,000 in 2008!!

All of that probably would not have made a difference to the Limousine industry except that the Hummer is one of the few (Excursion is another) SUVs that actually make a great stretched Limousine on the basis of mechanical and structural integrity. Much of that has to do with the frame size of the H2. (Please note, in my opinion the H3 does not make a good long stretch machine, certainly not at 200 or more inches)

The demise of the H2 in 2009 was not all that unexpected, with GM facing extinction and the increasing pressure to trim expense, to cull slower selling items, GM tried to sell and then decided to shelf the brand.

This left the Limousine market in an awkward position. There are very few other SUVs that can actually handle a longer 200” stretch. The Escalade, Navigator, Expedition, other SUVs not quite as popular as these include the Yukon, Yukon-Denali, Accolade, Suburban and so on.

The really nice thing about the H2 is that it is the same body style from start to finish in 2009. The Hummer as a limousine still fascinates people in a good way. Hummer limousine combines that sense of an aggressive Terminator machine with the feeling you get from being chauffeured in a 20 passenger limousine. The ‘standard stretch’ 200 inch H2 will hold between 16 & 22 people depending on the way the seating is configured.

As long as customers keep calling asking for a Hummers, livery operators will buy them. The market for the stretch Hummers is still strong and it may be getting stronger. It is difficult to find H2s that are in good condition and that are priced right. The market demand drives the price and the price of H2 on the market has risen over the last 6 months.

The best looking H2s I think are made by Tiffany, Krystal, Royale by Victor, Las Vegas CoachWorks, Legendary, some by Coastal, American Limousine. There are also some regional custom builders that do a great job with these vehicles. From my vantage point, I see basically two interior designs: 1) Wrap around seating, which look spacious and comfortable but hold a few less passenger then 2) Bench seating, which can fit more passengers but these can also be cramped.

Of course the interiors of these vehicles can have all types of configurations and options, from stainless steel headliners to raised roofs and lower floors, disco floors and ceilings, fireplaces, laser shows, large flat screen TVs, smoke machines, karaoke, stereo systems with enough power to lobotomize the occupants.

The raised roof and lower floor are great options for the H2, it opens up the interior space, the above is a 2008 H2 built by American Custom Coach, it has 55,000 miles and is being offered at $75,000.

Other cool options include jet doors, dually, and active extra axles. Some of these options are costly and it is easy to push up the price on an H2 way over $100K. Of course there are also 04/05 and 06 coaches out there that are priced less than $60K, less then the price of many luxury cars on the market.

The 200” H2 is more than a ride, it is a luxurious fascination with an aggressive exterior and tremendous interiors.

August of 2011 marked the end of production of Ford’s Lincoln Town Car, a fact bemoaned by most limousine operators. The Lincoln Town Car had basically taken over the Livery based limousine market (but not the Funeral Market) for many good reasons.

The Ford Motor Company and General [...]]]>

Cadillac XTS Limo in 2tone

August of 2011 marked the end of production of Ford’s Lincoln Town Car, a fact bemoaned by most limousine operators. The Lincoln Town Car had basically taken over the Livery based limousine market (but not the Funeral Market) for many good reasons.

The Ford Motor Company and General Motors each work closely with the Livery and Funeral industry. These manufacturers produce “shells” or “program cars” that only specially qualified Coach Builders can purchase. These Builders have to go to Ford or GM or both to get qualified under their programs; Ford’s program is called the Quality Vehicle Manufacturer (QVM) program, and GM calls its, the Certified Master Coachbuilder (CMC) program. Ford and GM have done all the engineering for stretch vehicles and they have set all the guidelines Coachbuilders must follow to be qualified under their warranty programs. Only QVM and CMC built vehicles can be exported to Canada.

Ford warranties QVM and CMC built cars for 4 years or 150,000 miles and GM warranty its program vehicles for 3 years or 150,000 miles… these warranties are transferrable for livery/funeral operators. Notice that Chrysler is not included, Chrysler up until now has not been interested in participating in this program with the Livery or Funeral industry. Also note that not all Ford/GM vehicles are certifiable under the warranty program. For example H2s, Escalades and other vehicles are not included. Any stretch over 140” do not qualify under these programs.

Program cars are built on the same chassis as their related consumer cars, but both Ford & GM reinforce these chassis, they add what is sometimes referred to as the limo package, which includes beefed up suspension, alternator, oil cooling systems, braking system and other changes designed to improve the performance and the durability of these coaches. These program cars have all the electrical set up so all the limousine builder has to do is cut the Shell, extend the body and run the electrical through a board and then to the rear of the vehicle, and finish off the interior.

Cadillac lost its dominant position in the Livery Industry to Lincoln in the early 1990s. The majority of operators found that they liked the rear wheel drive Lincoln’s better than the front wheel drive Cadillac’s. Cadillac remained (and remains) dominant in the Funeral Industry primarily due to lack of mileage generally put on Funeral coaches. The front wheel drive Cadillac arguably looks better than the Lincoln, but when it comes to operation, Lincoln lasts. Cadillac require more care and attention, they have very regular issues such as motor mount failure, and valve cover gasket failures. While you can easily find Lincoln Limos with 300,000 to 400,000 miles in good condition, at these mileages most Caddys are in the scrap yard. GM parts also cost more than the same Ford equal parts.

Lincoln Town Car and Cadillac’s DTS

The collapse of GM, the near collapse of Ford, increasingly stiff federal fleet mileage requirements, and dwindling sales forced both Ford and GM to rethink their luxury car line up. The Lincoln Town Car and Cadillac’s DTS are no longer being produced. The new Lincoln Limousine is based on the MKT frame and utilizes a V6 motor. Cadillac’s indicates that its DTS replacement the XTS (same frame as Lacrosse) due out sometime latter this year will also have a V6 motor. Ford and GM need to compete worldwide in the luxury car market where their main competitors are Mercedes, BMW and maybe Lexus.

Lincoln’s MKT is a crossover vehicle, an SUV that drives like a car. Cadillac’s XTS resembles the CTS, which is selling well both here and abroad. The Limousine/Funeral industry represent only a very small fraction of these manufactures sales. Their presence in the Livery/Funeral industry market is (apparently) both traditional and due to the prestige and high visibility associated with vehicles in these industries. Basically, the Livery and the Funeral industry has to take whatever Lincoln and Cadillac has to give them.

The new Lincoln MKT Limousine was just shown at LCT’s (picture to left above) Vegas Limousine Convention. This coach is shorter and narrower than the Town Car, it has the V6 motor versus the Town Cars’ V8 and the MKT is a hatch back. A friend of mine drove one of the new models to the Convention, he indicated he was surprised by how well it drives, he indicated that it has plenty of power, head room, but not as much leg room and luggage capacity as the Town Car. Many individuals do not like the split waterfall grill, sort of like a Cheshire cat with a middle tooth gap-look about it.

Cadillac has not, to best of my knowledge, finalized its XTS car, although there are some purported views online. Cadillac has indicated that the maximum CMC stretch for this vehicle is 80”! Cadillac has basically told the Livery Industry that it’s is trying to retain its dominant position in the Funeral Industry. Unlike the fat cat look of the Lincoln, the Caddy looks very sharp, stylistically way ahead of Lincoln. It remains to seen how this will translate into a stretch limousine since the XTS is smaller than the DTS. Caddy is reported to want to bring out a rear wheel version of the XTS with a bigger motor in 2015.

Meanwhile, the new Lincoln Hearse on the MKT chassis is a hit in the funeral industry. The only problem is that there are not enough chassis available to fill the orders and many dealerships are indicating long waiting periods.

It remains to be seen how these cars will play out in the marketplace. Ford/Lincoln has a new concept grill for the MKZ, which may be the same grill to end up on the MKT. This design is interesting; Lincoln keeps straight lines and then bends the nose and grill to give the car some curvy, European lines.

Ford Lincoln MKZ