Alexander Dennis drives off with £44m Mexican bus deal

A bus factory in Falkirk will help build 90 double deckers for export to Mexico as part of a £44 million deal.

The contract will support 1,000 existing jobs at the Alexander Dennis plant in Falkirk. Picture: Andrew Milligan/PA Wire
The contract will support 1,000 existing jobs at the Alexander Dennis plant in Falkirk. Picture: Andrew Milligan/PA Wire

The Alexander Dennis plant will construct the bodies of 90 low-emission buses and the chassis will be made at firm’s base in Guildford, Surrey, before the vehicles are shipped to Mexico City to cut congestion and pollution on the historic Paseo de la Reforma.

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The £44m contract, which supports 1,000 existing jobs at the Falkirk site, was secured after the UK government stepped in to ensure the private buyer could access finance to purchase the buses.

UK Export Finance, part of the UK government’s Department for International Trade, provided a buyer credit guarantee on a loan form Santander to the buyer, a private Mexican firm operating a route for the City of Mexico’s bus system.

The new buses are lightweight, fuel-efficient and have double the seats of those currently used and will be on the road from the end of the year.

Alexander Dennis is one of nine Scottish-based companies that have received a combined £85m of the £1.7 billion UK Export Finance has given in financial backing since it was created last summer.

UK international trade secretary Liam Fox said the department was “putting export finance at the heart of trade promotion”.

He said: “The £1.7bn in financial support since last summer has helped 137 companies secure deals around the world, in 40 local currencies including the Mexican Peso. This has made buying from the UK and Scotland more attractive than ever.

“There is global appetite for British goods and expertise, and Scottish firms such as Alexander Dennis are taking advantage of the opportunities in fast-growing markets like Mexico, securing deals that will boost the UK’s exports and safeguard jobs back home.”

Alexander Dennis chief executive Colin Robertson added: “Our ability to offer finance from UK Export Finance in Mexican pesos was a significant benefit to our buyer, helping us win this major contract.”

Britain’s manufacturers have reported rising demand driven by a rebound in export orders on the back of a weak pound.

The latest CBI industrial trends survey showed that 30 per cent of manufacturers said their total order books were above normal in August, compared with 17 per cent that experienced lower levels over the same period, resulting in a balance of plus 13 per cent. That is above the long-run average of minus 14 per cent.

Figures were driven by stronger export order books, as a rounded balance of 11 per cent of manufacturers reported above-normal overseas demand in August, compared with 2 per cent in July.

Anna Leach, the CBI’s head of economic intelligence, said the Brexit-hit pound – which has made UK goods cheaper for overseas buyers – is to thank for the rise.

The poll also found that a balance of 19 per cent of manufacturers were expecting a rise in output prices over the next three months.