Alexander Dennis urges UK and Scottish governments to back domestic bus manufacturing
Alexander Dennis says the Scottish Government's cancellation of an extra £40 million of ScotZEB2 bus funding created an order shortfall that forced it to end bus body manufacturing in Scotland.
- £40 million
- £4.1 million
- 26 weeks
- 80%
What Happened
Alexander Dennis, a subsidiary of NFI Group Inc., says it has responded to a Ministerial Statement about the Scottish Government's furlough support scheme because the statement does not fully reflect the circumstances that led to changes at its Scottish manufacturing operations. In June 2025 the company announced plans to cease bus manufacturing at its Falkirk and Larbert facilities in Scotland, in response to falling demand and intense international competition. It says any inference that there was a pre-determined plan to close operations is totally incorrect, and that its actions show it was focused on the long-term viability of its Scottish operations.
Alexander Dennis announces plans to cease bus manufacturing at its Falkirk and Larbert facilities in Scotland, citing falling demand and intense international competition.
After the Scottish Government announces an additional £40 million of ScotZEB2 funding, Alexander Dennis agrees to a 26-week furlough scheme intended to cover 80% of affected staff wages until expected orders entered production in 2026.
Alexander Dennis outlines to the Deputy First Minister its options for maintaining viable bus production in Scotland, including in-sourcing chassis production.
The ScotZEB3 outcome is announced: more than half of the buses are awarded to overseas manufacturers, and Alexander Dennis has still received no new bus orders from the process.
Alexander Dennis launches a consultation on moving to chassis assembly as the only commercially viable option for its Scottish operations and invests millions of pounds transforming Larbert, on top of significant investments made at the site in 2023.
- Additional £40 million of Scottish Government funding, which the company expected would deliver a significant volume of new bus orders
- Replaced the cancelled funding extension; more than half of the buses awarded to overseas manufacturers, and Alexander Dennis has yet to receive any new bus orders from it
- A 26-week scheme agreed on the expected ScotZEB2 order pipeline, designed to support employees' wages until those orders entered production in 2026
£4.1 million
Alexander Dennis says the costs it bore to protect jobs and skills significantly exceed this amount.
“Any fair assessment of the situation will recognise that the withdrawal of the additional ScotZEB2 funding created an orderbook shortfall that ultimately led to our move to adapt Larbert to a chassis manufacturing facility.”
- Invested millions of pounds transforming Larbert, on top of significant investments made at the site in 2023, to safeguard skilled jobs and manufacturing capability in Scotland.
- Retained the ability to return to full bus body manufacturing if future demand supports it.
- Is currently producing high-quality bus chassis in a state-of-the-art facility.
- Calls on both the Scottish and UK governments to create a long-term pipeline of bus orders supporting domestic manufacturing, skilled jobs and economic growth.
- Says it remains ready and able to grow back its Scottish manufacturing operation with sufficient demand.
“Today, Scotland's only domestic bus manufacturer has spare capacity while Scottish taxpayers' money continues to subsidise buses built overseas.”
Previously from Alexander Dennis
Our recent coverage shows Alexander Dennis continuing to supply buses in Scotland: in August 2026, Scottish operator Watermill Coaches took its third Enviro200 from stock for a new local service contract. The company also plans to show its next-generation Enviro200EV, around two tonnes lighter than similar buses, alongside its Enviro400 at Euro Bus Expo 2026.
- Scottish operator Watermill Coaches takes third Alexander Dennis Enviro200 from stock
- Alexander Dennis to show next-generation Enviro200EV and Enviro400 at Euro Bus Expo 2026
Background drawn from MotorClaw's earlier coverage of Alexander Dennis's official releases.
Why this matters
The dispute matters to workers and suppliers connected to what the company calls Scotland's only domestic bus manufacturer, and to taxpayers whose money funds the ScotZEB programmes. Alexander Dennis says public funding decisions determine whether bus orders support domestic manufacturing or go overseas, and warns that without a long-term order pipeline it cannot invest in Scottish production.
Terms in This Story
- ScotZEB2 and ScotZEB3
- Scottish Government bus funding programmes run as competitions in which bus orders are awarded.
- furlough scheme
- A temporary employment-support arrangement in which staff stay on the payroll with part of their wages covered while work is reduced.
- chassis
- The structural frame and mechanical underpinnings of a bus, separate from the body that is built on top of it.
- zero-emission buses
- Buses that produce no tailpipe emissions while running.
Summarised from the linked release; details can be imperfect — always verify against the original source.