Inversionistas en Autotransportes Mexicanos S.A. de C.V.

completed

Bus travel is the prime means of public passenger transportation in Mexico, accounting for over 90% of the market. Passengers use bus travel for everyday activities such as transportation to and from work, as well as for longer distance business and leisure travel. As a result, Mexico's bus fleet is one of the largest in the world, with over 36,000 buses. Bus service is regulated by the Secretaria de Comunicaciones y Transportes (SCT), which establishes requirements for the five levels of service (Luxury through Feeder) in areas such as on-board amenities, maximum age limits for buses, emissions and safety equipment, and driver licensing and training. The IAMSA Group is one of the largest intercity bus operators in Mexico with 7,900 buses, representing 21.7% of total buses in the bus transportation market. The Group includes IAMSA, Flecha Amarilla and Grupo Toluca, as well as Omnibus de Mexico, an associated company. Collectively, the Group owns the youngest bus fleet in Mexico and transports one fifth of Mexico’s 2.1 billion passengers who use bus transport annually. The Group participates in all market segments, ranging from feeder service to luxury coaches, and serves 20 out of 32 Mexican states. The Group possesses the youngest fleet in the industry with an average age of 5.7 years, well below the industry average of 10 years. Renewal programs are planned carefully to ensure the maintenance of a low fleet age in order to cater to customer preferences and sensitivities, and to take advantage of cost efficiencies inherent in new technology. In 2002, the IAMSA Group launched its 2002-2005 fleet renewal program in order maintain a new and efficient bus fleet. The renewal program's acquisition of 1,985 buses will be allocated across the various service segments but the majority is for use in economy and feeder services. Through retirement of existing buses, overall fleet size will remain about the same; capacity and occupancy improvements will provide for additional business volume. Approximately 385 buses will be sourced from Marcopolo of Brazil; these will be financed in part by the IFC investment. Most of the remainder of the buses will be supplied by Volvo; financing for these buses was put in place in 2002. Delivery of the Marcopolo buses has recently begun and is expected to be completed by March 2004.