I don't want to sit with my friend on the bus
Why are you trying to avoid sitting with your friend?
He smells, I don't even want to look at him
That sucks!  I think it's fine for you to want to avoid him if he smells that bad.  However, you should also try mentioning it to him so he works on improving his hygiene.
What's the point of caring? My other friend already avoids him and I think that's okay.
Letting them know about this would definitely help them out, people may have never said anything to him. If he has this knowledge he to work on his personal hygiene and this would no longer be an issue potentially.