Going places

GeetanjaliShukla

Business Today, July 8, 2012

Executive Summary: In 2001, Volvo Buses India sold 20 coaches. By December

2011, 5,000 of them were running on Indian roads. Volvo did not
achieve this by toning down its products or cutting
prices as multinational companies often do. It
developed the market and waited for it to mature. Volvo
now has 76 per cent of the Indian luxury bus market. The
company changed the way Indians travel. Now, as the
competition closes in, it is preparing to launch
products that could transform the market - again.
A decade ago, buses were more or less a by-product of trucks. They were built on truck chassis. Body
builders bought chassis primarily from Telco (now Tata Motors) and Ashok Leyland. The difference
between city and inter-city buses, or regular and 'deluxe' ones, was reclining seats and a stylish paint job.
That is how things were when Volvo Buses entered India. The Swedish company bid for a tender by the
Delhi Transport Corporation (DTC) in 1998 while showcasing its B10LE low-entry city bus in several
cities. The bus drew much interest. AkashPassey, Senior VicePresidentregion international, Volvo Bus
Corporation, who headed India operations then, says many people came to see it at the 1998 Delhi Auto
Expo. He laughs, recalling an animated discussion between two youngsters he overheard. "The older of
the two, in an attempt to explain how the bus loses height, said: 'When it halts, the driver jumps out and
deflates the tyres'," he says.
The coach prompted more weighty concerns too: were India's roads and travellers ready for rearengine
buses? What about prices? Volvo city buses cost up to 10 times more than those used by state transport
corporations. Meanwhile, the DTC tender was shelved.
Selling to state companies was proving tough, so in 2000, Passey changed tack. He imported two Volvo
B7R inter-city buses from Hong Kong and Singapore, and sent them out on a six-month demonstration
drive. The B7R cost five times more than a 'deluxe' bus. But he persevered. "I felt there was little reason
why an airconditioned bus would not work in a tropical country like India," he says.
THE ROAD TO SUCCESS
CHANGE STRATEGY
Volvo brought in its inter-city bus when it saw the market was not ready for a city bus
SELL THE CONCEPT, NOT JUST THE PRODUCT
Volvo engaged with all stakeholders - from operators to passengers to drivers - to sell its buses
USE MACRO CHANGES TO YOUR ADVANTAGE
When Volvo saw that increasing congestion and growing environmental awareness were making
public transport attractive, it brought back the city bus
CHANGE THE GAME
When the competition started to close in on Volvo, it introduced products that would increase the

number of passengers
The changing economic landscape strengthened his resolve. The company approached private operators
who ran inter-city 'deluxe' buses and could price tickets higher. Volvo refused to compromise on product
specifications . Passey points out that inter-city buses are 12 metres long everywhere in the world.
Volvo departed from the industry norm by offering service support for the entire bus, and not just
parts"
But in India, bus length was capped at 11 metres. "We got the regulation changed," says Passey. It was a
good thing Volvo had a wide range of products. "All I had to do was choose the one best suited for India,"
he adds. "I did not choose the most sophisticated, because operators were used to frontengine buses, very
little suspension and ordinary brakes."
To persuade operators that Volvos were profitable, the sales team drew up a lifecycle cost comparison.
Volvos had a few more seats than others - a disadvantage in the early 2000s, when states taxed operators
per seat. But the biggest advantage was that they could run for 22 hours without maintenance.
Operators were concerned whether Volvo would provide maintenance centres every 25 km, as was the
usual practice. Passey says: "We told them you don't need that with a Volvo. We'll give you one every 400
km." Volvo also departed from the norm by offering service support for the entire bus, and not just
individual parts. With maintenance hassles reduced, operators could focus on routes. For example,
Mumbai-based Neeta Tours and Travels, which had 20 Volvos in 2004, figured it could serve seven
destinations. A bus could leave Ahmedabad at 10 p.m., reach Mumbai at 6 a.m., then go to Pune and back,
and then head back to Ahmedabad at 10 p.m. Operators could also focus on sprucing up service with hot
towels and entertainment. This also meant they could raise ticket prices by as much as Rs 100 on some
routes.
Phanindra Sama, founder and CEO of redBus, a portal that sells bus tickets, says, "The Volvo
phenomenon coincided with higher per capita income, more awareness about luxury, and increasing
migration to cities from Tier-II and Tier-III towns."As Volvos could run farther than buses used till then,
routes such as the 1,000-km Bangalore-Mumbai run became popular. Being faster, they could depart later
than a deluxe coach, yet arrive at the same time.
In 2001 - within a year of demonstrating the inter-city coach - Volvo sold 20 of them in India. That figure
reached 1,100 in 2006, and 5,000 by December 2011. Volvo now has 76 per cent of the luxury bus
market. The market itself, according to industry estimates, is growing at around 10 per cent a year. Volvo
expanded gradually, starting with South and West India. It was not until 2004 that it had a countrywide
presence. "It was of utmost importance to us to have service leading sales and not the other way round,"
says Passey.
Volvo stuck to its product specifications. It got India to change a regulation that capped bus length at 11
metres

Volvo also reached out to not only operators, but also other
stakeholders. It ran commercials in film theatres. Before launching the
B7R in 2001, it sought driver and passenger feedback. "We realised we
wouldn't sell much if we sold merely the product," says Passey. "We
had to sell the concept of luxury bus travel." Eventually, state bus
companies not only bought Volvos but also built brands around them:
Garuda in Andhra Pradesh, Shivneri in Maharashtra, Airawat in
Karnataka.
The development of expressways such as the Mumbai-Pune one helped things along. Volvo became a
ticket brand - something no other commercial vehicle has achieved anywhere in the world - as passengers
asked for Volvo tickets, rather than an operator or a route.
As with the inter-city coach, the success of the city bus was gradual. In January 2006, Volvo sold its first
city bus to the Bangalore Metropolitan Transport Corporation. Under the Jawaharlal Nehru National
Urban Renewal Mission, Volvos now ply in 13 cities.
Volvo hopes to make second-tier city connections viable, as traffi c is set to
grow in this segment
The company is again looking to change the market, especially with rivals such
as Mercedes-Benz and Tata Motors tail-gating it. Its 14.5-m inter-city bus is the
longest in India, with more space for passengers and luggage. Its 14.5-m multiaxle city bus is being pitched as a solution for urban traffic congestion. With the
9,100 medium-haul bus (for distances of 300 to 400 km), Volvo hopes to make
second-tier city connections viable, as traffic is set to grow in this segment.
This move - changing the market when the competition closes in - is possible because of a previous
strategic step. In 2008, Volvo started manufacturing buses near Bangalore. It makes 1,100 buses a year,
and hopes to raise production to 2,500 by 2013/14. Sama of red-Bus says: "The fact that Volvo
manufactures its own buses works to its advantage. Mercedes still depends on its body maker, Sutlej."
Would any other bus company, had it entered India in 2001, have done as well as Volvo? Perhaps, if its
product range was comparable, and if it were patient enough to develop the market. After all, one of the
crucial factors in Volvo's success in India is that it has invested in changing the circumstances.

--------------------------------------------------------------------------------------------------VECV January total sales up 13%

The company, a joint venture between Sweden's Volvo Group and Eicher Motors, said Eicher-branded
trucks and buses recorded total sales of 3,707 units in January compared with 3,262 units in the same
month last year, up 13.64 per cent.PTI | 01 February 2016, 6:46 PM IST
NEW DELHI: VE Commercial Vehicles on Monday reported a 13.59 per cent increase in total sales in
January at 3,768 units as against 3,317 units in the same month last year.

The company, a joint venture between Sweden's Volvo Group and Eicher Motors, said Eicher-branded
trucks and buses recorded total sales of 3,707 units in January compared with 3,262 units in the same
month last year, up 13.64 per cent.
In the domestic market, sales of Eicher trucks and buses stood at 3,415 units in January compared with
2,905 units in the year-ago month, a growth of 17.6 per cent, VECV said in a statement.
Exports of Eicher trucks and buses stood at 292 units in January as against 357 units in the same month
last year, down 18.2 per cent.
Volvo trucks recorded sales of 61 units in last month compared with 55 units in January 2015, up 10.9 per
cent, the company added.\

Competition in premium buses good for India, says Volvo Buses president,
by Kiran Bajad Aug 12, 2015

Hkan Agnevall, president, Volvo Buses: With our Asia Leverage strategy, we have had an ambition to export from
India.Volvo Buses, which has been present in India since CY2000, has over 4,000 buses plying across the country.

Growing demand for comfortable inter-city transportation in India over the past five years has seen
competition in the premium bus (costing upwards of Rs 80 lakh) market heat up. Largely catered to by
multinational players like Volvo, Scania and Mercedes-Benz, the segment seems to be gaining traction
after a sluggish couple of years.
Swedish manufacturer Volvo Buses, which has been present in India since CY2000, is a clear market
leader with over 4,000 buses plying across the country. Volvo, which has its bus manufacturing plant at
Hoskote near Bangalore, recently announced an investment of Rs 975 crore to enhance production
capacity.
More recently, Scania and Daimler Buses through their Indian manufacturing arms are looking to make
their presence felt through localised manufacture and cost efficiencies.
Volvo nevertheless is taking the competition very seriously. Speaking to Autocar Professional on his
recent India visit, Hkan Agnevall, president, Volvo Buses, said: I think competition is good. It will drive
us not to be complacent and help us continue to evolve and develop. Secondly, its good because it will
further promote the whole concept of high-quality buses which we think is good from the overall Indian
perspective.
Before Volvo drove into India with its modern coaches, the Indian bus market was dominated by frontengined buses built on truck chassis. Volvos modern, air-conditioned, fully built, rear-engined coaches on
a bus chassis helped transform the market and also gave the company a first-mover advantage.
Now, Volvo Buses has gone about achieving another first its Made-in-India coaches are being exported
to Europe which makes it the first company to do this. As it happens, export from India was part of Volvo
Buses global game-plan. Agnevall says, With our Asia Leverage strategy which we have in place
since 2011, we have had this ambition to export from India. Now we are mature enough and have a
production system with which we feel its feasible to use India as an export hub for Europe. I think we
have the right competence in India. These are not just products which have been developed solely in
India, these are global products with substantial engineering in Europe and India and the project has been
driven from India. Its a global design but manufactured in India. Leveraging our Indian footprint brings
us a very competitive solution.
SCANIA AND MERCEDES UP THE ANTE
Meanwhile, since early 2013, another Swedish bus maker Scania has also been in the fray with its allnew Scania Metrolink range of 12-, 13.7- and 14.5-metre buses aimed at meeting the growing need for
safer and comfortable travelling in India. While these buses were initially imported, the company has

opened a new bus plant at Narasapura near Bangalore in March this year. The Rs 300 crore facility has an
annual production capacity of 1,000 units. Scania has since then bagged orders from private operators in
India and also started deliveries of Metrolink buses to State Transport Undertakings.
Recognising the potential of the premium bus market in India, Daimler Buses recently began manufacture
of rear-engined buses under the Mercedes-Benz brand in Chennai. The company has invested Rs 424
crore at its Oragadam plant for the new bus manufacturing facility.
The company unveiled the first premium 15-metre bus in India in the coach segment on May this year,
Markus Villinger, managing director, Daimler Buses India told Autocar Professional, We will roll out the
15-metre Mercedes-Benz coach for the inter-city segment in September 2015. The Mercedes-Benz range
of buses would be equipped with Electronic Stability Program (ESP) and Electronic Braking System
(EBS).
Notwithstanding the competition from foreign players, home-grown commercial vehicle major Tata
Motors is also looking to grab a slice of this growing, low-volume but premium segment. The company
has unveiled prototype of its Magna front-engine, twin-axle, luxury AC coach. The company says it will
have several options at an affordable price for Indian luxury coach operators and plans to launch the bus
soon.
TATA MOTORS READIES THE 12-METRE MAGNA
Tata Marcopolo, a 51:49 JV between Tata Motors and Brazil-based Marcopolo, is all set to launch the
Magna, a super deluxe fully-built bus aimed at taking on the buses from Volvo, Scania and MercedesBenz. The prototype was showcased earlier this year at the companys plant in Dharwad, Karnataka.
The front engine, twin-axle luxury 44-seater AC coach will have several options at an affordable price
for Indian luxury coach operators who always look for cost-effective solutions.
The Magna is slated to go into production soon. In an earlier interaction with Autocar Professional,
Benedito Andre Almeida Violante, chief operating officer of Tata Marcopolo, the company has also
designed a sleeper coach on the same platform.
Violante said the buses will be manufactured for the domestic market as well as for export to the Middle
East market. The Magna, which will be the flagship product from Tata Marcopolo in the Indian luxury
bus market, will have more than 95 percent of local content and will meet all mandatory safety
regulations.
While the luxury coach buses will be produced at the companys Dharwad manufacturing facility in
Karnataka, the chassis will be supplied by Tatas Pune production plant
Giving a fillip to growth in the bus market is the governments focus on developing infrastructure and the
road network across the country which will serve to accelerate inter-city travel. Clearly, the premium bus
market in India is in for considerable action. Stay tuned.

Tata
Marcopolo to launch Magna luxury buses in India by Q3, FY2016
by Shourya Harwani Aug 31, 2015

The Magna two-axle bus will roll out first in two different sizes ICV class and MCV class.
While it is old news now that Tata Motors is developing luxury bases for long-haul routes in
India under its partnership with Brazils Marcopolo, the company has now said it will launch the
first batch of these buses in the Indian market in the October-December quarter.
Speaking to Autocar Professional, R Ramakrishnan, senior vice-president Product Strategy and
Planning and Customer Value Creation (Commercial Vehicle Business Unit), Tata Motors, said
that the automaker will launch its air-conditioned luxury segment offering christened the Magna,
with two- and three-axle options.
The Magna bus will be launched very soon. We have two-axle and three-axle options on this
platform. The three-axle bus is currently in development, and we will start with the two-axle
buses first. These will come in two different sizes to start with one is called the ICV class and
the other the MCV class. The three-axle buses are in the HCV class and will come a little later,
he said.
The luxury coaches will have a seating capacity of 30-50 passengers, with varying legroom and
space requirements, and will get various engine options. Tata Marcopolo will offer the ICV class
buses with 120-150hp motors, the MCV range with 150-230hp engines and the HCV class buses
with 230-280hp motors, Ramakrishnan said.
Different powertrains have been developed as we are trying to cater to a whole range of
customers in the Indian market. At the top end, these buses will be in the category of Volvo and
Mercedes-Benz luxury buses, while we will also supply to a lower price market as well, he
added.

With the ongoing improvement in road infrastructure in the country, demand for long-route
luxury buses has risen consierably. Currently, around 700-800 inter-city super luxury buses are
sold in India each year and Volvo is the dominant player here with a 50-60% share.
Other foreign CV makers like Scania and Mercedes-Benz also offer multi-axle rear engine buses
in the luxury coach segment for long-distance travel but come with a premium price tag.
Tata Marcopolos forthcoming luxury bus with its front engine, twin-axle option, can be used for
350km-700km runs and will be also be suitable for inter-city operations. The pricing is expected
to be very competitive, as Tata looks to capture this segment.
As reported earlier, the two-axle Magna will be 12,000mm long, 3,800mm tall and 2,600mm
wide. Keeping in mind the recent incidents of fire breakouts in luxury buses, the Magna is built
with a GI tubular structure and will come with fire retardant marine plywood and 12mm antiskid vinyl flooring.
While the luxury coach buses will be produced at the companys Dharwad manufacturing facility
in Karnataka, the chassis will be supplied by Tata Motors Pune production plant. Tata
Marcopolos Dharwad plant has a manufacturing capacity of 15,000 buses per annum with a
workforce of around 3,000 workers.
- See more at: http://www.autocarpro.in/news-national/tata-marcopolo-launch-magna-luxury-buses-india-q3-fy20169166#sthash.Ai0X2JXd.dpuf

Mahindra Jeeto aims to pip Tata Ace

Taking competitor Tata Motors' most successful commercial vehicle
Ace head on, Mahindra & Mahindra (M&M) has introduced the Jeeto
brand of light commercial vehicle (LCV) in eight variants to bite into
both the mini and micro truck pie that is dominated by the Ace
range.TNN | 26 June 2015, 8:40 AM IST
KOLKATA: Taking competitor Tata Motors' most
commercial vehicle Ace head on, Mahindra &
(M&M) has introduced the Jeeto brand of light
commercial vehicle (LCV) in eight variants to
both the mini and micro truck pie that is
dominated by the Ace range.

successful
Mahindra
bite into

Offering the 'choose wisely, earn more'

proposition to those in the last-mile
distribution business, including online retailers
Flipkart, Snapdeal and Amazon, Jeeto is available in
three carrier deck
lengths (5.5-6.5 ft), two powertrains (11hp and 16hp) in BS III and BS IV
variants, two payloads (600 kg and 700 kg). It offers a range that straddles
the entire micro and mini vehicle segment.
While the Tata Ace Zip has a monopoly in the micro-truck segment, other Ace
variants corner 80 percent share in the mini-truck category. M&M with its
earlier micro-truck offering Gio and three-wheeler Alfa had a marginal share.
It now hopes to change that radically with Jeeto.
"In the sub-3.5 tonne category that ranges from three-wheeler to pickup,
M&M has 43 percent marketshare. Most of it is due to the dominance of
Bolero Maxi Truck and Maximo in the pickup segment. With the introduction
of Jeeto, we will grab a share of the mini and micro truck segment, thereby
increasing the overall marketshare in SCVs," said M&M general manager
(sales east) Deepak Kapoor. Priced Rs 2.56-3.02 lakh for BS III and around Rs
16,000 additional for BS IV, it is priced Rs 3,000 more than Tata Motors'
micro-truck Ace Zip and over Rs 1 lakh less than Tata Ace HT. But apart from
competitive pricing, M&M is banking on its promise of higher mileage and
lower maintenance to emerge a winner.
The Jeeto range will be manufactured at the Zaheerabad plant in Telangana.
Of the 1.5 lakh units installed capacity, M&M plans to manufacture around
92,000 units of Jeeto. The company has spent around Rs 300 crore on
product development and production facility.Commercial passenger carrier
variants of the Jeeto will be launched later, Kapoor said. While the Gio microtruck has been phased out, M&M will continue with its passenger carrier
variant.

Jeeto, TUV300 have boosted M&M's market share; more launches coming
before FY16 ends: Pravin Shah, CEO, Automotive ET Now Dec 2, 2015, 11.22AM IST

In a chat with ET Now, Pravin Shah, President & CEO, Automotive, M&M, shares his business outlook. Excerpts:
ET Now: Improving consumer sentiment has reflected in the good growth of the passenger vehicle segment.
Do you expect this momentum to continue? Or is it just because of festive sales?
Pravin Shah: The festive months of October and November have surely played a part in terms of rising demand.
This year's festive season has been better than last year's. We saw 20% growth in October and 21% in November. It
has helped Mahindra back into the green for the first eight months of the fiscal.
With GDP at 7.4%, inflation under control and fuel prices being stable, the future course looks good. Besides, the
pay commission award is likely to boost discretaionary spends.
All this should lead to a positive sentiment. Urban demand continues to be on an upswing, and we see it continuing.
However, rural demand remains a cause of concern.
But there have been policy interventions by the government. I am sure the rural economy will also be on a
improving path going forward.
ET Now: Will the pay panel award lead to rising demand for tractors too?
Pravin Shah: There is a low base in place. Three million people stand to benefit from the award. There may be no
arrear payments this time, but the amounts are large nonetheless. The number of beneficiaries is also quite large.
Looking at that, I am sure spending will rise. It may go more into lower-ticket items, but this discretionary spend is
also likely to benefit the auto sector too.
There are a lot of new product launches lined up by almost all the manufacturers. The launch of any new product
expands the market by creating new customers. It plays a significant role in helping increase overall demand in the
industry.
ET Now: How has been the response your LCV Jeeto and TUV300?
Pravin Shah: Let me talk about the TUV300 first. Since its launch in mid-September, around 16,000 units have
been booked. We have already delivered around 12,700 vehicles. And the booking continue to come in.
I have gone on record that we are working to increase our capacity. The AMT variant of the TUV300 also has had
good traction. We are currently looking at how to meet this rising demand for AMT.
All in all, TUV300 has really given us the result we expect from a Mahindra brand. Along with existing power
brands like Bolero, Scorpio and XUV500, the TUV300 has helped us boost our market share.

The Jeeto, which was launched in June, has also been very well received in the market. In the under-2-tonne
commercial vehicle segment, our market share has risen from 8% to almost around 32%.
Both the Jeeto and the TUV200 have really helped Mahindra in increasing its market share. They have also boosted
our overall sales volume, as reflected in the festive sales figure.
ET Now: You went in for a marginal price hike last quarter. Is there room or need for any further price
hikes?
Pravin Shah: Yes, we've gone in for a price increase to the tune of 1-1.2%, varying from product to product. You
have to understand that pricing is a dynamic aspect. Subject to various factors, we have to take calls on product
prices.
At this stage we are not sure whether or not there is going to be a price hike. But it is something we will certainly
contemplate. The market situation will play a big role in our decision.
ET Now: The government has granted an extension on the excise duty for the auto sector till December. If it
does not continue, would there be a big negative impact on sales?
Pravin Shah: Looking at the overall scenario, I see no big negative for the industry. Auto sector is a big revenue and
employment generator. It is also a significant contributor to GDP growth. I think the government has kept this in
mind.
Considering this, I do not foresee a change in rates.
ET Now: Any new product launches from you before the fiscal ends?
Pravin Shah: In FY16, we have launched the products we had planned. And there is more in store. We will be
launching a couple of new products before the end of this financial year.