Swaraj Baggonkar Moneycontrol News
The concept of luxury bus travel has been synonymous with brand Volvo. In India too, the Swedish giant has been steadily building its brand in the premium segment.
At the same time, Suresh Chettiar, Business Head of Volvo Buses, South, Asia and VP Volvo Bus Corporation, realises that even for a luxury vehicle manufacturer, "value" is important when it comes to the Indian consumer. But Chettiar, who has spent 20 years in the Volvo Group and moved to the bus business earlier this year, makes a distinction between offering discounts and meeting specific needs of the customers.
In a chat with Moneycontrol, Chettiar talks about Volvo's plans to offer a ‘value product’ to the Indian buyer and electric vehicles.
Excerpts:
Q. As Eicher is in the affordable segment, Volvo has established itself in the premium segment. But there is a void in between. Would you want to address that end of the market?
A. When it comes to our strategy, we are very clear that we want to be a strong and leading player in the premium segment. We are well-placed at the moment with respect to the products in the premium segment. And over time, the market is going to develop even more strongly because the aspirational travel is going to drive the bus industry.
Q. You have a JV with Eicher Motors. How will the synergies evolve?
A. We have a joint venture with our partner Eicher Motors and there is a lot of synergy work that we do to ensure that both our spaces are improving. We also think that we can see segments emerging which would offer greater value to customers in specific segments. And we are keeping an eye on it; in fact, we have already launched our products in BRT (Bus Rapid Transit) segment. We will be looking at such initiatives from time to time but it will depend on the demands of specific segments and customers.
Q. When you say value offering, what kind of a pricing discount are we talking about compared to what you offer today?
A. We are not looking at discounting the current products. What we are talking about is addressing specific needs through specific products. BRT is a very different application and for that we launched our UD brand-based product.
Q. UD brand as such is a value offering. Is the UD brand already on the road?
A. The first lot of buses under UD have already been delivered. By the end of year, they will be deployed by one of our customers.
Q. Were they freshly developed or were they derived from an established platform?
A. This is a product that we adapted very clearly for the Indian market requirements.
Q. Is there an export plan for these buses as well?
A. Our attempt is to stabilize and develop this line of products for sometime before looking at the export market.
Q. How has the market for premium buses performed?
A. The overall bus segment has seen a revival of sorts lately because the market went down and it has come back up. The volumes are stabilizing over the last few years. And we now see that with the economic improvement the private sector has also come into the fray.
Q. What is the current manufacturing capacity at the Bengaluru plant?
A. We have a capacity of 1500 units per annum and the factory is built to expand with additional shifts also. We won’t need further investments in capacity.
Q. Tata Motors and Ashok Leyland have entered the electric bus segment. Do you see Volvo getting in electric buses?
A. Volvo is the leading player globally when it comes to electric mobility, including hybrids. We were the first ones to introduce hybrids in the country and those buses are running fine in Mumbai. When it comes to fully operational electric vehicles, tenders are coming in. From Volvo’s perspective, we would like to watch this space as well as development of vehicle technologies and infrastructure to be able to clearly outline a strategy. But we have a very strong portfolio globally to be ready when we have to be in India.
Q. At this point in time, will it be a very expensive proposition for you to launch them here?
A. It is a function of how the vehicles are specified. We are still evaluating options of what we can do in India on electrics. Like-to-like comparison can be price driven. But our electric offering, if at all it comes, will be based on a premium segment offering. So it may not be necessarily be an electrification of a bus but it will be built on a premium level.
Q. And you have the option to build them here or will you rely on imports?
A. We have one of the finest bus building facilities in the country and we have now been offering extremely high-quality bus bodies from this facility for over 10 years now. So we are ready for any challenges in bus body-building that we need to undertake.
Q. Have we seen any change in demand after the AMRUT scheme was launched, which was essentially a replacement of JNNURM?
A. We don’t see a possibility of a bus subsidy programme right now and we don’t see demand coming in from there.
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