Swedish commercial vehicle major Volvo Bus Corporation is working out a plan to make India one of its top five bus markets in the world. The company has taken initiatives including expanding workforce and production capacity and enhacing R&D operations in India to achieve the goal. The company, which has 1,000 employees on its payrolls in India, will expand its workforce by another 30% in the next two years.
Talking to FE, Akash Passey, managing director Volvo Buses India, a wholly owned subsidiary of the Swedish major, said Volvo is already the market leader in the Indian luxury bus market.
He said the company has a 75% share in luxury intercity AC coach segment and over 50% share in the AC diesel low floor city buses, which are present across 12 cities in the country.
He said the company has a target to achieve a turnover of $1 billion in India in the next five years to bring India into the fold of its top five markets. To achieve this, the company will expand the production capacity at its bus manufacturing facility near Bangalore to 5,000 units in the next five years from the current 1,000 units.
Abdul Majeed, leader-auto practice in PricewaterhouseCoopers, said Volvo had established its leadership in the luxury bus segment space in India, forcing players like Mercedes Benz to come in. Tata and Ashok Leyland are also entering the top end segment, he added.
Currently, Majeed said the market size of luxury bus segment stood at 1,000-1,100 buses per annum and growing at around 20%. In the next five years, he said the market will expand to 7,000-10,000 buses per annum. The luxury bus makers have tremendous opportunity as the state governments like Karnataka are replacing their old buses with luxury ones to improve their service. Karnataka was the first state in India to introduce Volvo luxury city buses a few years ago. He also said the people will prefer luxury coaches to cover small distances like 300-400 kms due to overcrowded trains and high flight tariffs. Fleet operators are showing more interest in introducing luxury coaches as road infrastructure has also improved significantly compared to 10 years ago, Majeed added.
Volvo is primarily eyeing China and India markets for its sales growth, as traditional markets like Europe, North America and South America are not encouraging ever since recession.
According to Rune Lundberg, senior vice president of Volvo Bus Corporation, ?India is a central developing market for Volvo buses. India together with China will play a major role in the global bus market.?
Currently about 3,500 Volvo buses are operating in India, both in the city and inter-city segments. Volvo India was earlier run as a joint venture, with Volvo owning 70% and the Azad Group 30%. But a few day ago, Volvo bought out the partner and now owns 100% of the Indian operations.