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Will launch buses in India that run on bio-ethanol and bio-gas

Swedish heavy-duty truck and bus maker Scania Commercial Vehicles India is bullish on India’s commercial vehicle market. The company, which has more than doubled its truck and bus sales in 2015…

Swedish heavy-duty truck and bus maker Scania Commercial Vehicles India is bullish on India’s commercial vehicle market. The company, which has more than doubled its truck and bus sales in 2015, has geared up to launch its city bus that runs on bio-fuel and on-road truck range in 2016. Anders Grundstromer, managing director, Scania India, explains his expansion strategy to Mahesh Kulkarni. Excerpts:

Scania has been selling premium trucks in India since 2008. How has been the journey so far?

We are present only in the premium segment of the business, which is just 1% of the total commercial vehicle market in India. The total commercial vehicle market this year will be around 160,000 units that includes trucks and buses, up from 130,000 units last year, a growth of 23% for all segments and all companies put together. Second half of the year has been growing faster. What is growing most is actually the premium segment, but from a very low base. Since our entry into the Indian market, we have a rolling stock of around 1,800 vehicles and most of it are mining vehicles. We had been focusing on mining segment so far. Since last year, we have been focusing on the inter-city segment.

How many trucks and buses did Scania sell during 2015?

We expect to deliver close to 1,000 units for all buses and trucks in calendar year 2015. The growth over last year is more than double. Last year we delivered 450 units. This year we will be selling around 200 buses and around 800 trucks. Last year, we sold only 47 buses and the bus business is growing four times this year.

What are your focus areas for 2016?

We will introduce our city bus and gradually increase participation in more segments of the Indian commercial vehicles market. We are also launching our on-road trucks during the auto show in Delhi early 2016. These are our G-series trucks with an inline engine of up to 490 HP (horse power) and 49 tonne carrying capacity for long haulage and construction applications. Nagpur Municipal Corporation will be our launch customer for city bus. All our buses including the inter-city buses will run on bio fuels from next year. We will be the first to launch buses that run on bio-ethanol and bio-gas in India, which will be manufactured at our Bengaluru plant. We will introduce these buses in 10 cities next year.

The carrying capacity of our new trucks will be 49 tonnes and above. We are not going to focus on price. The cost per km or per tonne or cubic metre will be interesting feature and the customers that understands that will be our customers.

What is Scania’s share in the premium truck market?

We have 35% market share in the premium truck segment. Our ambition is to retain 35% market share in all premium segments whether it is trucks or buses. By 2020, the commercial vehicle market is expected to touch 250,000 units and we expect premium segment to be 5%of the total market at 12,500 trucks, which is the fastest growing segments in India. Of this, we want to have 35% market share. The growing economy and the middle class in India wants safe and reliable products to travel. This will offer a tremendous growth opportunity for us in the next five years.

What is your strategy to achieve the target?

Our strategy is that we are launching latest models of Scania in India. We are launching latest variants available from Scania, which are most modern products we have. Our strategy is with local production, we will also localise these trucks to 65 per cent for trucks and 85 per cent for our buses, without risking the brand or the quality. Currently, we have 40 per cent on mining vehicles and on the inter city bus, Scania Metrolink it is roughly 75 per cent. We are still importing the drive line which is very expensive.

Will you be manufacturing drive lines in India?

We don’t exclude anything. The most important thing for us is to give good quality. If we localise in India, we want to have the same quality that we offer in Europe or in Brazil or anywhere in the world. We will produce the same quality produced here with Indian labour which means that it is cost efficient.

How much growth do you expect for CV market in 2016?

Next year, we expect the Indian CV market to touch 180,000 units to 190,000 units. By 2025, India will achieve exponential growth and touch 250,000 units mark.

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