Final Report

SUBROS LIMITEDFeasibility Study ReportBus Air Conditioner Market – Strategy & Plan

Summer Training Project

on

Feasibility Study & Market entry strategy for

Bus Air Conditioner Market

submitted by:

Sachin Gupta (09FT-128)

student of:

IMT - Ghaziabad

to the:

Marketing Department,

Subros Limited, Noida (Uttar Pradesh)

June, 2010

CERTIFICATE OF APPROVAL

The following Summer Project Report titled

1 Feasibility study for entry into Bus Air Conditioner Market

2 Market Entry strategy and plan for Bus Air Conditioner Market

3 To create a Future State Map for the compressor value stream.

is hereby approved as a certified study in management carried out and presented in a

manner satisfactory to warrant its acceptance as a prerequisite for the award of Post-Graduate Diploma in Management-Full Time for which it has been submitted. It is

understood that by this approval the undersigned do not necessarily endorse or approve any

statement made, opinion expressed or conclusion drawn therein but approve the Summer

Project Report only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature

Faculty Examiner ____________________ _________________

PG Summer Project Co-ordinator ____________________ _________________

____________________ _________________

CERTIFICATE

This is to certify that Mr. Sachin Gupta, 09FT-128, a student of the Post-GraduateDiploma in Management-Full Time, IMT Ghaziabad, has worked under our guidance and

supervision. This Summer Project Report has the requisite standard and to the best of our

knowledge no part of it has been reproduced from any other summer project, monograph,

report or book.

------------------------------- ------------------------------- -------------------------------Dr Rakesh Chopra,Professor

IMT Ghaziabad

Mr. KananSenior Manager

The Industrial Engineering

Subros Limited

Mr Pankaj MehraAssistant General Manager

NBD, AM & Communication

Subros Limited

11 June 2010 11 June 2010 11 June 2010

ACKNOWLEDGEMENT

The euphoria and satisfaction that is associated with the successful completion of this

project would not have been there, had it not been without the kind and helpful assistance by

my guide Mr.Pankaj Mehra, Assistant General Manager - NBD, AM & Communication,

Subros Limited, Noida.

I would like to heartily thank them for giving me the wonderful opportunity on working on a

business critical and challenging project. The entire duration of two months of working on the

project has been an enlightening experience. I would also like to extend my gratitude to Mr.Karan Bains and Mr. Yogesh Singh who has been a constant source of help and guidance,

and all the team members at Marketing and TIE for the support extended.

I would also like to thank my faculty guide Dr. Rakesh Chopra for sparing time to help me

during the difficult phases of my project and providing his valuable insights on how I could

tackle them. His valuable suggestions helped me in channelling my effort in the right

direction and take a right approach in initializing and completing the project.

Table of Contents

Executive Summary .............................................................................................................. 1

1 Subros – The Company ................................................................................................. 5

1.1 Company Background ............................................................................................ 5

1.1.1 Client base....................................................................................................... 5

1.1.2 Financial Performance..................................................................................... 5

1.2 Subros Corporate & Divisional Planning ................................................................. 7

1.2.1 Corporate Mission............................................................................................ 7

1.2.2 Company Business Units................................................................................. 7

1.2.3 Growth opportunities........................................................................................ 7

2 Introduction.................................................................................................................... 9

2.1 Rationale of Study .................................................................................................. 9

2.2 Scope of the Study ................................................................................................. 9

2.3 Deliverables.......................................................................................................... 10

2.4 Methodological Roadmap for the Study ................................................................ 10

2.5 Data Source.......................................................................................................... 10

2.6 Limitations ............................................................................................................ 10

3 Bus Market – Market Insights....................................................................................... 11

3.1 Demand Review ................................................................................................... 11

3.2 Bus Market Share ................................................................................................. 11

3.3 Market Structure Forecast .................................................................................... 12

3.3.1 Segment Based Classification ....................................................................... 12

3.3.2 GVW Based Classification ............................................................................. 14

3.3.3 Application Based Classification .................................................................... 21

3.4 Growth Driver ....................................................................................................... 33

3.5 Emerging Trends in Bus Market............................................................................ 35

4 Bus Air Conditioner: Demand Measurement ................................................................ 37

4.1 Air Conditioned Buses Classification..................................................................... 37

4.1.1 AC Sleeper .................................................................................................... 37

4.1.2 AC Bus .......................................................................................................... 38

4.1.3 AC Sleeper Seater......................................................................................... 38

4.1.4 Volvo AC ....................................................................................................... 39

4.2 Bus Air Conditioner............................................................................................... 39

4.2.1 Home/ Office Air Conditioning........................................................................ 39

4.2.2 Automotive Air-conditioning Industry.............................................................. 40

4.2.3 Shopping Centre............................................................................................ 41

4.3 Analysis ................................................................................................................ 42

4.3.1 Methodology .................................................................................................. 42

4.3.2 Data Analysis................................................................................................. 42

4.3.3 Result ............................................................................................................ 43

5 Analysis – Customer Market ........................................................................................ 45

5.1 Customer Distribution ........................................................................................... 46

5.1.1 Coach Work Factories ................................................................................... 46

5.1.2 Workers Employed ........................................................................................ 47

5.1.3 Gross Output ................................................................................................. 47

5.2 Customer Value Analysis...................................................................................... 49

5.2.1 Research Methodology.................................................................................. 49

5.2.2 Results .......................................................................................................... 50

5.2.3 Conclusion..................................................................................................... 52

5.3 Customer Satisfaction Measurement .................................................................... 53

5.3.1 Literature Review........................................................................................... 53

5.3.2 Research Methodology.................................................................................. 54

5.3.3 Result ............................................................................................................ 55

6 Market Segmentation & Targeting................................................................................ 61

6.1 Market Segmentation............................................................................................ 61

6.1.1 Segment A..................................................................................................... 62

6.1.2 Segment B..................................................................................................... 62

6.1.3 Segment C..................................................................................................... 62

6.1.4 Summary ....................................................................................................... 63

6.2 Market Targeting................................................................................................... 63

7 Analysis: Competitive Force......................................................................................... 65

7.1 Analysis ................................................................................................................ 65

7.1.1 Industry Competitors...................................................................................... 65

7.1.2 Industry Product ............................................................................................ 71

7.1.3 Industry Suppliers .......................................................................................... 74

7.1.4 Industry New Entrants ................................................................................... 75

7.1.5 Industry Customers........................................................................................ 75

7.1.6 Industry Substitutes ....................................................................................... 76

7.2 Competitive Force Analysis Summary .................................................................. 77

Appendix 1: Company viz sales figure for passenger vehicle in India ................................. 79

Appendix 2: Company viz bus production by various OEM’s in India .................................. 81

Appendix 3: Company viz production figure of Buses having GVW < 5 tons ....................... 83

Appendix 4: Registered Motor Vehicles (Category-wise) in India by States/Uts .................. 85

Appendix 5: Calculation for total number of annual tourist bus trips required ...................... 87

Appendix 6: Technical Details for available AC Product Range for Small Buses................. 89

Appendix 7: Technical Details for available AC Product Range for Medium Buses ............. 91

Appendix 8: Technical Details for available AC Product Range for Large Buses................. 92

Appendix 9: Field Survey 1 - Questionnaire ........................................................................ 93

Appendix 10: Cluster Analysis for field survey 1.................................................................. 95

Appendix 11: Field Survey 2 - Questionnaire ...................................................................... 99

Appendix 12: Principal Component Analysis for expected after sales service ................... 103

Appendix 13: Principal Component Analysis for perceived after sales service .................. 113

List of Tables

Table 1-1: Subros Balance Sheet Financial Analysis ............................................................ 6

Table 3-1: Bus production data for respective GVW............................................................ 14

Table 3-2: Bus production data for GVW < 5T .................................................................... 15

Table 3-3: Bus production figure and market share............................................................. 15

Table 3-4: Models available for buses with GVW < 5T........................................................ 16

Table 3-5: Models available for buses with GVW < 7.5T ..................................................... 17

Table 3-6: Models available for buses with GVW < 12T ...................................................... 19

Table 3-7: Models available for buses with GVW > 12T ...................................................... 20

Table 3-8: Various types of buses registered in major metro cities in India ......................... 21

Table 3-9: Various types of buses registered in Delhi ......................................................... 21

Table 3-10: School Bus classification.................................................................................. 30

Table 3-11: Popular available options for school bus application ........................................ 31

Table 3-12: Major Indian Economic Data ............................................................................ 33

Table 3-13: Ongoing bus project as on June 2010.............................................................. 36

Table 4-1: Household appliances industry size ................................................................... 40

Table 4-2: Data for Air Conditioner surrogate variables....................................................... 42

Table 5-1: Number of coach work factories in operation...................................................... 46

Table 5-2: Employees employed in coach building factories ............................................... 47

Table 5-3: Gross Output (in lakhs) of coach work factory.................................................... 47

Table 5-4: Gross value of plant and machinery ................................................................... 48

Table 5-5: Delhi AC Bus Body Builder Contact List ............................................................. 49

Table 5-6: Result of Cluster analysis................................................................................... 51

Table 5-7: Cluster Vs Population Attribute Mapping ............................................................ 51

Table 5-8: Principal Component Analysis Factors for expected after sales service ............. 57

Table 5-9: Factor Score for expected after sales service component .................................. 57

Table 5-10: Principal Component Analysis Factors for perceived after sales service .......... 59

Table 5-11: Factor score for perceived value of after sales service..................................... 59

Table 6-1: Bus Air Conditioner market segments ................................................................ 61

Table 6-2: Summary for Market Segment ........................................................................... 63

List of Charts

Chart 1-1: Client –Revenue Mix 5

Chart 1-2: Segmental revenue breakup 7

Chart 3-1: Number of buses in India 22

Chart 3-2: Region viz distribution of SEZs 23

Chart 3-3: International Tourist Arrival in India 24

Chart 3-4: Domestic Tourist Visit in India 25

Chart 3-5: Fleet size of STUs in major Indian States 26

Chart 3-6: Distribution of medical emergencies in India 27

Chart 3-7: Ambulance type distribution in India 28

Chart 3-8: Urban Population growth rate 33

Chart 4-1: Weighted market capitalisation for Air-Conditioner & Refrigerator Industry 40

Chart 4-2: Automobile Air Conditioner Projection 41

Chart 5-1: After Sales Service Weightage Boxplot 55

Chart 5-2: Customer Expectations for After Sales Service 58

Chart 5-3: Customer perceived value for After Sales Service 60

Summer Project Report 1


Market Feasibility Study and to prepare a Market Entry Strategy for Bus AirConditioner Market

Executive Summary

Introduction

Subros Limited to achieve a figure of annual revenue of 2500 crores from current figure of

1000 crores has decided to look into other business opportunities like railways, buses,

refrigerated trucks, tractors, containers and truck cabins. At present bus air-conditioning

penetration level is only 4-6% and market experts expects it to grow at a rate of 35% in

coming years.

Hence this project was initiated by company to do a feasibility study for entering into the bus

air-conditioner market.

Approach

This study will analyze different market growth drivers to provide an estimate for bus air

conditioner growth rate and market size in coming years. Also the regional trends would be

analyzed to find the lucrativeness of different regions across the geography of country. The

projection will include demand from institution, tourist operators, private operators and state

transport undertakings (STUs).

This study will also propose a market entry strategy for this market. For this first of all in

order to identify order qualifiers and order winners, an analysis of customer buying behaviour

would be done

At second step, an analysis of customer expectation and preference data would be

analyzed. This will help in identifying the gaps with in which company can make an inroad

into this market. This analysis will also help in segmenting the existing market and to make

market target plan.

At third step market competitive forces would be analyzed to formulate a market positioning

strategy and plan for the company.

Limitations


The needed primary data was collected from Delhi/NCR region which cannot be taken as a

representative sample for whole country. Also looking into the unorganised nature of market

sample space analyzed size was small in size. A due attention was given while selecting

statistical tools to analyze the data.

Opportunities

Due to the strong support from government and rise in per capita income because of strong

economic growth rate demand of deluxe buses is growing at a very high rate. To meet the

rise in demand all the major original equipment manufacturers have initiated number of

projects to increase installed capacity. Also because of new government policies with

regards to health care and school buses demand for buses from them has also increased

manifold. In 2009 in total 103083 buses were sold in India.

Also because of tourism ministry efforts to increase tourist traffic, will gives a boost to

demand for luxury buses.

Market Entry Strategy

For this a market survey was done. On statistical analysis of obtained data after sales

service and cooling efficiency were identified as order qualifiers. A second level survey was

conducted to understand the customer expectations for after sales service.

Using SPSS on the data obtained from second market survey, two major factors were

identified – Responsiveness and Effectiveness. Market was segmented on this two

parameters To formulate a market targeting strategy statistical analysis was done on

customers perceived value. The results obtained have shown that for most of the customers

there is no major difference between expected and perceived value of service. So we cannot

enter the market only with strong after sales service proposition. To tap this market we have

to look into second order qualifier i.e. cooling efficiency. For this further study can be

undertaken to compare competitors market offering technical details.

After doing competitive force analysis it was found that there are few suppliers which are

particularly strong in Northern India. Further study can be done to analyze other regions also

so as to formulate a national level strategy.

Conclusion


Bus air conditioner market has a very huge potential and is expected to grow at a very high

growth rate. But looking into the wide spread out nature of market, company should give due

attention and care while allocating the needed resource. Company should give more

attention to cooling efficiency and after sales service. Customers expect a high degree of

responsiveness and effectiveness from their supplier. So it should be taken care of while

designing distribution network to meet customer requirements.

Future Scope

Study of OEMs (Tata Motors, Ashok Leyland etc).

Analyzing competitors’ product offerings and company offering. For this QFD tool may be

use.

Study of other part of countries i.e. East, West and South.



1 Subros – The Company

1.1 Company BackgroundEstablished in 1985 as a joint venture with Denso Corporation and Suzuki Japan, Subroshas moved across the manufacturing chain from assembly operations to becoming thelargest and only integrated manufacturing unit in India for Auto air conditioning systems. Thecompany has grown its capacity from 15,000 AC units at inception, to 750,000 AC unitscurrently. The company has the capabilities to manufacture compressors, condensers, heatexchangers and all connecting elements that are required in the AC loop. Subros is incollaboration with its strategic partners, Denso and Suzuki, for technological expertise for themanufacture of AC systems. Further, in view of growing passenger vehicle (PV) volumes,the company has ramped up capacity to 7,50,000 units per annum and proposed to furtherexpand capacities to 1,000,000 units per annum.

1.1.1 Client baseThe company's business model is heavily reliant on a narrow set of clients, including 71% ofrevenues coming from its oldest client, Maruti Suzuki. Its customer base has grown toinclude auto heavyweights like Tata Motors (18%) and Mahindra & Mahindra (5%). Thecompany currently caters majorly to the passenger vehicles segment, but plans to diversifyits market base with the foray into the commercial vehicle segment, going ahead, with thesupply of cabin ACs to high tonnage trucks and buses (for Ashok Leyland, Eicher andVolvo).

Chart 1-1: Client –Revenue Mix

Source: Subros Limited

1.1.2 Financial PerformanceSubros is the market leader in the 1.5 million units Indian auto air-conditioning Industry, witha 41% marketshare, followed by other players like Visteon, Behr, Sanden and Denso. Themanagement has guided further penetration to around 43%, over the next couple of years,as it is well placed to cash in on the recovery cycle in the Auto industry, owing to its soundclient base, technological edge and better operating leverage.


Table 1-1: Subros Balance Sheet Financial Analysis

Y/E March (Rs cr) Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Sales (Rs) 787.63 774.21 755.26 657.21DPS (Rs) 0.5 0.8 4 3.5EPS (Rs) 2.19 4.76 23.69 20.72Operating Margin (%) 9.09 12.58 11.7 11.23Gross Profit Margin (%) 4.55 7.67 7.45 6.93Net Profit Margin (%) 1.92 4.31 4.38 4.28Debt/Equity 0.73 0.63 0.83 0.63Long Term debt/Equity 0.37 0.25 0.36 0.27Current Ratio 1.51 2.01 2.23 2.04Quick Ratio 0.79 0.77 0.85 0.79Inventory Turnover Ratio 10.04 9.09 8.23 8.26Source: http://money.rediff.com/companies/subros-ltd/10630002/results-annual

http://www.moneycontrol.com/financials/subros/profit-loss/S07

Their is a sharp decrease in EPS for the year 2008 which can be attributed to the share splitof 1:5. Company has very strong financial health. Debt/Equity ratio for company is quite low.As cost of debt is low in comparison to cost of equity so company can borrow more to finaceits expansion plan. But looking into earning per share, it has drastically reduced from 4.76 in2008 to 2.19 in 2009 though operating income has increased from 774.21 to 787.63. It canbe attributed to increase in cost of good sold and increased interest payout.

Subros interest coverage ratio has decline from 6.01 in 2007 to 2.15 in Mar 2009. Alsocompany’s current assets are highest at Rs 175.49 crores in 2009 in compare to Rs 145.58crores in Mar 2008. Company’s PBDITA also stoods low at Rs 70.28 crores in Mar 2009 ascompare to Rs 87.94 crores in Mar 2008. So we may say that the comapny is facing afinancial problem. And company PE ratio has also dropped to 6.59 in Mar 2009 from 10.19 inMar 2007. So company has somewhat looses its investors confidence.

http://money.rediff.com/companies/subros-ltd/10630002/results-annual

http://www.moneycontrol.com/financials/subros/profit-loss/S07


1.2 Subros Corporate & Divisional Planning

1.2.1 Corporate MissionSubros mission is - “To be world class Auto Air-Conditioning System manufacture havingglobal competitiveness”.

Company management has set a goal for coming 5 years and named it ‘1525’. The goal is toachieve an annual sales figure of 2500 crores from present 1000 crores by 2015.

1.2.2 Company Business UnitsSubros manufactures Air Conditioning units, HVAC and Fan Motor Assembly units(Ventilators) for the passenger vehicle segment. Auto Air-Conditioning products contribute toa substantial 90% of the company's revenue pie.

Chart 1-2: Segmental revenue breakup

Source: Research, Angel

The companyhas classified its businesses into two strategic business units on the productbasis:

Automobile Air Conditioner HVAC

Automobile air conditioner consist of compressor, condenser, evaporator, cooling fan, blowerand heater unit.

HVAC is an acronym that stands for the closely related functions of "Heating, Ventilating,and Air Conditioning" - the technology of indoor or automotive environmental comfort. It isparticularly important in the design of medium to large industrial and office buildings suchas skyscrapers and in marine environments such as aquariums, where safe and healthybuilding conditions are regulated with temperature and humidity, as well as "fresh air" fromoutdoors.

1.2.3 Growth opportunitiesAssessing growth opportunities company has adopted intensive growth strategy. In thiscompany tries to improve its existing businesses by reviewing opportunities. To understantthis we will use “product-market expansion grid”.


Figure 1-1: Product-Market Expansion grid

Market Penetration Strategy: To gain more market share with its current products intheir current markets (Maruti, Tata etc), company has started improving its vendor rating.By this they are able to get a large portion of available pie by delivering high qualityproduct at desired cost. Company has also expanded its installed capacity to 0.75 millionand is planning to increase it further to 1 million units per annum. Alos company has setup two new plants i.e. at Manesar and Pune.

Product Development Strategy: Company has developed a new generation energyefficient swash plate compressors from 83cc – 138cc to meet all customer needs. It wiilhelp to further increase its market share. Company has also start manufacturing HVACsto meet its eisting customer needs. Also company has set up new design centre and toolroom to strengthen up is R&D arm.

Market Development Strategy: Company has started exploring new OEMs (like M&M,Reva) for its existing product line.

Diversification Strategy: Company has started exploring new avenues for furthergrowth like railways, refrigerated trucks, tractors and buses. It has started manufacturingair conditione units for tractors and mini buses.


2 Introduction

Subros is a largest and only integrated manufacturing unit in India for Auto Air Conditioning.The company has the capability to manufacture compressors, condensers, heat exchangersand al the connecting elements that are require to complete the AC loop.

To improve its current business company is planning to enter into below listed air conditionermarket.

Truck Cabins Railways Tractor Refrigerated Trucks

2.1 Rationale of Study

The India bus industry forms an important part of the automobile industry in the country.Over the last few years, the bus industry has grown to a great extent and new types of buseswith better facilities have come up. Due to the development of infrastructure and more roads,more and more people from the rural areas are also nowadays availing of the bus services.With the recent innovations, more buses are being introduced into the market. These busesare spacious and comfortable. They are also eco friendly and the mileage is also prettygood. Nowadays, new types of buses are being introduced which are equipped withadvanced facilities and services such as air-conditioners, passenger information system, airsuspension system, high quality engines and transmission systems and so on. With moresuch buses being introduced, the customer base is also expected to rise pretty well over thefew years.

Considering the growing middle and upper class, rise in per capita income, strong GDPgrowth rate of the country; we can say that there is a very huge market for air conditionedbuses and hence bus air conditioners. But there is no reliable database or a previous studyon air conditioned buses and their emerging trends.

The objective of propose study is -

To do a feasibility study for entry into air conditioned bus market and prepare a report forthe same.

To prepare a market entry strategy and plan for the air conditioned bus market.

2.2 Scope of the Study

The scope of this study is To study the emerging trends with in different segments of bus market To study the customer buying behaviour. To study current market offerings from existing players. To do a competitor analysis. And to formulate a market targeting and positioning strategy for company’s product if

they enter into it.


2.3 Deliverables

To attain the aforesaid, the deliverable is the bus segment to enter into and the marketpositioning strategy for the same.

2.4 Methodological Roadmap for the Study

Looking into geography of India, we can say that air condition bus is still a niche segment.As no data is readily available for the same, CMIE and Indiastat database will be use tostudy the demand drivers for various segments of bus market. Also various magazinesources like Commercial Vehicle, Auto Monitor, Motor India and other will be followed tostudy the market forecasts.

For further analysis, two level of study will be carried out. During first stage interviews andfield survey will be conducted with different stakeholders like Bus operators, Institutionalbuyers, Bus bodybuilders and competitors’ sales agent. By this we will try to identify variousparameters which play a role of order qualifiers and order winners while making a purchasedecision for a bus AC.

In second stage on the basis on the basis of results obtained for order qualifier in first stage,questionnaire will be designed. After analysing the result, criteria for market segmentationwill be identified and accordingly market targeting and positioning strategy would beformulated.

2.5 Data Source Secondary Research (Trade magazine, Journals, company brochures, company reports,

company websites, market experts interviews, periodicals, white papers etc) Primary Research (Questionnaire Method and Personal Interviews)

2.6 LimitationsField Survey is conducted only in Delhi NCR region. Regional pattern may exist across thegeography of India.


3 Bus Market – Market Insights

CRISIL in its annual report 2009-10 has estimated that the domestic passenger vehiclesegment will grow at a CAGR of 7-8 %. Growing population and urbanisation are driving updemand for the bus segment. At the same time, higher usage of personal modes of transportis leading to a lower preference for public transport. The LCV bus segment is expected togrow at a CAGR of 8-9 %, whereas the MHCV bus segment is expected to increase at aCAGR of 6-7% in next 5 years.

3.1 Demand Review

Demand for buses is primarily determined by increase in population, household incomes,and industrial and commercial activity in a country. Public transport systems in India havenot been able to to keep pace with the rapid and substantial increase in demand over thepast decades. Moreover a large number of passengers are turning to personalised modes oftransport, indicating the growing need for an improved urban transportation. The governmentinitiative through JNURM scheme is expected to provide an impetus to the MHCV bussegment sales. Demand from private operators has been increasing on the back of increasein inter-city travel on luxury buses. However due to the introduction of metro rails in Delhi,Mumbai, Hyderabad, Bangalore and Kolkata will lead to decrease in demand for buses inthese cities.

The Jawaharlal Nehru Urban Mission (JNNURM) scheme was introduced by the governmentin December 2005 for 7 years. It is a prominent centrally sponsored scheme with sectorspecific focus on urban infrastructure. Improving the urban infrastructure is one of theimportant focus of the scheme. Under this scheme states will be provided financialassistance for procuring urban buses for their respective state transportation. In unionbudget 2009-10 government has increased the outlay under this scheme by 87%. LCVs areprimarily demanded by schools and corporate sectors like IT/ITes.

3.2 Bus Market Share

The below drawn pie graph shows the overall bus market share for 2008-09.


3.3 Market Structure Forecast

CMIE in its annual forecast report for commercial vehicles has projected North India to bethe key market for trucks and buses.

Segment Share (%)North 36East 17West 24South 23

Source: CMIE Database

We have classified Indian bus market as discussed below:

3.3.1 Segment Based ClassificationBuses can be classified into four segments, which can be further subdivided into two subsegments:

1. Routea. Intra-Cityb. Inter-City

2. Usera. Publicb. Corporate

3. Ownershipa. State Transport Undertakings (STUs)b. Private Operators

4. Vehiclea. Light Commercial Vehicles (LCVs)b. Medium & Heavy Commercial Vehicles (MHCVs)

There is a high degree of overlap among the above four segments. Each individual segmentwould account for the entire population of buses at any given point of time.

3.3.1.1 Route Based

This segment includes buses which ply on intra-city and inter-city routes across the country.Demand drivers for this classification of buses are:

Inter-City Intra-CityImproving road infrastructure Urban CongestionPropensity to travel Improving road infrastructureBetter quality buses Safer TravelEconomical over short distancesLow cost of setting up infrastructureGrowth in urban population and increasingworking age population


3.3.1.2 User Based

This segment includes demand of buses from public and corporate, including demand fromniche segment such as BPO industry, school buses and executives. Demand drivers for thisclassification of buses are:

Public CorporateEconomical mode of transport Fast growing BPO industry (on city

outskirts)Better connectivity and flexibility Demand from schools and executive travelsUrban congestion Better connectivity and flexible timingsImproving road infrastructure Growth in urban population and increasing

working age populationDemand from SEZs, EPZs etc.

3.3.1.3 Ownership Based

This segment includes demand for buses from the state transport undertakings (STUs) andprivate operators. Demand drivers for this classification of buses are:

STUs PrivateGrowth in urban population and increasingworking age population

Demand from corporate

Fleet replenishment Comfortable travellingSocial obligation Customised ServiceLow vehicle maintenance cost Better connectivity and flexible timings

3.3.1.4 Vehicle Based

This segment includes LCV and MHCV buses. The following are the demand drivers forthese two sub categories:

LCV MHCVFast growing BPO industry Export DemandDemand from schools and executive sales. Inter-City travel

Better cost economics


3.3.2 GVW Based ClassificationThe classification of commercial vehicles as per the Motor Vehicle Act is based on the GrossVehicle Weight (GVW). For passenger carriers the classification is listed below:

GVW Segment Description

< 5 tons A1, Light Commercial Vehicles

5 - 7.5 tons A2, Light Commercial Vehicles

7.5 – 12 tons B1, Medium & Heavy Commercial Vehicles

12 – 16.2 tons B2, Medium & Heavy Commercial Vehicles

> 16.2 tons B3, Medium & Heavy Commercial Vehicles

The below listed table give a brief of total number of buses produced by various OEM’s. Thepercent share of buses with GVW < 5 tons is highest i.e. 44% followed by 28% for 12-16.2tons.

Table 3-1: Bus production data for respective GVW

Year <5T 5–7.5T 7.5 –12T 12-16.2T >16.2T Total

Total Buses Produced (in number)

2006 64230 15831 4517 24411 0 108989

2007 55985 17868 4947 32433 0 111233

2008 50838 16333 6770 29135 21 103097

2009 45768 19430 8515 29292 78 103083

Total Buses Produced (in %)

2006 0.59 0.15 0.04 0.22 0.00 1.00

2007 0.50 0.16 0.04 0.29 0.00 1.00

2008 0.49 0.16 0.07 0.28 0.00 1.00

2009 0.44 0.19 0.08 0.28 0.00 1.00Source: Indiastat


On further classification of buses with GVW < 5 tons on the basis of seats:

Table 3-2: Bus production data for GVW < 5T

Year < 13 Seats > 13 Seats Total

Bus manufactured with GVW < 5 tons (in numbers)

2006 56791 7439 64230

2007 46795 9190 55985

2008 40289 10549 50838

2009 33575 12193 45768

Bus manufactured with GVW < 5 tons (in %)

2006 0.88 0.12 1.00

2007 0.84 0.16 1.00

2008 0.79 0.21 1.00

2009 0.73 0.27 1.00Source: Indiastat

So from this data we can say that though % share of buses with GVW < 5 tons is highest butmaximum proportion of it is of buses with GVW < 5 tons and seats < 13 seats. Also eventhough the % share of these buses are decreasing over the years but that of buses havingseats more than 13 seats is increasing continuously from 12% to 27% of total these segmentbus sales.

Table 3-3: Bus production figure and market share

Year <= 5T and > 13 Seats 5-7.5 T 7.5-12 T 12-16.2 T >16.2T Total

Total Buses Produced (in number)

2006 7439 15831 4517 24411 0 52198

2007 9190 17868 4947 32433 0 64438

2008 10549 16333 6770 29135 21 62808

2009 12193 19430 8515 29292 78 69508

Total Buses Produced (in %)

2006 0.14 0.30 0.09 0.47 0.00 1.00

2007 0.14 0.28 0.08 0.50 0.00 1.00

2008 0.17 0.26 0.11 0.46 0.00 1.00

2009 0.18 0.28 0.12 0.42 0.00 1.00Source: Indiastat

So from above table we can say that bus segment with GVW in between 12 – 16.2 tons islargest with 42 % followed by 5-7.5 tons. Also bus segment with GVW between 5 – 7.5 tonsand seat capacity more than 13 is growing continuously over the years.

Market experts estimate that the LCV segment will increase at an annual growth rate of 16%and M&HCV by 12%.


3.3.2.1 Less than 5 tonnes category (6-16 Seaters)

This category forms the 38.5 % of the total LCV sales (buses with GVW < 7.5 tons). Theleading company in this segment is Tata Motors with a share of 15.1% followed by ForceMotors with a share of 14.9% of the total segment sales. Tata Motors is continuouslyincreasing its share from 7.9% in 2006 to15.1% in 2009. The below listed table shows thevarious available models available from various OEMs in this segment:

Table 3-4: Models available for buses with GVW < 5T

Company Name 6 - 16 Seaters Length (in mm) Wheel Base (in mm)

Force Motors

Traveller Smooth 5885 3700

Traveller Mini Bus 4755/ 5235 3050/3350

Citiline 16 + D 3420

Citiline School Bus (16 + D) 3420

Traveller Ambulance 5235 3350

Traveller Luxury 5415 3350

Hindustan MotorsRTV Ranger

RTV School Bus

RTV Custom BusMahindra Mahindra FJ Minibus

Tata Motor

Magic 3790 2100

Winger Standard 4520 2800

Starbus 16 5125 2750

Winger DLX Non AC 4920 3200

Winger DLX AC 4920 3200

Winger Luxury 4920 3200Source: Company websites


3.3.2.2 5 – 7.5 tonnes category (17-35 Seaters)

This category forms the 61.4 % of the total LCV sales (buses with GVW < 7.5 tons). Theleading company in this segment is Tata Motors with a share of 40.1% followed by Mahindrawith a share of 7.26% of the total segment sales. This segment caters to the fast growingBPO industry, Executive staff and School Bus. The below listed table shows the variousavailable models available from various OEMs in this segment:

Table 3-5: Models available for buses with GVW < 7.5T


Force MotorsCitiline School Bus (25 + D)

Citiline (25 + D)

Commuter (32 + D)

MahindraMahindra Tourister

Mahindra FJ 470

Tata Motor

Globus 13 6235 3100

Globus 18 7355 3800

Starbus 20 5605 3100

Starbus 32 7395 3800

Starbus 18 CNG 5705 3100

Starbus Dlx 18 6400 3800



Starbus Skool 17 5910 3100


Eicher Motors

Eicher Starline Route Permit 7485 4050

Eicher Skyline Bus 7485 4050

Eicher Starline 10.5E 5800 3350

Eicher Starline 10.75H 7485 4050

Eicher Skyline Executive Bus 10.75H 7485 4050

Eicher Starline Standard 10.5E 5800 3350

Eicher Starline Standard 10.75H 7485 4050

Eicher 10.75E Bus Chasis 6365 3350

Eicher 10.75H Bus Chasis 7485 4050

Eicher 10.50C Bus Chasis 4885 2750

Eicher 10.50E Bus Chasis 5800 3350Ashok Leyland Stag BS II 7164 / 7644 / 8124 3600/3900/4200

Swaraj Mazda

Ambulance T3500/WT48D 4919 2515

Ambulance WV26 Model low/high roof 5509 2815

WT-50A NG Bus 6380 3335

WT-50L WB NG Bus 7348 3940


WR50 6380 3335

WT 50LB 7348 3940

WV-26 5548 2815

WT-48 4992 2515Source: Company websites


3.3.2.3 7.5 - 12 tonnes category (36-52 Seaters)

This category forms the 22.4 % of the total MHCV sales (buses with GVW > 7.5 tons). Theleading company in this segment is Tata Motors with a share of 11.7% followed by SwarajMazda with a share of 4.04% of the total segment sales. This segment caters to the needs ofCorporate, Intra-city bus and School Bus. The below listed table shows the various availablemodels available from various OEMs in this segment:

Table 3-6: Models available for buses with GVW < 12T


Tata MotorGlobus 20 8620 4200

Starbus DLX 35 8620 4200

Eicher Motors

Eicher Starline 10.90K 8677 4800Eicher Skyline 10.90 8677 4800Eicher Skyline Executive Bus 10.90K 8677 4800Eicher Starline Standard 10.90H 8677 4800Eicher Cruiser CNG School Bus 8677 4800Eicher 11.10H Bus Chasis 8080 4300

Eicher 10.90K Bus Chasis 8677 4800Ashok Leyland Lynx BS II 7486 / 7966 3900/4200Swaraj Mazda ZT54E-D-EL WB NG Bus 8660 4760Source: Company websites


3.3.2.4 >12 tonnes category (52-64 Seaters)

This category forms the 77.5 % of the total MHCV sales (buses with GVW > 7.5 tons). Theleading company in this segment is Tata Motors with a share of 37.88% followed by AshokLeyland with a share of 37.36% of the total segment sales. This segment mostly caters tothe needs of private operators and STUs for Inter-city travel. The below listed table showsthe various available models available from various OEMs in this segment:

Table 3-7: Models available for buses with GVW > 12T


Tata Motor

Globus 45 11950 6200

Starbus 54 10384 5334

Starbus 67 11950 6200

Starbus LF 11255 5875

Starbus ULF CNG 11980 6200


Eicher MotorsEicher 20.15 Bus Chasis 20.15M 10044 5340

Eicher 20.15 Bus Chasis 20.15N 11444 5840

Eicher 11.10K Bus Chasis 9475 4650

Ashok Leyland

12 M Bus 12000 6200

222 CNG Bus

Airport Tarmac Coach 11000 5200

Cheetah BS I & II 9575 / 9857 5156 / 5334

Double Decker 8890 5080

Panther Luxury 11070 5568

Viking BS I & II 10816/10325 5639/5334

Viking BS - II 10816/10325 5639/5334

Viking BS - III 10816/10325 5639/5334

Viking SLF BS - III 10960 5639

Viking CNG BS - III 10816/10325 5639/5334

12 M Bus - BS II 11800 6200

Cheetah BS – II 9575/9857 5156/5334

Cheetah BS – III 9575 5156

Panther BS – II 11070 5568

Vestibule Bus - BS III 16000Fr. axle to middle axle 4826Mdle axle to rear axle 7431.

Volvo IndiaVolvo 8400

Volvo 9400Source: Company websites


3.3.3 Application Based ClassificationFor buses classification done on the basis of application is mentioned below:

Type 1 Buses for intra city application

Type 2 Buses for stage carrier intra urban

Type 3 Inter city coaches

Type 4 Special Application (School, Tourist, Ambulance, Sleeper etc.)

As on 2006 data available from IndiaStat for the various type of bus registration in India’smajor cities is given in below listed table.

Table 3-8: Various types of buses registered in major metro cities in India

Cities Stage Carriages Contract Carriages Private Service Other buses

AHMEDABAD 19488 2831 2572 …

BENGALURU 10429 326 2479 …

BHOPAL 2704 55 … …

CHENNAI 3870 14051 1674 9021

COIMBATORE 869 430 549 1315

HYDERABAD 58 744 1235 748

MUMBAI 5536 4465 1402 853

PUNE 4998 2408 1208 278Source Indiastat

The below listed table list the various types of bus registration in Delhi as on 1st Jan 2009.

Table 3-9: Various types of buses registered in Delhi

Delhi: Permit Type as on 01.01.2009

1 Contract Carriage Permit (Including AITP) 10277

2 Inter State CC Permit 5435

3 Stage Carriage Permit 5632

4 School Bus Permit 106

5 National Permit 25760

6 Local Permit 29049

Grand Total 76259Source: http://transport.delhigovt.nic.in/transport/tr0g.htm#5

As per the central institute of road transport, buses play a dominant role in the passengertransportation among the different modes of transport available in roadways. The value isestimated to be about 41% of total roadways distribution. In India only 0.75 buses areavailable for every 1000 people in India whereas in Brazil 1.5 buses are being estimated.The growing demand is not only from cities but is also from other section of Indian economy.Indian government efforts to promote tourism have also given a major boost to luxury buses

http://transport.delhigovt.nic.in/transport/tr0g.htm#5


segment. For the detailed data available from various states and union territories and thetotal number of buses owned by public and private sector in India refer figure.

Chart 3-1: Number of buses in India


3.3.3.1 Intra City Service

This buses are use to travel within a city/ state. Mostly they have a seating capacity varying17-45. They are in great demand from institutional players, corporate, BPOs and STUs. Sofor our further analysis we may classify them into public and private sector on the basis oftheir possession type.

Public Bus Service

In India still public transportation is a preferred mode of transportation. It can be attributed tolarge low and middle class, low fare, high cost of owning, running and maintaining personalvehicle. But because of poor public bus service, people have started to shift from public topersonal mode of transportation. To overcome this emerging trend and to decongest theroads, government has started given the due attention to this sector. The upcoming metrorails, mono rails, BRTS and improved public bus fleet has somewhat started blocking thisemerging trend. As per the data available from Delhi metro, the daily commuters using metrorail service is 950000. Government is trying to install a hub and spoke model for metro rail,where LCVs will be use to ferry commuters to and fro from nearby metro station to their


destination. So market experts expect a great increase in demand for LCVs i.e. vehicleshaving seat capacity up to 30. Presently Delhi metro has 120 Non-AC and 300 AC buses.

The ever expanding boundaries of our cities because of increase in population have alsoincreased the demand for intra-city bus service. As per the report available from transportministry the average distance travel by a daily passenger is estimated at 60-80 kms per day.Considering Delhi, emergence of Greater Noida, Manesar, Sonepat as a satellite town willlead to an increase in demand for public bus service to these places. For eg for a routelength of 30 kms between Bhajan Pura (Delhi) and Noida (Uttar Pradesh), DTC is plying intotal 50 buses of which 15 are public and 35 private buses. For a route length of 34 kmsbetween Mehrauli (Delhi and Noida (Uttar Pradesh), they are plying in total 59 buses ofwhich 20 are public and 39 are private buses.

Private Bus Service

In this demand from corporate, executives, BPOs, IT/ITes plays a major role. Theemergence of SEZ/ EPZ/ Software parks on the outskirts of cities has provided a majorboost to demand for intra city bus service. As per the information available fromwww.sezindia.com, there are 580 formally approved SEZs of which 353 have been notified.The below drawn chart give an overview of the regional distribution for the same.

Chart 3-2: Region viz distribution of SEZs

Source: http://sezindia.nic.in/writereaddata/pdf/StatewiseDistribution-SEZ.pdf

NASSCOM has reported that the demand for IT professionals is expected to reach 430000by 2011-12 with the corresponding figures on indirect employment being 1,72,0000. Keepingin line with the expansion/entry plans of major IT/ITES companies, IT parks and townshipsare being built. As most of this software and IT parks are generally on the peripherals of thecities, so this will provide a demand stimulus for the air conditioned buses.

www.sezindia.com

http://sezindia.nic.in/writereaddata/pdf/StatewiseDistribution-SEZ.pdf


3.3.3.2 Inter City Service

These buses are used to travel between states or cities. Mostly they have a seating capacityvarying 40-64. They are available in different variants like Economy, Deluxe, Semi Deluxe,A/C Deluxe and Sleeper. Market experts expect a strong growth rate in this application.

Tourist Bus Service: Between 2000 and 2009, foreign tourist arrival in India has increasedby 48% from about 26 lakhs in 2000 to 51 lakhs in 2009. As per the annual report fromministry of tourism, air continued to be the predominant travel for the tourists coming toIndia. Arrival by sea is negligible and share of arrivals through land routes comprises touristmainly from Bangladesh and Pakistan. The percentage of tourist arrival by land route isestimated to about 3.7%.

Chart 3-3: International Tourist Arrival in India


For domestic tourism with in India growth rate from 2000 to 2008 is estimated to about156%. As per the latest figures available from ministry of tourism for 2008, domestic tourismis estimated at 562.92 millions. About 39.4% of domestic tourists use bus as a preferredmode of transportation. Average number of trips per household in the country was 1.17. Topfive states ranked according to trips per 1000 tourist households are Himachal Pradesh,Karnataka, Punjab, Madhya Pradesh and Maharashtra.


Chart 3-4: Domestic Tourist Visit in India


According to the information available from ministry of tourism for distribution of tourismaccording to mode of transportation 39.4% of domestic tourists and 3.7% of internationaltourists use bus as preferred mode of transportation. On analysing the available data fornumber of tourists arrived, we can say that nearly 55497292 annual bus trips are required.For detailed calculation refer appendix.

As on 31st Dec 2003, 186 travel agents, 340 tour operators, 154 tourist transport operatorsand 13 adventure tour operators are registered with ministry of tourism.

State Transport Undertakings (STUs)

Government sponsored JNNURM scheme has given a major boost to demand from variousstate governments. Improving road infrastructure and booming economy has increased thedemand for road transportation. Apart from this Supreme Court verdict to government tostrengthen up their fleet size so as to meet the increased demand has also work as a stimulifor the demand. Currently as far as interstate bus service is concerned, public sector is theleading player.


Chart 3-5: Fleet size of STUs in major Indian States


The above drawn graph shows the public sector buses in various major states of India.Under JNURM scheme various state governments have ordered a total of 11185 buses.Such orders include AC & non AC, low floor buses, semi low floor buses and mini buses.


3.3.3.3 Medical Service

Global standards talk about medical standards which would demand basic life supportsystems for patient within 15-20 minutes of an accident. India witnesses three lakhsemergencies daily. According to experts to meet the set standards of 2 ambulances per50km the country would require132000 ambulances.

Chart 3-6: Distribution of medical emergencies in India

Source: NCRE

Vehicles Classification: The below table highlights ambulance vehicle classification basedon application.

Type Application Features

1 Patient Transport Ambulance, (PTS) Stretcher, single long seat, non A/C, oxygen cylinder (optional),saline hook (optional), scoop stretcher for highway application(optional).

2 Basic Life Support System, (BLS) All PTS optional features are compulsory. Wash basin, medicalrack, doctor seat, A/C (optional), Defibrillator (optional), Suctionapparatus (optional)

3 Advance Life Support System(ALSS)

All BLS optional features are compulsory. Monitor(compulsory), ventilator, head immobiliser, individual seats,high intensity focus lights, ECG and other specific requirementsof the customer

4 Crash Ambulance (CA) 4-12 stretchers with hydraulic lifts used in airport/ factories/military accident recovery zone.

5 Specials like speciality diagnosticcentre, cardiac unit, dental vans,blood collection vans, mobile eyetesting centre.

Customised requirement.


Product Matrix

Category PTS BLS ALSS CA Specials

LCV (<7.5T) Force Travelller, Tata Winger, Maruti,Mahindra, AL Stag, Mahindra Tourister,Eicher 10.50, Swaraj Mazda

Not viable Body built on Tata, AshokLeyland and MahindraTourister chasis

LCV (>7.5T -12T) Not viable Not viable Body built on Tata 1109 and Eicher 10.75 chasisMCV (>12 – 16.2T) Not viable Not viable Body built on Ashok Leyland chasisHCV (>16.2T) Not viable Not viable Not presently available in India. Mercedes has a model in

other countries for airport/ military/ factories accidentrecovery zone.

Application Split: The emergency vehicles (BLS & ALSS) have the major share of morethan 60% due to emerging private profit and non-profit emergency service organizations.

Chart 3-7: Ambulance type distribution in India

Source: Race

Vehicle platform: Force motor has 70% of ambulance market in India followed by Tatamotors at 19%.

Current Scenario: The government and foreign investments on medical emergencyservices like ‘Call 1298’ in Mumbai has received $1.5 mn funding from New York AcumenFund, EMRI started in 2005 with $35 million from Satyam has increased the demand forambulance in India.

EMRI has planned to have 11000 vehicles by end of 2011 for India’s 1.1 billion populations.Today an ambulance is also positioned as a mode of increasing brand equity for thehospitals.


Changing Trends: Customers prefer a completely integrated vehicle that complies withindustry standards. This poses an important challenge and need for greater participationbetween major stakeholders like body builders, OEMs and equipment suppliers. Theprivatisation of emergency services in India has increased the quality of ambulances in India.Government has also drafted a bill for National Road Safety and Traffic management Board.It is proposed that a national road safety fund be created to make the board financiallyindependent.

Nashik based automakers body private limited is a leading manufacturer of ambulances,dental vans, blood collection vans and mobile eye clinic. It is planning an aggressive foray inboth domestic and as well as international market. It is under talk with companies based outof UK and Spain to fashion joint manufacturing arrangements for ambulances and medicalvans in India. The current Nashik plant has a capacity to manufacture 25 to 30 bodies amonth. Black Motors is also planning to venture into this application.


3.3.3.4 School Bus

Globally, school buses remain the safest form of surface transportation, far safer than cars,truck, public transport buses, or trains. School buses are designed and manufacturedspecifically for the safety and protection of the vulnerable passengers. However in today'sscenario a school bus is more than often looked as a commercial product, without regard forsafety, comfort, hygiene and reliability. The school bus market is expected to see an additionof 10,000-12,000 buses in 2009-10. Over a five year (2010-15) horizon, market expertsexpect a growth rate of 25 percent.

Vehicle Classification: In India, school buses are basically classified based on keyparameters like overall length, number of seats, power and comfort. The below tableillustrates the school bus market:

Table 3-10: School Bus classification

Range Length (in m) Seats HP Range ComfortLLCB < 5 m Upto 14 Upto 80 EconomyLCB 5-7 m, 8m 16 – 45 90 – 120 Economy, (NDX), SDX, DLX,

ACXMCB 9m, 11m, 12m 39 – 45 120 – 230 Economy, (NDX), SDX, DLX,

ACXHCB Upto 15m 36 – 64 160/180 – 230 Economy, (NDX), SDX, DLX,

ACX

Note: LLCB -Lowest Light commercial bus,LCB – Light commercial busMCB - Medium commercial Bus,HCB - Heavy commercial Bus

NDX: Non Deluxe Bus – bus designed for basic comfort levelsSDX: Semi Deluxe Bus – bus designed for a slightly highercomfort level and with provision for ergonomically designedseats.DLX: Deluxe Bus – bus designed for a high comfort level andindividual seats and adjustable for seat back, improvedventilation and pleasing interiors.ACX: A. C. Deluxe Bus – Deluxe Bus which is air conditioned

Current Scenario: India already has 5 lacs schools and colleges across India and theschool bus penetration level is estimated to be just 20%. Add to this, the growing number ofprivate schools and colleges being added every year and the potential for the school bussegment is huge. This segment has been growing at a CAGR of 10-15% from the recentpast.

Source: Commercial Vehicle Magazine, April 2010, pg 23.


Major OEM’s who have already penetrated the school bus market include Tata Motors,Ashok Leyland, Mahindra Navistar, VECV and Swaraj Mazda. The below listed charthighlights the market share of major OEM’s, where Swaraj Mazda is a market leader with35% market size, followed by VECV with 30% and Mahindra Navistar with 20% in 2009-10.

Demand Review: The Indian school bus market is estimated to be worth some 10000 –15000 units each year on total bus sales of some 60000 units. According to industry expertsof the 3 lacs school in India, only third of them use schoool buses. Since children need to bepicked up from multiple points on school route, so they predominantly demand ‘functional’15-40 seaters (5-9 tonnes) mini buses. According to the experts, the size of 7 -11 m schoolbus is only about 4000 units.

The below listed table gives an overview of the various available options in this segment.

Table 3-11: Popular available options for school bus application

Company Name Model Name Seat Capacity GVW (in kg)

Ashok Leyland

Stag BS II Fully Built 28 + D

750034 + D

Stag BS III Fully Built 28 + D34 + D

Stag 40 + D 9300

Lynx BS II fully built 37 + D

1100041 + D

Lynx BS III fully built 37 + D41 + D

Lynx 49 + D 10850

Swaraj MazdaSartaj

25 – 40 7.5 – 10PrestigePestige AC 14 – 15

VECV – Eicher

Skyline 10.75H 34 + D 7450Skyline 10.90K 40 + D 8720Starline 10.50E 25 + D 5400Starline 10.75H 32 + D 7450Starline 10.90K 40 + D 8720

Mahindra Navistar

Tourister 25 5440Tourister 32 7450Tourister 40 7850Tourister CNG .. 5700Vikrant 14 + D 3550

Tata Motors

Starbus Skool 16 4800Starbus Skool 20 5300Starbus Skool 24 6520Starbus Skool 36 7490Starbus Skool 40 9000Starbus CNG 40 9400Starbus Skool 52 14160Winger School Van .. 2670

CERITA/JCBL

Low Floor .. 16200Guide .. ..Pride .. ..Wish .. ..

Source: Motorindia Magazine, March 2010

The extent of fully built school bus is 80-90%. Their is a huge demand for more compactschool buses. Take Force Motors Traveller for instance.


Changing Trends and Way Forward: City limits are getting expanded and parents want tosend their children to the best educational institutes. According to a survey, the averagedistance travelled by a student today is 11 km. This distance is only expected to rise in thenear future. Also school bus as a product is becoming a mobile building tool for most schooland colleges.

S. S. School Transport (P) Ltd. is a dedicated fleet management company based inChennai for school transportation. Currently they have a fleet size of 75 with 3000 studentsusing this service. Mr Shivarman, MD S. S. School Transport, in his interview with CVmagazine has sad that they plan to scale up their fleet size to 300. Some of these ideas maybe getting support from government.

The recent guidelines from the Maharashtra government in January 2010, hasspecified transportation of students by school bus to be made mandatory in all school inMumbai for the academic year.


3.4 Growth Driver

The surrogate variables taken to estimate the growth rate for luxury bus segment are: Increasing Urbanization Government Support Improving Road Infrastructure Special Economic Zones

Increasing Urbanization: The people in rural areas have started migrating to urban areasdue to which there is urban congestion and also the cities are expanding leading to whichthere is a need for intra-city, special application buses like institutions etc and therebycreating an attraction towards mass transport which is also economical. The below listedgraph show the projection for the population lives in urban.

Chart 3-8: Urban Population growth rate

Source: Indiastat Database

Indian economy is witnessing a strong year on year GDP growth rate. It has lead to anincrease both in per capita income and consumption.

Table 3-12: Major Indian Economic Data

Particulars 2005-06 2006-07 2007-08 2008-09 2009-10

GDP at Market Prices 9.3 9.4 9.6 5.1 6.8Per capita income 7.6 7.9 8.1 3.7 5.3Consumption (Private) 9.0 8.2 9.8 6.8 4.1Consumption (Govt) 8.3 3.8 9.7 16.7 8.2Source: Indiastat Database


Government Support: There are large numbers of government schemes that have beeninitiated to improve infrastructure. Under JNNURM-I government has allocated about Rs50000 crores for urban infrastructure. It will increase the demand for intra-city buses. Nowgovernment has initiated JNNURM-II and has allocated about one lakh crores rupees whichwill act as a strong driver for inter-city and intra-city buses from all over the country. Apartfrom this, as part of this scheme bus transport system is being developed. And under NHDPand RIDF both urban and rural infrastructure in terms of roads, highways and bridges isbeing undertaken.

Improving Road Infrastructure: As per the latest information available from the ministry oftransport and surface, length of national highway has been increased by about 33% i.e. from49585 kms in 2000 to 65590 kms in 2008. It will be further increased because of governmentsponsored schemes like golden quadrilateral, North – South and East - West corridor andmany more. All these initiatives will enhance the passengers to travel long distance throughroadways.

Special Economic Zone: As per the information available from ministry of commerce andindustry, there are nearly 568 formally approved and about 291 notified SEZ’s as on 31st Mar2009 in India. This is going to increase the demand for buses in India from corporate sectormovement.


3.5 Emerging Trends in Bus Market

The luxury bus segment in India is expected to be around 25,000 to 30,000 units per annum.Customers in this segment mostly buy chasis from the manufacturer and build the busbodies at an independent body building unit. The topless luxury segment is estimated to bearound 500-600 units per annum.

The leading Indian commercial vehicle manufacturers have line up a capacity expansionprogrammes for the upcoming years

Manufacturer Capacity Expansion (nos) Investment (Rs bn)Tata Motors 70,000 3.50Ashok Leyland 25,000 5.00M&M-ITEC 25,000 3.70Force & MAN 24,000 6.75Swaraj Mazda 24,000 2.50Volvo NA 15.00

To tap this market international leading players have formulated their market entry strategy.Volvo which soon expects a whooping sales figure of around 1000 buses in India haveshown there keen interest to bring in their articulated buses into India. The population ofVolvo in India is expected to exceed 2000 units by Jan 2010. Volvo India is partner with ninemajor cities including Bangalore, Chennai, Pune, Hyderabad, Mumbai andThiruvananthapuram, for supply of modern buses for city and inter-city transport system.Recently Volvo has made its foray into North India with a committed supply of 15 buses forFaridabad inter-city bus service. Kolkata too will get 60 Volvo buses and; Gujarat andKarnataka are going to introduce there sleeper coaches in their respective inter-city busservice.

Turkish bus maker Temsa has also reinforced its commitment to India. So far as India isconcerned, Temsa is to locally manufacture its Safari RD integral coach, most likely incollaboration with auto component major, JBM group.

Swedish CV maker Scania is currently undertaking a feasibility study to examine thepossibility of entering the Indian bus market. Indications are that an intercity coach may beon Indian roads by 2011. Currently company sells the P380 mining tipper in India, inpartnership with L&T.

Irizar-TVS, a joint venture company of Ashok Leyland, T V Sundram Iyengar & Sons Ltd,and Irizar S Coop of Spain, has opened its new state of art facility at Viralimalai near Trichy.The new facility has a capacity to produce 180 buses per month. With this Irizar-TVS hasexpanded its capacity from 1200 to 2200 buses per annum. They have the capacity andexpertise to build the complete range of buses, starting from top end luxury coach to lowfloor and semi low floor city buses. Ashok Leyland has targeted sale of 18000 to 20000buses during 2010-11, of which 50-60 percent will be fully built buses. In the next 3 to 4years percentage of fully built buses could increase it to 90%. Irizar-TVS has also launchediT09 luxury coach for inter city transportation.


Mercedes-Benz has developed its bus platform specially suited to the Indian requirement. Ithas launched its much-awaited 3-axle intercity luxury coach which comes with its O 500RSD 2436 chassis and the body assembled by the Indian partner company Sutlej MotorsLtd.

Ashok Leyland had launched a luxury vehicle, Exuba, priced at Rs 3 millions. The vehicle isaimed at the tourism industry and institutional buyers. It also targeted the film industry andadventure seekers. The company had plans to produce only 400 Exubas annually at itsHosur plant. Lately, the company is coming up with CNG-fuelled CVs.

Some of the ongoing bus projects are listed in table given below.

Table 3-13: Ongoing bus project as on June 2010

Company Name Project Name Project Cost(in Rs cr)

Ashok Leyland Ltd. City Buses Project N.A.Caparo India Pvt. Ltd. Luxury Bus Manufacturing Facility Project 80Electrotherm (India) Ltd. Hybrid Buses Project 100Force Motors Ltd. Pithampur Buses Project 1845Irizar T V S Ltd. Viralimalai New Assembly Line Project 30Swaraj Mazda Ltd. Bus Manufacturing Project 260Ural India Ltd. Haldia Eighty Seater Bus Manufacturing Project 150Ashok Leyland Ltd. Alwar Bus Body Building Project 40Automobile Corpn. Of Goa Ltd. Bus Bodies Expansion Project 17.87Volvo India Bus Technologies Ltd. Hoskot Bus Body Project 80Ahmedabad Municipal Corpn. Ahmadabad Brts Phase-I Project 500Andhra Pradesh State Road Transport Bus Purchase Project 400Bangalore Metropolitian Transport Corpn. Volvo Bus Project N.A.Brihan Mumbai Electric Supply & Transport Fleet Expansion Project N.A.Brihan Mumbai Electric Supply & Transport Mumbai Fleet Expansion Project 320Delhi Transport Corpn. New Buses Acquisition Project 1800Government Of Uttar Pradesh Agra Eco-Friendly City Bus Service 260Government Of Uttar Pradesh Ghaziabad CNG Bus Service To Metro Stations 10Gujarat State Road Transport Corpn. Fleet Expansion Project 153Source: CMIE database


4 Bus Air Conditioner: Demand Measurement

Companies can prepare as many as 90 different types of demand estimates. Demand canbe measured for six different product levels, five different space levels, and three differenttime levels. Each demand measures specific purpose.

Spac

e Le

vel World

India

Region

Territory

Customer

Prod

uct

Leve

l All Sales

Industry Sales

Company Sales

Product line salesProduct ItemSales

Short Run Medium Run Long RunTime Level

The size of a market hinges on the number of buyers who might exist for a particular marketoffer. But there are many productive ways to break down the market:

The potential market is the set of consumers who profess a sufficient level of interest in amarket offer. Potential consumers must have enough income and must have access toothe product offer.

The available market is the set of consumers who have interest, income and access to aparticular offer. The eligible adults constitute the qualified available market – the set ofconsumers who have interest, income, access and qualification for the particular marketoffer.

The target market is the part of qualified available market the company decides topursue. The company will end up selling to a certain number of buyers in its targetmarket.

The penetrated market is the set of consumers who are buying company’s product.

4.1 Air Conditioned Buses Classification

4.1.1 AC SleeperAC Sleeper buses provide dual comforts of an AC bus with sleeper berths. AC Sleeperbuses are today the most preferred bus type for long distance road travel. Operating mostlyas overnight buses on road routes across states, interstate AC sleeper bus services connectmajor cities across various regions. AC Sleeper buses are specially designed for acomfortable bus travel experience and like trains have berths instead of seats. Eachpassenger is assigned a berth to sleep on during the journey. Most sleeper buses feature


bunk beds with two or three berths each and feature window curtains as well. Commercial,religious as well as major tourist destinations are connected to metropolitan cities by sleeperbuses amongst others. The air conditioning ensures passengers enjoy a pleasant bus ride totheir preferred destination, unaffected by weather conditions outside the AC Sleeper bus. ACSleeper buses are available on all important road routes, connecting all main cities to majortourist, commercial and religious destinations. AC bus services are available from all majorcities including Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Pune, Ahmedabad, Kolkataand many more. For the most convenient booking experience, book your AC Sleeper bustickets online and enjoy a hassle free experience. Opt from a range of bus operators whileyou book your AC Sleeper bus ticket through the online bus ticket booking system. You canas opt for your preferred berth and get your confirmed tickets instantly.

4.1.2 AC BusAC bus services are offered by state road transport corporations as well as private busoperators and bus travel companies. Air conditioned buses generated a wave of relief whenthey were introduced into the passenger road transport industry over two decades ago. Priorto that, passengers had to bear the extreme weather conditions prevalent in the regions thatthey travelled across. Ever since the introduction of AC bus services, passengers enjoy apleasant bus ride to their preferred destination, unaffected by weather conditions outside theAC bus. For a comfortable travel experience, AC buses are fitted with upholstered seats thatcan be reclined. Windows have curtains to block out the sun while some AC buses also playmusic or movies for entertainment of passengers. AC buses are available on all importantroad routes, connecting all main cities to major tourist, commercial and religiousdestinations. AC bus services are available from all major cities including Delhi, Mumbai,Bangalore, Chennai, Hyderabad, Pune, Ahmedabad, Jaipur, Kolkata, Chandigarh, Shimla,Agra, Dehradun and many more. Even smaller towns are connected by interstate AC buses.For the most convenient booking experience, book your AC bus tickets online and enjoy ahassle free experience.

4.1.3 AC Sleeper SeaterWith increasing demand for modes of road transport, design concept for buses are changingrapidly with concentration on increasing seating capacity and yet offering comfort andconvenience. The latest combination of the two has resulted in the introduction of airconditioned seater cum sleeper buses that offer passengers the choice of seats and berthswithin the same bus. A typical seater cum sleeper bus has two rows of seats that regularbuses feature and in addition it also features a row of berths above the seats on each side ofthe aisle. In seater cum sleeper buses, the overhead luggage storage space is missing,hence passengers would be required to submit their baggage to be kept in the externalluggage storage compartments. Since the fare for a seat is less than that of a berth in aseater cum sleeper bus, depending on their budget and duration of travel, passengers cannow opt for either a seat or a sleeper berth on seater cum sleeper buses. The airconditioning ensures passengers enjoy a pleasant bus ride to their preferred destination,unaffected by weather conditions outside the bus. Private bus operators in various


metropolitan cities as well as small towns offer seater cum sleeper bus services that run onmost road routes connecting major cities.

4.1.4 Volvo ACWith the introduction of AC Volvo bus services on major important road travel routes, bustravel in the country has come of age. The air conditioned Volvo buses are the most popularmode of public transport amongst the metropolitan travellers. The super luxury AC Volvobuses by Swedish auto company Volvo offer spacious reclining seats with adequate legroom to stretch out besides additional comforts like window curtains and matted screens toblock out light. Features such as overhead reading lamps, powerful air conditioning withindividual controls and superior air suspension make the AC Volvo buses ideal for longjourneys where comfort is of utmost importance. Most new AC Volvo buses also offerentertainment options like dual LCD screens for better viewing besides central audio systemfor music. AC Volvo bus services are available on major intercity and interstate routes andfrom all major cities including Delhi, Bangalore, Chennai, Mumbai, Hyderabad, Pune, Jaipur,Ahmedabad and many more. While some state road transport corporations like that ofRajasthan and Himachal Pradesh offer AC Volvo bus services, most other routes arecovered by private bus operators. The online booking system is the most convenient forbooking AC Volvo bus tickets as it allows you to choose from a range of bus travel operatorsas well as choose your preferred seat.

4.2 Bus Air ConditionerThe penetration level of bus air-conditioning is approximately 4-6 per cent, which is low byinternational standards, but has increased from less than 2 per cent, in a period of the last 5years. Industry experts estimate that it is likely to grow at 35% growth rate in coming years.

The Golden Quadrilateral highway network and the introduction of fully built luxury buses bylarge OEMs, as well as the entry of foreign bus manufacturers, has led to a quantum jump inthe quality of buses. More and more passengers are discovering the comforts of airconditioned bus travel in city transport and in intercity travel, and passenger expectations arerising. The increase in grants for the JNNURM scheme announced by the IndianGovernment in the Budget will ensure that demand for bus air-conditioning compressors willcontinue to remain strong going forward.

Bus air conditioner demand is directly related to overall expectation of air conditioning inhomes, offices, cars and shopping centres.

4.2.1 Home/ Office Air ConditioningThe CMIE Cospi Index for air conditioners & refrigerators stands at 1541.43 in May 2010.CMIE Cospi Index is a set of 2500 companies with high stock market liquidity and gooddisclosure. It is weighted by market capitalisation


Chart 4-1: Weighted market capitalisation for Air-Conditioner & Refrigerator Industry

Source: Business Beacon

The above graph shows a strong growth rate in this sector over the last year.

Table 4-1: Household appliances industry size

Value (Rs billion) 2006-07 2007-08 2008-09

CTV 96 96 110Refrigerators 41 48 51Room Air conditioners 33 42 47Washing machines 16 20 21Household appliances 186 206 229

Source: CRISIL Research

Analyzing the above listed table we can say that there is a huge increase in demand for air-conditioners and refrigerators.

4.2.2 Automotive Air-conditioning IndustryThe Indian Automotive Air-conditioning is a niche industry, with few established players suchas Subros (market leader), Visteon, Behr, Sanden and Denso, and with new entrants likeCalsonic. The industry operates at an approximate capacity of 1.5 million units, in whichSubros currently has the leading market share of 41%. The competition in the industry isintensifying, with players facing pricing pressures in the past few years. The Auto Air-conditioning industry volumes are primarily driven by sales to OEMs (97-98%), and theresidual sales are based on replacement market demand.


Chart 4-2: Automobile Air Conditioner Projection

Source: Company, Angel Research

4.2.3 Shopping CentreThere has been a spiralling growth in the number of shopping malls in India from none in2000 to nearly 100 within five years, most malls Mumbai which has share of 31% andthen Delhi NCR which has share 21%, with 360 malls anticipated across India by 2007 andup to 600 malls by the end of 2009. Bangalore accounts for another 15%. Even Hyderabadand Kolkata have a 12% chunk each in the country’s mall space. The growth was fuelled byrising incomes, greater availability of credit and busier lifestyles.


4.3 Analysis

4.3.1 MethodologyTo validate the reasoning for increase in demand for AC Buses data for per capita GDP,Industrial Refrigerator & Air conditioning production and cooling tower produced will be used.

Table 4-2: Data for Air Conditioner surrogate variables

Year Per capita GDPfc Refrigerators & air-conditioning production Cooling towers productionUnit Rupees Rs.lakh Rs.lakh

Mar-00 17847.41 7332.86 14070

Mar-01 18891.24 6027.76 12546

Mar-02 20170.44 4894.76 13980.66

Mar-03 21414.91 4758.89 14197.7

Mar-04 23676.96 5298.58 15186

Mar-05 26425.17 5370.07 22729

Mar-06 29677.98 6351.22 20538

Mar-07 33684.36 7747.78 28314

Mar-08 37969.17 9668.2 37551

Mar-09 42748.55 12064.15 54661

Mar-10 11751.57 43668Source: CMIE Database

Cooling towers common applications include cooling the circulating water used in oilrefineries, chemical plants, power stations and building cooling. So they may be use toestimate the market demand trend for institutional cooling.

4.3.2 Data AnalysisBivariate Correlation would be use.


4.3.3 Result

Correlations

Per_Capita Refrigerant Cooling_Tower

Per_Capita Pearson Correlation 1 .833** .948**

Sig. (2-tailed) .003 .000

N 10 10 10

Refrigerant Pearson Correlation .833** 1 .921**

Sig. (2-tailed) .003 .000

N 10 10 10

Cooling_Tower Pearson Correlation .948** .921** 1

Sig. (2-tailed) .000 .000

N 10 10 10

**. Correlation is significant at the 0.01 level (2-tailed).

The above listed figure shows the correlation output between per capita income, coolingtower production and air conditioner production. From these figure we can conclude thatthere is a strong positive correlation between per capita income and refrigerant and that thiscorrelation is significant at the significance level of 0.01. Also same is true for correlationbetween cooling tower and per capita income.

So higher is the per capita income, higher will be the demand for domestic air conditioner &refrigerator and commercial cooling tower. Using these we can also infer that there would behigher demand for commercial air conditioned buses too.

.



5 Analysis – Customer Market

Customers tend to be value-maximizers, within the bounds of search costs and limitedknowledge, mobility and income. They estimate which offer will deliver the most perceivedvalue and act on it. Whether or not the offer lives up to expectation affects customersatisfaction and the probability that he or she will purchase the product again.

Customer perceived value is the difference between the prospective customer’s evaluationof all the benefits and all costs of an offering and the perceived alternatives. The seller mustassess the total customer value and total customer cost associated with each competitor’soffer in order to know his or her offer rates in the buyer’s mind. The seller who is at acustomer perceived value disadvantage has two alternatives: to increase total customervalue or reducing the buyer’s cost.

Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing aproduct’s perceived performance in relation to his or her expectations. If performance fallsshort of expectations, the customer is dissatisfied. Customer’s form their expectations frompast buying experience, friends’ and associates’ advice and marketers’ and competitors’information and promises.


5.1 Customer DistributionIn Indian bus market though OEMs (Ashok Leyland, Tata Motors, Swaraj Mazda, Eicher etc)have started offering fully built buses but still the large chunk of bus market pie lies with busbody builders. Here customer buys a bus chasis from the OEM and then he get the bus bodybuilding done as per his requirement and for a luxury bus he also chooses the air conditionerunit supplier. So for a luxury bus in total three independent parties come into picture – BusChasis Manufacturer, Bus Body Builder, Bus AC Supplier. To identify the customerdistribution across the country, we can take coach work factories as a proxy for them.

So we may study: Region wiz number of coach work factories in operation. Workers employed in factory. Gross Output of factory

For our further analysis we have classified the states of India into four regions i.e. North,South, East and West. The classification is as per the below listed table.

East North South WestJharkhand Uttar Pradesh Andhra Pradesh RajasthanBihar Haryana Tamil Nadu Madhya PradeshAssam Delhi Kerala Gujarat

Goa Maharashtra

5.1.1 Coach Work FactoriesAs per the data available from CMIE Database, as on 2005 there were 342 registered bodiescoach work factories in operation.

Table 5-1: Number of coach work factories in operation

State Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05Jharkhand 12 7 7 17 10 11 11Assam 3 3 3 3 3 3 3Uttar Pradesh 10 9 12 31 5 7 16Punjab 15 19 30 20 27 24 21Haryana 5 10 11 9 7 8Delhi 6 3 3 7 18Andhra Pradesh 24 54 32 40 45 43 49Tamil Nadu 31 32 32 31 57 51 40Kerala 5 4 3 3 12 10Karnataka 49 32 20 28 19 19 23Goa 3 3 3 3 3 4Rajasthan 19 13 14 17 13 15 14Maharashtra 160 118 76 78 43 51 85Madhya Pradesh 19 42 41 26 20 18 18Gujarat 13 11 5 9 10 11 7Source: CMIE Database

On analysing the data we have found that there were 126 coach building factories in SouthRegion, 124 in west, 63 in North and 14 in east. Maharashtra has the highest number of


coach building factories i.e. 85 in India. So we can say that that South and West IndianRegion are most popular region for coach building. It may be because of large customerbase in this region.

5.1.2 Workers EmployedNumber of coach building factories cannot be taken as a proxy of large customer base, as itmay be the case that the installed capacity across them varies a lot. So to overcome this wewill study the employee strength in these factories.

Table 5-2: Employees employed in coach building factories

State Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05Andhra Pradesh 959 1301 866 1185 1537 1420 3198Assam 157 143 144 142 128 105 133Bihar 27Delhi 21 55 39 68 254Goa 37 92 72 82 79 72Gujarat 172 1083 723 1279 1806 735 543Haryana 356 6917 5967 669 600 4026Karnataka 1442 2740 552 1577 1191 1449 1926Kerala 52 60 65 64 179 119Madhya Pradesh 322 2346 1048 830 843 1018 2119Maharashtra 4931 6300 3772 3927 5135 4136 4603Punjab 681 1021 1171 985 2433 2540 1529Rajasthan 857 563 397 1183 926 936 1034Tamil Nadu 7824 1074 2174 2176 4205 4453 4475Uttar Pradesh 0 210 914 543 137 396 393Jharkhand 738 523 1171 1145 789 1492 1388Source: CMIE Database

In South India maximum number of employees i.e. 9790 were employed in coach workfactories. It was followed by west region which had 8299 employees, then north region at6202 and then east region at 1521. So it again strengthen our belief that south and westregion have the highest commercial vehicle demand in India.

5.1.3 Gross OutputTo identify the relative size of market we can study the gross output of coach work factories.

Table 5-3: Gross Output (in lakhs) of coach work factory

State Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05Assam 429 421 337 284 298 302 323Jharkhand 1970 3262 3156 3394 3505 6360 6686Bihar 198Uttar Pradesh 0 1493 5330 2897 556 3140 3288Punjab 3562 3618 6285 6252 43563 56612 11825Haryana 2585 651039 711172 5661 6091 1126672Delhi 148 278 69 139 1354Karnataka 5593 15440 2677 7522 8670 17812 16311Kerala 100 127 116 105 1927 198Tamil Nadu 13708 2426 5018 3369 5304 13442 15868


Goa 102 270 321 427 490 785Andhra Pradesh 1291 3757 3399 3119 5373 6439 23712Rajasthan 1284 2127 1152 3475 3197 4215 48411Maharashtra 33150 36678 21637 18090 20237 36066 53046Madhya Pradesh 749 5794 2765 2888 2985 5148 11321Gujarat 855 7290 2262 8086 42427 6402 6125Source: CMIE Database

Analyzing the data we can see that the relative size of northern region is highest i.e.1143139 lakhs followed by west region at 118903 lakhs. Haryana has emerged out as amarket leader in terms of gross sales at Rs 1126672 lakhs. Also the gross value of plant andmachinery for Haryana is highest i.e. Rs 449737 lakhs followed by West Bengal at Rs 19263lakhs.

Table 5-4: Gross value of plant and machinery

State Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05Assam 28 33 29 30 30 31 33West Bengal 1960 19463 19345 19402 19447 19414 19263Jharkhand 65 162 261 348 366 895 573Haryana 314 353620 402921 802 743 449737Punjab 306 1780 1786 1822 4261 4586 2512Uttar Pradesh 0 8 1877 1002 103 599 392Tamil Nadu 5185 661 638 535 668 705 690Kerala 0 0 0 4 5 111 10Karnataka 496 706 267 529 464 979 1485Andhra Pradesh 83 171 342 27 317 504 364Goa 1 31 35 37 39 38Madhya Pradesh 70 1400 665 752 1879 2024 4397Maharashtra 34498 34084 32721 36395 96083 41414 9273Rajasthan 55 136 173 84 293 161 682Gujarat 574 80 98 1126 710 1696 116Source: CMIE Database


5.2 Customer Value AnalysisTo identify the major attributes, performance and benefits levels the customer looks for inchoosing a product survey was conducted.

5.2.1 Research Methodology

5.2.1.1 Sampling MethodThe participants for this research will be AC bus body builders, institutional bus buyers andprivate bus operators. In Delhi there are 26 bus body builders both registered and non-registered. Out of these only 13 bus body builders manufactures air conditioned buses. Thecontact detail and address of all these body builders is given in below listed table.

Table 5-5: Delhi AC Bus Body Builder Contact List

Company Name Address

Azad Body Builder Sanjay Nagar, Gulabi Bagh

Golden Coach Builders Near Gurudwara Nanak Piao

Jagan Coach Builders H. O. 78, Sukhdev Vihar

Sheena Enterprises C-132, Naraina Indl Area – I

Bright India Body Builders 1 Surat Nagar, Near Nanak Piao

Guru Ram Dass Body Builders Naresh Park Extn, Najafhgarh Rd

Puran Singh & Sons Plot No 2, Niranjan Park, Nangali Dairy

Bishan singh & Sons A-95/6, Wazirpur Industrial Area

Rama Automobiles A-15, Wazirpur Industrial Area

Rama Coach Industries A-17, Wazirpur Industrial Area

Baldev Body Builders D-12, Tpt Centre, Timarpur

New Dhanjal Body Builders 18-B Gokhale Market

Raja Coach Builders Janta Bus Body Market, Mandoli

For our research all of these 13 AC bus body builders will be approached.

In Delhi there are large numbers of AC Bus operators for which no complete information isavailable. For AC Bus Private Operators snowball sampling will be used. This samplingmethod is generally use when researcher does not have access to sufficient people with therequired characteristics. So here we ask them to refer other people who fit our studyrequirements, then follow up with these new people. For institutional buyers and competitorssales person judgment sampling approach will be followed.

5.2.1.2 Sample SizeRespondent Classification Sample Size

Bus Body Builders 13Institutional Bus Buyers 27Private Bus Operator 29Competitor Sales Person 8


5.2.1.3 Data CollectionFor Bus body builders, institutional buyers and private bus operator primary data wascollected through questionnaires. A questionnaire was prepared, containing fifteenquestions. A pilot survey was conducted with 3 bus body builders in Delhi. Their inputs wereincorporated to prepare the final questionnaire. The data collected was analysed andinferences were drawn, as discussed in the next section. The questions in the questionnairewere designed using Nominal Scale and Ordinal Scale. Sample questionnaire is beingattached in Appendix.

For company sales person personal interviews were conducted.

5.2.1.4 Data Analysis Descriptive statistics. Cluster Analysis

5.2.2 ResultsOut of approached persons only 9 bus body builders, 4 sales person, 5 institutional buyersand 11 private ac bus operators agreed to participate in our study.The participants for this survey were bus body builders, institutional bus buyers and privatebus operators. During this survey questionnaire approach was being followed.

It was observed that bus body builders have lesser role in purchase decision. Most of thetimes they are guided by customer himself about the brand of ac to be install. But ifsometimes customer is quite confused while selecting then they do recommend them. Salesperson of different available brand do visit them on continuous basis and offer them themargin money on amount of sales they have helped in.

Institutional buyers and Private bus operators have rated cooling efficiency and after salesservice as the most important factor they consider while selecting a particular make of busAC.


The result of cluster analysis is being attached in Appendix.

Table 5-6: Result of Cluster analysis

Cluster Number Respondent TypeInstitutional/ Private Attribute

1Institutional (School) Fleet Size < 5, Experience< 5 yearInstitutional (School) Fleet Size < 10, Experience < 5 year

2

Private Fleet Size < 5, Experience < 10 yearPrivate Fleet Size < 10, Experience < 5 yearPrivate Fleet Size > 15, Experience < 5 yearPrivate Fleet Size < 10, Experience < 10 yearPrivate Fleet Size < 10, Experience < 15 year

3

Institutional (School) Fleet Size < 20, Experience < 10 yearPrivate Fleet Size < 5, Experience < 10 yearPrivate Fleet Size > 20, Experience > 20 yearPrivate Fleet Size < 5, Experience < 5 yearPrivate Fleet Size < 5, Experience < 5 year

4Institutional (School) Fleet Size < 5, Experience < 5 yearInstitutional (School) Fleet Size < 5, Experience < 5 yearPrivate Fleet Size < 5, Experience < 10 year

On analysis we have found following attributes for different clusters.

Table 5-7: Cluster Vs Population Attribute Mapping

Attributes Cluster1 2 3 4

After Sales Service 1 1 1 1 OrderQualifierCooling Efficiency 1 1 1 1

Body Builder Recommendation 1

OrderWinner

Peer Recommendation 2 1Brand Name 1 1Maintenance Cost 1 1 2Mileage 1 1 1Product Price 1 1

Colour Coding 1 Very Important

2 Important

From above table we can say that institutional buyer gives high importance to bus bodybuilders and peer recommendation. It can be explained because of their less experience andalso they are not very regular in making purchase decision. So they are not updated withlatest happenings and offers. Because of all these they rely on others to help them in makingdecision.


But private operators are well informed. They look around in whole available range ofoptions while making purchase decision. They most of the time rely on there knowledge ofindustry and hence are less dependent on others recommendation.

Five Competitor Sales person had agreed to participate. For them personal interview wasconducted. They have highlight following as order qualifier for a customer After Sale Support Product Reliability Part Availability Part Pricing Cooling Efficiency.

5.2.3 ConclusionBus air conditioner customer values cooling efficiency and service quality as the mostimportant attributes while making purchase decision. So we can classify these two as orderqualifier. Apart from this he also looks for maintenance cost, mileage, price andrecommendation. These can be classified as order winner. These parameters matter todifferent degrees for different type of customers as per his needs.


5.3 Customer Satisfaction MeasurementIn previous section we have observed that service quality and cooling efficiency plays a roleof order qualifier. Cooling efficiency is a product attribute whereas after sales service(contemplated, expected and received) is different from perception of quality (contemplated,expected and received) of after sales service. In this section we would study

Is there is any mark difference for after sales service expectations across the two groupi.e. institutional buyer and private operators.

To identify the key after sales service component.

5.3.1 Literature ReviewPerception of quality may differ radically from actual quality of the events comprising theservice. Customer criteria determine the definition of quality and variables that affectperception of quality. The variables may change with circumstance, experience and time.Service providers may influence the variables that drive customer perception of servicequality, or may influence perceptions of the value of components contributing to thecustomer’s perception of expected service quality.

The total perceived value of a service comes from two sources. First, customers perceivevalue that originates from service act itself. Second, customers perceive value that originatesfrom the quality of service act.

According to Saccani et al (2005) in order to evaluate after-sales performancecomprehensively, different levels of analysis (business unit, processes and activities,organisational units) as well as different performance dimensions (financial and non-financial, effectiveness- and efficiency-oriented, short-term and long-term oriented) have tobe taken into account.

At the strategic business area level, the overall after-sales financial performance isconsidered. It can be measured by indicators such as operating profit, ROA, ROI, etc. It simportant to stress that the financial results are generated both by market results (marketshare, market penetration, etc.) that impact on revenue, and by the efficient consumption ofresources (costs). The second level of the framework is the process one. According to Lynchand Cross (1991), process performance can be measured with regard to customersatisfaction, flexibility and productivity. The third level considers the performance of the after-sales organisational unit in dealing with its specific activities. It is useful to distinguishbetween front office activities, impacting directly on customer satisfaction, and back officeones, which are responsible for efficiency and lead times. Five performance dimensions atthe activity level are considered: reliability, responsiveness, internal lead times (which aremainly measured by non financial indicators), waste, costs and assets utilisation (which ismostly evaluated through financial indicators). Finally, the fourth level of the frameworkproposed by Gaiardelli et al. (2005), assesses the development and innovation dimension(Kaplan and Norton, 1992), aiming at capturing the drivers of future competitive and financialresults.


5.3.2 Research Methodology

5.3.2.1 Sampling MethodThe participants for this research will be institutional bus buyers and private bus operators.For the study convenience sampling will be used. It is a type of non probability samplingwhich involves the sample being drawn from that part of the population which is close tohand. In this operators who have agreed to participate in customer value analysis would beapproached.

5.3.2.2 Sample SizeRespondent Classification Sample Size

Institutional Bus Buyers 12Private Bus Operator 18

5.3.2.3 Data CollectionPrimary data was collected through questionnaires. A questionnaire was prepared,containing twelve questions. A pilot survey was conducted with 2 institutional buyers. Theirinputs were incorporated to prepare the final questionnaire. The sampling was proportionalconvenience sampling in nature. The data collected was analysed and inferences weredrawn, as discussed in the next section.

The questions in the questionnaire were designed using various scales like Nominal Scale,Ordinal Scale and Ratio Scale.

5.3.2.4 Questionnaire Variables Part Availability Technical Assistance Response Time Repair Time Service Productivity Spare Part Cost Environment Friendly Technical Assistance Cost Operator Training Application Design Service Quality

5.3.2.5 Data Analysis Principal component analysis Descriptive statistics Independent Group T TestAs sample size is small (N:p = 9:14)so strength of data should be check. For this item

communalities should be consistently high.


5.3.3 Result1 To test whether there is any difference between institutional buyers and private bus

operator towards the weightage given to service price while making purchase decision.

Null Hypothesis: There is no much difference between institutional buyers and private busoperator for weightage given to after sales service while making purchase decision.

Alternate Hypothesis: There is much difference between the two groups for the weightagegiven to after sales service while making purchase decision.

To check the normality of data obtained for institutional buyer and private bus operator,boxplot was plotted. The graph obtained is as shown below for the two.

Chart 5-1: After Sales Service Weightage Boxplot

The median for the two boxplot lies in the centre of box. So we can say that data is normal.Moving ahead to determine whether there is any significant difference between institutionalbuyer and private operator for after sale service, an independent group T Test wasconducted. The results obtained are


Group Statistics

Type N Mean Std. Deviation Std. Error Mean

After Sales Service

Weghtage

institutional 3 60.0000 10.00000 5.77350

private operator 11 60.4545 17.67124 5.32808

Independent Samples Test

Levene's Test for Equality of

Variances

t-test for Equality

of Means

F Sig. t

After Sales Service

Weightage

Equal variances assumed 2.831 .118 -.042

Equal variances not assumed -.058

Given that Levene’s test probability is greater than 0.05, we can assume that populationvariances are relatively equal. Therefore we would check the t value, df and two tailsignificance for the equal variance estimate whether the after sales service weightagedifference exists.


t-test for Equality of Means

df Sig. (2-tailed) Mean Difference

After Sales Service

Weightage

Equal variances assumed 12 .967 -.45455

Equal variances not assumed 5.989 .956 -.45455


t-test for Equality of Means

95% Confidence Interval of the Difference

Lower Upper

After Sales Service Weightage Equal variances assumed -24.06931 23.16022

Equal variances not assumed -19.68720 18.77811

The two tail significance for after sale service weightage indicates that p > 0.05 andtherefore is not significant. At 5% significance level we can accept the null hypothesis i.e. the


two groups must have come from same population. So we can say that there is no muchdifference for the weightage given by institutional buyer and private operators.

2 To study the various after sales service component and find the key underlineservice attributes

In previous study we have found that there is no much difference between the after salesservice weightage given by institutional buyers and private bus operators. So now we wouldtry to map the expected and perceived after sales service by these customers.

For this we have use principal component analysis. As the communalities is consistentlyhigh and the number of factors is only 2 we can say that strength of data is strong. So forthis data sample size is less important. Also KMO measure of adequacy is greater than 0.5i.e. 0.668. So our result is valid. Analyzing the result, two factors seem to emerge out. Factor1 represents Responsiveness and factor 2 seems to represent effectiveness.

Table 5-8: Principal Component Analysis Factors for expected after sales serviceFactor Variables Factor Loading

Responsiveness

Application_Design .897

Spare_Part_Cost .884

Technical_Assistance .857

Response_Time .720

Operator_Training .635

EffectivenessService_Productivity .802

Repair_Time .802

The obtained factor scores for the respondents are shown in below listed table.

Table 5-9: Factor Score for expected after sales service component

Respondent Responsiveness Effectiveness1 -1.69999 -1.111462 1.13604 -2.674793 -0.21866 0.054444 0.5564 0.5415 0.52997 0.047626 0.26888 0.6197 0.23054 0.5298 -1.71839 1.161199 -1.69999 -1.11146

10 0.26888 0.61911 0.52997 0.0476212 0.23054 0.52913 1.31693 0.1308114 0.26888 0.619


On plotting this we have obtained the below drawn graph.

Chart 5-2: Customer Expectations for After Sales Service

Though there are few outliners in plot, but most of other respondents lie in somewhat closerange. So we can say that for most of the customers expected after sales service demandparameters are same.

3 To identify the perceive value of after sales service customers are currentlygetting from their existing suppliers.

For this we have had asked respondents to rate various for the current level of after salesservice they are getting from their supplier. To find the underlying components we haveperformed principal component analysis. The KMO measure of sampling adequacy is 0.766which is very good and for these data Bartlett’s test is highly significant (p < .001) andtherefore analysis is appropriate. Also communalities for data is consistently high andnumber of components are only 2, so small sample size is not a problem.


Table 5-10: Principal Component Analysis Factors for perceived after sales service

Factor Variables Loading

Service_1

Technical Assistance .919

Product Design .766

Repair Time .756

Operator Training .754

Parts Availability .718

Response Time .610

Service_2Service Quality .910

Service Productivity .898

The obtained factor scores for the respondents are shown in below listed table.

Table 5-11: Factor score for perceived value of after sales service

Respondent Service_1 Service_21 -0.34058 -2.430025992 0.279691 0.1352891243 -1.24995 1.0867273964 -2.04668 -1.155497655 1.03486 -0.10427436 -0.2475 -0.211450687 0.72224 0.5730406858 -0.51637 0.3953407289 0.728417 -0.71173074

10 1.473132 -0.2259383211 -0.02925 0.67022399812 -0.43357 0.16059744313 -0.69935 1.72605500114 1.32491 0.09164329

On plotting this we have obtained the below drawn graph.


Chart 5-3: Customer perceived value for After Sales Service

In the above graph we can see that there is a mark difference between perceived value ontwo defined dimensions whereas expected value lies somewhat in close range. So we cansay that there is a huge difference between what customers want and what they are beingdelivered.


6 Market Segmentation & Targeting

6.1 Market Segmentation

In previous chapter we have find that bus air conditioner after sales service has two measuredimensions – Responsiveness and Effectiveness. As market segment consists of customerswho share a similar set of needs and wants, therefore we can group customers on the basisof these two dimensions. The four obtained segments are

Table 6-1: Bus Air Conditioner market segments

Effe

ctiv

enes

s Hig

h

Segment C Segment A

Low Segment D Segment B

Low HighResponsiveness

More responsive for them means Supplier should help them in designing the bus so that it is more cooling efficient and as

well as cooling effectiveness. It is a proactive strategy rather than reactive. Oncecustomers have selected there ac supplier they want him to play an active role indesigning the bus body. It will helps in increasing the financial performance as well asproduct performance. So this is a win-win situation for both.

Supplier should provide them needed technical assistance on time to time regarding airconditioner. It will help in reducing the downtime. It is like a preventive maintenance. Soinstead of final breakdown, customers expect them to give them required technical inputsto check the ac health.

Supplier response time should be minimum i.e. when contacted they should respondquickly.

Supplier should give required basic training so that bus driver can solve the airconditioner problem (if there is any) by himself. It will helps in reducing the dependencyof operator on AC supplier. The required skill-set expectations differ from respondent torespondent.


Spare part cost should be economical. There should not be any mark difference betweenmarket price and supplier price for the required spare part.

More Effective means Supplier should take minimum time to repair the bus air conditioner. There should be minimum bus air conditioner downtime or service productivity should be

high.

For our survey we have considered institutional buyers and private bus operators only. Wehaven’t taken OEMs (Ashok Leyland, Tata Motors, VECV etc.) and bus body builders. Afteranalysis we have identified after sales service as one of the critical parameter while makingpurchase decision. So for our further discussion we can eliminate fourth segment i.e. lowresponsiveness and low effectiveness.

Now we would try to find the size, purchasing power and characteristics of each identifiedsegment. It is done so as to identify whether each segment is large enough to serve. Also itwill help to craft the strategy to serve them by formulating effective programs.

6.1.1 Segment A

This segment his high on both after sales service attribute i.e. they want the bus ac supplierto be more responsive and as well as more effective. So the cost of service for this segmentis high. On analyzing the respondent details we have found that this segment constitutesprivate operators having medium fleet size (between 10 & 20). Also there are fewinstitutional buyers also in this segment. Maximum number of respondents in our sample liesin this segment.

6.1.2 Segment B

This segment is high on responsiveness but low on effectiveness. They want their serviceprovider to be more of proactive rather than reactive. On analyzing the respondent detailswe have found that customers of this segment have medium to low fleet size and majority ofthem have less experience. But few of the respondents also have their own full timeworkshops. It may be the case that they have diversified business (like car service, truckservice etc) and depends on their supplier for assistance purpose only.

6.1.3 Segment C

This segment is high on effectiveness but low on responsiveness. On analyzing therespondent details we have found that most of the customers in this segment have a highexperience (> 20). So maybe they depend more on their experience for application design,technical assistance and spare parts. These customers are less costly to serve as they wantservice only when required.


6.1.4 SummaryTable 6-2: Summary for Market Segment

Features/ Parameters Market SegmentA B C D

Segm

ent

Attr

ibut

e

OEMs 1Low Experience, Fleet Small 1 1Low Experience, Fleet Large 1High Experience, Fleet Small 1High Experience, Fleet Large 1

Attributes Responsiveness High High Low LowEffectiveness High Low High Low

Clu

ster

Ana

lysi

s Cluster 1 1 1 NACluster 2 1 NACluster 3 1 1 NACluster 4 1 NA

* NA: Not Applicable

6.2 Market Targeting

In evaluating different market segments, the firm must look at two factors: the segment’soverall attractiveness and the company’s objectives and resources.

On perception mapping the perceived value by customers for existing level of after salesservice offered by competitors, we have identified that there is no much significant differencebetween the perceived and expected after sales service value. So company cannot targetany of the market segments on after sales service criteria.

But looking into the segment attractiveness, we can further analyse Segment B andSegment C for market entry. As Segment D due to lack of required data is not analyzed sonothing can be said about it.

Also our survey is being conducted only in Northern region (Delhi/NCR) of India only, sothere may be some regional biases which may not be accounted for in this research.

The second order qualifier was ‘cooling efficiency’. Company should look for new valueproposition in it. For this we may use ‘Quality Function Deployment tool – House ofQuality’. But company then also has to deliver a high quality after sales service to attract thetargeted market share of this market.



7 Analysis: Competitive Force

Michael Porter has identified five forces that determine the intrinsic long run attractiveness ofa market or market segment: industry competitors, potential entrants, substitutes, buyersand suppliers. His model is shown in figure 5.1.

Figure 7-1: Five forces determining segment structural attractiveness

Source: http://thomasbarker.com/files/porters.gif

7.1 Analysis

7.1.1 Industry CompetitorsCurrently there are nearly 14 players in the market and according to industry experts by2010 there would be 20 players. Below listed table list some of the important players inIndian bus market.

Company Nationality IndiaHeadquarter

Year ofincorporation

ServicePoints

Carrier USA Gurgaon,Haryana 1902 55

Thermoking USA Mumbai,Maharashtra 1938

Haiger China Delhi 22

Sidwal India Delhi 1974 20

Jingyi China Delhi 1988

Sphero Germany Noida, UP 1956

http://thomasbarker.com/files/porters.gif


Denso Japan 1949

7.1.1.1 Carrier Transicold

It is a business unit of Carrier Corporation, a subsidiary of United Technologies Corporation.Carrier Corp., headquartered in Farmington, Conn., is the world’s largest provider of heating,air-conditioning and refrigeration solutions. With 2007 revenues of $14.6 billion, Carrier hasapproximately 43,000 employees worldwide and operations in more than 170 countries.

Carrier enjoys a leadership position with a significant market share. They offer a full range ofproducts specially designed for high ambient temperatures in India. Carrier has been one ofthe pioneers in the fields of transport air-conditioning and in cold chain development. Forbuses, they have a range of split and roof top systems with cooling capacities ranging from 5kW to 44 kW, for installation on buses carrying 10 to 100 passengers.

Their manufacturing facility is located in Gurgaon, on the outskirts of New Delhi and the Indiasales and distribution Head office is in Bangalore. The Regional Offices are in Delhi,Mumbai, Bangalore and Kolkata. We also have sales offices at Chandigarh, Pune, andChennai. Their service dealer network includes more than 20 company technicians and 60service dealers spread in all major cities in India, primarily along the main highway routes.

They have set up a state of the art engineering/R&D center at Gurgaon. Their bus airconditioning equipment is used by almost all State Transport Corporations. They offercustomized solutions, specially adapted to Indian road and ambient conditions; and alsoprovide strong parts and service support through a countrywide network of service dealers.

Carrier also has a strong leadership position in room air-conditioning as well as air-conditioning of large buildings and projects.

7.1.1.2 Haiger Refrigeration Private Ltd.It is one of the early movers in the Indian bus AC segment. It sells the Haiger brand of busair-conditioning systems. Haiger was started in 2004 by Mr. Rishi Pathak who comes withmore than 14 years of experience in bus air-conditioning. Haiger is the Indian arm of one ofChina’s leading and premium brands of bus air-conditioners selling over 22,000 bus AC unitsper annum, with major supplies for KingLong in China.

Haiger plans to set up a manufacturing facility in India, at Baddi in Himachal Pradesh,spread across an area of about 2.5 acres. In the first phase this factory will have a capacityto manufacture 4,000 units. Currently products are manufactured at its facility in Shanghai,China. It has a full-fledged workshop and service facility in Delhi. They are coming up withan office in Ahmedabad, Bangalore and Kolkata.

The company has established nine service stations in UP alone to provide service support toUP roadways and other private customers. It has also bagged significant orders from theGovernment and private operators in West Bengal, Orissa and Andhra Pradesh. In the


South, Haiger’s biggest private customer is SRS Travels to which it has supplied close to150 units till 2008.

Haiger offers a complete product range from 11.6 KW to 50 KW, from 3.3 tonnes to 14tonnes. It offers solutions for buses starting from 6 m long to 12 m long coaches. Haiger isan 100 per cent OEM for JCBL and Cerita Motors. Haiger is also considering a entry into thetruck refrigeration market as also cars and rail coach air-conditioning. Haiger India clocked aturnover of Rs. 12.5 crores in 2007-08.

7.1.1.3 Sidwal Refrigeration Industries LtdThe Delhi-based Sidwal Refrigeration Industries Ltd. is a leading manufacturer of air-conditioning units for mobile and stationary units. The company was founded in 1974 by Mr.Sher. S. Sidhu. The company has an endless list of prestigious projects to its credit whichincludes air conditioning of the Shatabdis, Rajdhanis, Palace on wheels given to theRajasthan Government, the Deccan Odyssey operated by Maharashtra, the Golden Chariotof Andhra and the recent order for the air-conditioning of 188 Delhi Metro coaches. Formilitary, Sidwal has developed cooling units for many important projects including the coolingunits for missile launchers like the Brahmos, military shelters and radars.

Sidwal has also built very strong competency in the Bus air-conditioning business. Sidwalhas the largest range of air-conditioning products for this industry to meet the diversifiedneeds of customers, starting from trucks, Defence combat vehicles, military ambulances,free flow units for city ambulances and low-roof mini-buses, and roof top units for small, midand large buses having seating capacities from 10 to 72 seaters.

By March 2009, company has fitted over 2000 units on various types of buses includingluxury coaches for long distance travel, for tourist purpose and even some of the Tarmaccoaches for airport applications.

Sidwal is currently a 100 per cent Indian company with no technology tie-ups for any of itsproducts. The company has three manufacturing facilities in the North. Sidwal employs overa 1,000 people out of which 400 people are employed in service alone along all the railnetwork across the country to provide 24/7 service support for Railways. This is a bigadvantage for Sidwal as these service centers can also be used to service its other products.

Sidwal clocked a turnover of Rs. 100 crores in 2007-08 and is looking to double this in thenext couple of years. The company is also closely looking at a possibly entry in therefrigerated goods storage, displays and transportation business particularly for supermarkets and refer trucks and trailers, which is bound to grow in the coming years.

7.1.1.4 Frigid CorporationFrigid Corpoation represents Thermoking Europe in India for bus air conditioning and truckrefrigeration. Thermo King is the acknowledged World Leader in Transport TemperatureControl Systems. Having its corporate headquarters in Minneapolis, USA, and 14 factorieslocated all over the world, Thermo King was the first company to produce TruckRefrigeration unit in 1938 and Bus Air-conditioning unit in 1956. Today Thermo king


produces nearly 70% of the world’s requirement of Transport Temperature Control Systems.Thermo king enjoys excellent reputation in terms of product performance, reliability anddurability and is making the world better on every continent and in every type of climate andterrain.

Thermo King has a very wide range of products, which include Container Refrigeration (sea-going). Rail Air-conditioning, Truck & Trailer Refrigeration and Bus Air-conditioning units.In India, we have been promoting a wide range of TK bus airconditioning and truckrefrigeration models to suit the domestic requirements. We have been supplying regularly TKTruck Refrigeration units to Amalgam, Choice, Devi, Baby, Integrated, Alsa Marine for frozenfish; Quality Walls and Amul for Ice Creams; Allana, Al-Kabeer, Venkey’s, McDonald’s formeat & poultry and to hordes of private transports, floriculturists and fish exporters.

7.1.1.5 Spheros Motherson Thermal System LimitedIt is a joint venture between Samvardhana Motherson Group and Spheros GmbH ofGermany. Spheros GmbH, previously, a division of Webasto AG. is world's leadingmanufacturer of Air Conditioners, Heaters & Hatches for buses and coaches. Spheros is oneof the world's leading manufacturers of air conditioners, heaters and roof hatches for buses.It partners with all the prominent bus manufacturers in design & development of innovativetemperature control systems.

7.1.1.6 Denso CorporationA well-established spin-off of Toyota Motor Corporation, the DENSO Corporation (originallyincorporated as the Nippondenso Company) is Japan’s leading producer of automobilecomponents and the world’s fourth largest. Its products include air conditioners and heaters,electrical and electronic control products, fuel management systems, radiators, meters, andfilters. General Motors leaders acknowledged DENSO as a model for GM spin-off DelphiAutomotive. As the second-largest member of the Toyota Group, more than half of DENSO’sproducts go to Toyota Motor Corporation (TMC), which owns better than 20 percent ofDENSO stock. DENSO also supplies nearly all other major Japanese automakers as well asnumerous U.S. manufacturers, including Ford, General Motors, and Chrysler, and majorEuropean auto manufacturers such as Volvo, BMW, and Fiat. The company’s emphasis onquality control and improved manufacturing efficiency throughout its history, its aggressiveinternational expansion program, and its well-funded research-and-development activitiessince the 1960s have produced steady sales growth and allowed DENSO to capturedominant positions in many of its world markets.

7.1.1.7 Trans ACNR SolutionTrans ACNR Solution represents Jingyi, China in India for bus air conditioning. GuangzhouJingyi Automobile Air Conditioning Co., Ltd. was established in 1988. Company’s annual busair conditioning production capacity of 18,000 sets factory infrastructure in the industry-leading level.


7.1.1.8 Strength – Weakness MatrixCompany Name Strength Weakness

Carrier Transicold

Carrier world’s largestprovider of heating, airconditioning andrefrigeration.Enjoys leadership position inIndian market.Huge range of productsranging from 5 KW to 44 KW.Engineering/ R&D centre atGurgaonWorking with all major IndianOEMsHuge service deliverynetwok.

Haiger

China’s leading and premiumbrands of bus air-conditioners.

Customers’ resistance to buyChinese products.

Manufacturing unit at Baddi,Himachal Pradesh withinstalled capacity of 4000units.Complete product range from11.6 KW to 50 KW.100% OEM for JCBL andCerita Motors.

Sidwal

100% Indian company withzero debt.

Poor service network acrossSouth India.

Large range of product forseating capacities from 10 to72 seaters.Has been part of manyprestigious projectsHuge service network alongall the rail across the countrywhich can be used to serviceits other productsInstalled manufacturingcapacity of 10,000 units forlarge-sized bus air-conditioning units.


Frigid Corporation

Thermoking produces nearly70% of the world’srequirement of TransportTemperature ControlSystems.

Poor service network.

OEM for VolvoWide range of TK bus air-conditioning.

Trans ACNR

JingYi installed capacity ofabout 25000 units.

Customers’ resistance to buyChinese products.

Nearly 10 series and 200types of bus air conditioningproducts.

New market entrant

Low cost advantage Poor service network all overIndia.

Spheros Motherson No information available New market entrant.


7.1.2 Industry ProductBus air conditioner main components are compressor assembly, condenser, evaporator,roof-top unit and dash panel.

Figure 7-2: Bus Air Conditioner unit components

Source: http://www.aitransit.com/bus_and_coach/Pictures/SRLT_Bus_Instal_small.jpg

For brief study of available range of bus air conditioners in India, we would classify them intothree segments i.e. Small Bus A/C, Medium Bus A/C and large bus A/C

7.1.2.1 Small Bus Air ConditionerSmall buses can have a seat capacity of up to 20. The available range of most popularproducts in this segment is given in below listed table.

Brand Model Rated Capacity(in KW)

Cooling Capacity(in m3/hr)

Denso SD8 18.0 3000

Carrier

CT-15 6 2030

CT-20 8 2465

CT-25 10 2465

http://www.aitransit.com/bus_and_coach/Pictures/SRLT_Bus_Instal_small.jpg


415/420 10 3000

ThermokingS20 5.3 1400

S30 8.1 1487

Sidwal SR10SS 11 2700

Jingyi JYKT-08 8 1500

Haiger Alfa 17 17 NA

In this range all the suppliers provides a one year warranty service. For more details pleaselook in Appendix.

There is no industry standard for cooling capacity. It all depends on the usage of vehicle andhence has to be customized as per its need. Also it varies in power consumption and weight.

7.1.2.2 Medium Bus Air ConditionerThey can have a seat capacity of up to 35. The available range of most popular options inthis segment is given in below listed table.



Denso MSD8 18 3800

Carrier AC310 24 4000

Thermoking SR 50S 14.5 2720

SidwalSR 30S 28 4000

SR 13S 16 4000

Jingyi JYKT 22 28 4200

Haiger Alfa 20 20

SpherosCC 170 20.5 4200

CC 160 19 4200


Considering weight, power consumption and cooling capacity as the parameter there is awide range of difference available in the available product range. This can be because of thewide application for which this range of product is being use. Like if vehicle has a box type


body building then engine load will not interfere with cabin cooling and so effectiveness of airconditioner increase.

7.1.2.3 Large Air ConditionerThey can have a seat capacity of up to 55. The available range of most popular options inthis segment is given in below listed table.



Denso LD8i 35 6600

Carrier

136 II 32 6600

136 III 39 6600

136 IV 44 8800

353 32 6300

Thermoking

KRS 2139A 34.9 5070

KRS 2139B 32.6 5070

KRS 2139C 30.2 5070

Sidwal SR 32S 32 6500

Jingyi JYKT 24 32/38 6300

Haiger Beeta 38 38 6700

SpherosAT 350 40 6300

AT 300 35 6300


Depending upon the application of bus, product has to be designed. So there is a very widedifference between the product attributes.


7.1.3 Industry SuppliersThe main components of bus air conditioning units are compressor unit, refrigeration piping,evaporator, condenser and alternator. Compressor is known as the heart of air conditioningunit. In India most of the market players source compressor from Blitzer, Germany. Similarlyfor other parts also there are common suppliers like Prestolite - UK, SPAL – Italy, Denfos,Parker/ Minoli, Valeo - Japan etc. So in a way it gives a lot of bargaining power to suppliers.But considering the still under developed Indian Bus air conditioning market, there is a hugescope for other players. So witnessing this there are large numbers of international brandswhich are planning to enter into huge Indian market.

Indian air conditioner suppliers have a tie up with any one of the strong international playerand hence depends upon them to source critical air conditioner unit components. Hence thisreduces the bargaining power of suppliers.

7.1.3.1 Blitzer InternationalBitzer International is the largest manufacturer of transport compressors in the world. InIndia, the transport compressor business grew 351 per cent in calendar year 2008 over2007. Even with the ongoing global slowdown in business, in calendar years 2010 and 2011,the company expects to grow in three digits. In India, Bitzer offers compressors for bus air-conditioning, truck refrigeration and railway air-conditioning. The major growth in the pastyear has been in the bus air-conditioning segment due to the exponential rise in demand forair-conditioned buses. Bitzer India caters to the compressor requirement of all major OEMsin India like Spheros Motherson, Sidwal Refrigeration, Thermoking India, Carrier Transicold,Trans ACNR to name a few. Bitzer has a comprehensive service network placed around thecountry. They have a dedicated service team available at Mumbai. They have a threeauthorized service centres at Bangalore, New Delhi and Mumbai. In addition, authorizedservice providers are being appointed in ten cities across India.

7.1.3.2 Prestolite ElectricIt manufactures alternators and starter motors. These are supplied under the PrestoliteElectric, Leece-Neville and Indiel brand names for original equipment and aftermarketapplication on a variety of vehicles and industrial equipment.

7.1.3.3 SPAL AutomotiveFounded in Italy, in 1959, it specialized in plastic mold design and production. They havebeen designing, producing and marketing high-performance axial fans and centrifugalblowers vehicular, off-road, industrial, construction and stationary product manufacturers formore than 30 years.

7.1.3.4 Kendrion LINNIG GmbHThis company is a part of the Kendrion Group, worldwide supplier of electromagneticclutches for engine cooling and air-conditioning in city buses, coaches and trucks, in theluxury segment, and also in specialized vehicles. They are a major supplier of componentsto the air-conditioner manufacturers like Carrier, Spheros and Thermoking. Presently they


are trying to partner with the Indian OEMs like Tata Motors, Ashok Leyland and others andto cater to the other global manufacturers entering the Indian market.

7.1.4 Industry New EntrantsIn an interview given by an bus industry experts to a trade magazine has told that theyexpect that by 2010 there would be 20 players in this market.

7.1.4.1 Modine Manufacturing CompanyIt is a global component major and system supplier of power train cooling components(PTCs). When Modine entered the Indian market, the company also announced its plans toenter the bus AC market. It has also acquired a company in Korea which manufacturesHVAC systems for commercial vehicles and passenger cars. The company had planned toimport components from Korea and cater to the growing demand in the Indian Bus ACmarket.

7.1.5 Industry CustomersIn India Ashok Leyland, Tata Motors, Swaraj Mazda, Eicher, Mahindra and Force Motors arethe major bus manufacturer. Though these players have started offering the complete builtbus but still the major market lies with customers who just buy bus chasis from themanufacturers and then get body building over it. Because of this there is a lot of disparity inbus design across the industry. To overcome it government is coming out with body buildingcode.

Soon coming years we can see a large shift in complete build bus market from smallunorganized players to bus chasis manufacturers. But for a period of time we continue studyboth as customer, as still major chunk of market is with these small players.

7.1.5.1 Original Equipment ManufacturersTo meet the increased demand for complete built buses, all present OEMs have startedbuilding up there installed capacity. Some of the latest updates have already beingdiscussed in Chapter 3. To source their air conditioner requirements, these manufacturershave formulated a strategic tie up with world class players.

OEMs AC Suppliers

Tata Motors Carrier

Eicher Motors Webesto

Force Motor Carrier

Ashok Leyland Hispanocold/ Modine

Volvo Denso/ Thermoking/ Carrier

JCBL Haiger


Ashok Leyland is using Hispanocold ACs only for domestic buses, but for export purposethey are using Modine ACs. Seeng the relative size of these OEMs and their strategicimportance, we can say that they have quite a reasonable bargaining power as customer.

7.1.5.2 Bus Body BuildersIn India to fill the gap between local body builders and OEMs, there are few market playerswho have started offering fully built buses. Some of them are JCBL India Ltd, Sutlej Motors,Azad Coach Pvt Ltd, KMS Coach Builders, Bharat Coach Builders, SM KanappaAutomobiles, Azad Body Builders etc. They have set up the state of art manufacturing unit tobuild buses over the chasis. They built buses for number of state roadways, big privatetransporters, tour operators and institutions.

Few of them have entered into the strategic partnership with AC Suppliers. Some of thecustomers depend on their expertise and source fully built buses from them but some timethey are guided by the end customer for brand of ac unit to be installed. We can say thatthey enjoy a strategic location in evolving Indian bus market. So they too have a highbargaining power.

7.1.5.3 Bus OperatorsSTUs, Private Transporters, Tour Operators, Institutes and institutions come under thissegment. They are the one who buy only chasis from OEMs and then get body building donefrom their preferred bus body builder. They also make a decision regarding the bus acsupplier. They formulate the largest chunk of demand for ac buses. Considering their relativesize they have quite a high bargaining power. But with bus body building code, this market isgoing to shrink considerably.

7.1.6 Industry SubstitutesThere are no substitutes available for bus air conditioner. Hence the threat of substitutes islow.


7.2 Competitive Force Analysis Summary

Competitive Force Effect Reason

Inter-competitor Rivalry

High Product differentiation for a given application is low

Low Nationality viz competitors differs

High Number of competitors are still low

Low Industry growth rate is huge.

High Buyer’s switching cost is low.

High Considering Indian huge market strategic stake is

high

Buyer PowerHigh All major stake holders OEMs, Body builders and

Bus operators have a high bargaining power.

Supplier Power

High Supplier concentration is low

Low International reputation of buyer is quite high.

Low Substitutes are available and hence there is a

threat that buyer may switch over to other

available brands.

New Entrant

High Considering India’s vast and diverse geography

access to distribution channel is difficult

Low Switching cost to buyers is low.

Low Product differentiation is low.

Low Government policies also favour new entrant

Substitute Low Not available



Appendix 1: Company viz sales figure for passenger vehicle in India

Company 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

% Market ShareMaruti Suzuki India 67.1 52.46 48.04 47.22 43.54 41.71 39.89 40.63 38.8 39.88 38.34Hyundai Motor India 4.55 13.77 16.97 18.45 19.57 22.12 22.28 23.28 22.46 22.8 29.56Tata Motors 1.21 9.76 7.33 10.78 12.43 13.95 15 15.24 14.76 12.43 12.85Honda Siel Cars India 5.55 3.86 4.02 4.61 4.82 6.11 8.12 8.66 11.21 9.86 7.58Ford India Pvt. Ltd 4.02 2.02 5.33 4.58 4.13 4.43 4.39 4.56 5.81 4.46 3.37General Motors India Pvt. 2.11 1.24 2.8 3.79 0.79 3.56 2.72 1.82 1.76 3.5 3.01Toyota Kirloskar Motor Pvt. 0.59 2.93 2.34 2.34 1.58 1.31 1.46Mahindra Renault Pvt. 2.49 1.23

Sales Value (in Rs crores)Maruti Suzuki India 7300.9 8540.6 8187.6 8284 8441.2 10355.3 12407.5 13734.2 16034.1 19549 21186.56Hyundai Motor India 495.11 2242.19 2892.1 3237.41 3794.57 5490.52 6930.17 7867.72 9283.09 11179.41 16336.82Tata Motors 132 1589.73 1248.42 1890.77 2409.74 3464.24 4664.67 5152.31 6098.51 6092.96 7100Honda Siel Cars India 603.4 628.24 685.72 808.34 935.29 1516.33 2525.26 2928.83 4634.08 4835.12 4191.08Ford India Pvt. Ltd 437.95 328.3 908.5 803.41 801.38 1100.23 1365.13 1539.92 2400.78 2188 1865General Motors India Pvt. 229.12 201.13 476.39 665.22 153 884.44 845.05 614.15 727.42 1716.45 1664.53Toyota Kirloskar Motor Pvt. 114.47 726.58 726.58 792.12 652.16 641.5 806.71

Mahindra Renault Pvt. 1219.07 677.21Source: CMIE Database



Appendix 2: Company viz bus production by various OEM’s in India

Segment YearForce

MotorsGeneralMotor

Toyota BajajHindustan

MotorsMahindra

TataMotor

EicherMotors

SwarajMazda

AshokLeyland

VECV JCBLVolvoIndia

Total

A1

<= 5

2004 4032 25887 8904 567 21157 26367 86914

2005 7607 11631 11 3474 253 16778 26998 66752

2006 10932 11190 232 15753 26123 64230

2007 11318 10884 58 11854 21871 55985

2008 10519 7534 6 13347 19432 50838

2009 9900 5690 14 13297 16867 45768

A2

>= 5 &<= 7.5

2004 520 6021 1732 2157 354 10784

2005 1346 6990 1483 1939 699 12457

2006 1560 10049 1460 2331 431 15831

2007 69 1896 11191 2035 2264 413 17868

2008 194 2498 9695 1275 2084 587 16333

2009 116 2296 12808 731 1883 710 886 19430

B1

> 7.5 &<= 12

2004 899 531 928 2358

2005 976 708 1043 743 3470

2006 1421 950 1439 707 4517

2007 961 1267 2027 692 4947


2008 2959 1266 1882 663 6770

2009 4467 439 1531 1005 1072 1 8515

B2

>=12 &<=16.2

2004 13941 170 12534 300 26945

2005 10071 155 12434 369 23029

2006 13364 438 10361 248 24411

2007 14598 549 17057 229 32433

2008 13410 265 15015 445 29135

2009 14352 31 15 14157 124 127 486 29292

B3

>16.2

2004 0

2005 75 75

2006 0

2007 0

2008 21 21

2009 78 78Source: Indiastats Database


Appendix 3: Company viz production figure of Buses having GVW < 5 tons

Year Force Motors General Motor Toyota Bajaj Hindustan Motors Mahindra Tata Motor Total

X No. of seats including driver not exceeding 13

2004 4032 25887 5004 185 18356 22920 76384

2005 4533 11631 11 2174 55 15265 23600 572692006 7225 11190 14084 24292 567912007 7219 10884 8683 20009 467952008 6400 7534 10540 15815 40289

2009 5191 5690 4 10623 12067 33575

2010 (Jan - Mar) 1866 2488 562 2919 NA

Y No. of seats including driver exceeding 13

2004 3900 382 2801 3447 105302005 3074 1300 198 1513 3398 9483

2006 3707 232 1669 1831 74392007 4099 58 3171 1862 91902008 4119 6 2807 3617 10549

2009 4709 10 2674 4800 12193

2010 (Jan - Mar) 1873 4 649 1427 NASource: Indiastat Database



Appendix 4: Registered Motor Vehicles (Category-wise) in India by States/Uts

As on 31st March 2006 As on 31st March 2005

States Buses Taxis LMV Buses Taxis LMV

Andhra Pradesh 18368 113693 299776 16909 97516 281236Arunachal Pradesh 682 343 1449 678 334 1441Assam 11378 12671 34906 10776 11440 32386Bihar 16271 22698 45365 16158 22271 42050Chhattisgarh 24955 5036 9194 22294 4736 8219Goa 5689 9361 10035 5267 9036 9763Gujarat 54446 47914 336695 52286 43714 296758Haryana 19986 16344 45858 11297 17294 43239Himachal Pradesh 6859 14542 2825 6687 14695 3717Jammu & Kashmir 21435 13656 15919 20735 12344 15054Jharkhand 10238 24693 46834 9878 23289 40714Karnataka 40819 67385 213721 38052 56226 202298Kerala 127574 119753 342527 95486 100012 320851Madhya Pradesh 27997 72760 51049 25990 67570 47976Maharashtra 66754 122389 534535 63405 113380 515249Manipur 2570 377 2721 2480 369 2630Meghalaya 3497 8432 3569 3285 7180 3001Mizoram 704 4988 1534 672 4316 1336Nagaland 4060 5004 9548 3863 4721 9100Orissa 15996 30426 34360 15012 26365 30310Punjab 21136 9937 43280 19855 9616 39664Rajasthan 60979 42679 79576 58092 37761 71711Sikkim 365 6052 0 355 5467 0Tamil Nadu 89991 134580 174646 82547 124370 163545Tripura 1961 1316 13237 1864 1232 11881Uttarakhand 5949 16069 7906 5279 14605 7060Uttar Pradesh 26549 28443 91346 25081 27810 80037

West Bengal 43599 68926 40315 33613 65110 56038

TOTAL STATES 730807 1020467 2492726 647896 922779 2337264

Delhi 25963 15569 96149 633 246 2857Chandigarh 2307 1771 2000 2166 1550 2000Daman & Diu 420 43 976 156 112 527A & N 658 246 2997 389 43 942Lakshadweep 13 0 273 25357 13470 92243Puducherry 1997 1626 4665 9 0 249

D & N Haveli 176 123 539 1915 1538 4600

UT Total 31534 19378 107599 30625 16959 103418Source: Indiastat



Appendix 5: Calculation for total number of annual tourist bus trips required

YearTourist Visit (in no) Pasngrs Travelled By Bus Bus Trip Required Total

TripsForeignTourist

DomesticTourist Foreign Domestic Foreign Domestic

1995 21200000 1366400000 784400 538361600 19610 13459040 134786501996 22900000 1401200000 847300 552072800 21182 13801820 138230021997 23700000 1598800000 876900 629927200 21922 15748180 157701021998 23600000 1682000000 873200 662708000 21830 16567700 165895301999 24800000 1906700000 917600 751239800 22940 18780995 188039352000 26500000 2201100000 980500 867233400 24512 21680835 217053472001 25400000 2364700000 939800 931691800 23495 23292295 233157902002 23800000 2696000000 880600 1062224000 22015 26555600 265776152003 27300000 3090400000 1010100 1217617600 25252 30440440 304656922004 34600000 3662700000 1280200 1443103800 32005 36077595 361096002005 39200000 3919500000 1450400 1544283000 36260 38607075 386433352006 44500000 4623100000 1646500 1821501400 41162 45537535 455786972007 50800000 5265600000 1879600 2074646400 46990 51866160 51913150

2008 53700000 5629200000 1986900 2217904800 49672 55447620 55497292



Appendix 6: Technical Details for available AC Product Range for Small Buses

Company Model Name Compressor Cooling Capacity(in Kcal/hr)

Voltage(in V DC)

PowerConsumption

(in Amp)Weight(in Kg)

Airflow(in m3/hr)

Price(in lakhs)

HaigerAlpha 11.6 TM-16 8000 12 50 80 900 1.75

Alpha 13 1800 2.20

Alpha 17 2700 2.60

Thermoking

SR 15 TM 08HD 3614 24/12 15 27 816

S 20 II TM16HD 4536 13.5/27 30/16 715 2

S 30 II TM16HD 6930 13.5/27 49/25 1408 2.7

S 40 II A6/ TM16HD 8690 13.5/27 76/42 2292 3.4

CarrierCT 10 793 1

CT 15 TM 16 5593 12 14 47 1244 2

CT 20 TM 16 6883 12 20 66 2259 2.25

SidwalSR 08S SD 510 8000 12 39 1

SR 10SS TM 16 10000 12 54 1.5

SR 10SC TM 16 10000 12 65 2

Jingyi JYKT06 TM 16 5200 12 40 55 1500

JYKT 08 TM 21 7000 12 86 60 1500

Denso SD8 10P30 13800 24 30 85 3000

SpheroCC120 5850 12 1350

CC125 6883 12 2200

C145 10325 12 2200Source: Company Website



Appendix 7: Technical Details for available AC Product Range for Medium Buses

Company Model Compressor Cooling Capacity(in Kcal/hr)

Voltage(in V DC)

PowerConsumption

(in Amp)

Weight(in kg)

Airflow(in m3/hr)

Price(in lakhs)

Haiger Alpha 20 DKS-32/ AK-33 15480 24 60 179 3600 3.00

Beta 33 FK 40/ AK 40 25800/22000 24 75 263 4500 5.00

Thermoking

S 45 R TM31 11271 13.5/27 67/37 2292

SR 50C TM31 HD/ TM16 12304 24/12 47 66 2100

SR 50S TM31 HD/ TM16 12304 24/12 51 95 2720

MRT I X426/ TM 16 (2) 15120 24 72 212 3500

SRT II A6 10600 27 52 170 2720

Citi RT X430/ S391 20900 24 96 170 3500 5.5

D5 X426/ X430 21421 27.5 95 3740

Carrier AC 310 O5K 20650 24 70 200 4000 3.25

AC 112 13766 24 65 125 3600 3

SidwalSR 13S TM31 16000 12 65 3

SR 13SS DKS 32 13000 12 65

SR 13SC DKS 32 13000 12 65

Sphero

CC 300 25800 24 110 6300

CC 160 12400 24/ 12 62 3200

CC 200 16348 24/ 12 75 4200

CC 230 17200 24 75 4200

DensoMSD8 10P30 15500 24 40 100 3800

MSD8 10PA20 10600 25.5 41 100 2800

MD8 10PA20 (2 units) 22600 24 51 140 4500Source: Company Website


Appendix 8: Technical Details for available AC Product Range for Large Buses

Company Model Compressor Cooling Capacity(in Kcal/hr)

Voltage(in V DC)

PowerConsumption

(in Amp)

Weight(in kg)

Airflow(in m3/hr)

Price(in lakhs)

Haiger Beta 38 FK 40/ AK 40 29420 24 90 294 5400 6.00

Gamma 50 FK 40 34400 24 90 430 6300 6.50

Thermoking

LRT I X430/ TM 31 (2) 23900 24 103 265 4900

LRT II X430/ TM 31 (2) 23900 24 103 283 4900

LRT HP X426/X430/ S391/ S616 28980 120 286 5400 5

LRT SP X426/X430/ S391/ S616 23940 110 273 5440 5

Carrier AC 353 FK40 27533 24 100 240 6000 5.5

AC 410

SidwalSR 30S 4PFCY 28000 24 85 28000 5

SR 32S Reciprocating 32000 24 90

SR 30SRE Block FK 4 30000 24 85

Sphero

Aerospace 350 32265 24 115 8400

Aerospace 380 36136 24 115 8400

Aerospace 400 40438-43880 24 115 8400

Aerospace 300 31400 24 95 7500

CC 350 31310 24 110 6300

Jingyi JYKT16A TM31 + HD(Oil 500) 16KW 54 180 2400

JYKT 28A FK 40 32 KW 24 100 259 8000

DensoVOLVO B7R 6C 500C 28 KW 24 110 170 6000 3-3.5

LD8i 6C620/ 10P30 (2 units) 30000 24 68 180 6600

LD8i09 6C620 30000 24 65 175 6600Source: Company Website


Appendix 9: Field Survey 1 - Questionnaire

Name Company Name

Contact No Address

1. How many AC Buses do you own? _______________________

2. For how many years are you in this business? _______________________

3. In which type of segment do you do your business:

Route Permit Tourist Staff School Others

A/C

Non A/C

4. What are the various factors you consider while selecting bus air conditioner?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

5. Rate the below factors on 5 point scale (1: Low ; 5: High):

Variable 1 2 3 4 5

Price

Maintenance Cost

Brand Name

Mileage

After Sale Service

Body Builder Recommendation

Peer Recommendation

Sale Person Recommendation

6. Maintenance frequency (times in year) : _______________________

7. Maintenance cost (in Rs): _______________________


8. Preferred bus body builder: _______________________

9. What are the major reasons for breakdown?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

10. According to you what are the areas of improvements?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

11. What are the features you like most in current product?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

12. What are the features you would like to have in new product?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Visiting Card

Thank You


Appendix 10: Cluster Analysis for field survey 1Cluster

Case Processing Summarya

Cases

Valid Missing Total

N Percent N Percent N Percent

16 100.0 0 .0 16 100.0

a. Average Linkage (Between Groups)

Proximity Matrix

Case

Squared Euclidean Distance

1 2 3 4 5 6 7 8

1 .000 4.000 9.000 10.000 11.000 14.000 11.000 17.000

2 4.000 .000 3.000 4.000 5.000 10.000 9.000 11.000

3 9.000 3.000 .000 1.000 4.000 9.000 6.000 10.000

4 10.000 4.000 1.000 .000 3.000 12.000 9.000 11.000

5 11.000 5.000 4.000 3.000 .000 15.000 8.000 10.000

6 14.000 10.000 9.000 12.000 15.000 .000 5.000 13.000

7 11.000 9.000 6.000 9.000 8.000 5.000 .000 12.000

8 17.000 11.000 10.000 11.000 10.000 13.000 12.000 .000

9 18.000 12.000 7.000 8.000 7.000 16.000 9.000 3.000

10 16.000 8.000 5.000 6.000 7.000 6.000 7.000 9.000

11 12.000 8.000 9.000 8.000 3.000 14.000 9.000 5.000

12 15.000 13.000 6.000 7.000 10.000 15.000 8.000 8.000

13 16.000 14.000 7.000 6.000 11.000 14.000 11.000 11.000

14 15.000 7.000 4.000 3.000 4.000 15.000 12.000 4.000

15 17.000 11.000 6.000 9.000 10.000 9.000 6.000 4.000

16 15.000 7.000 4.000 5.000 8.000 3.000 6.000 8.000

This is a dissimilarity matrix


Proximity Matrix

Case

Squared Euclidean Distance

9 10 11 12 13 14 15 16

1 18.000 16.000 12.000 15.000 16.000 15.000 17.000 15.000

2 12.000 8.000 8.000 13.000 14.000 7.000 11.000 7.000

3 7.000 5.000 9.000 6.000 7.000 4.000 6.000 4.000

4 8.000 6.000 8.000 7.000 6.000 3.000 9.000 5.000

5 7.000 7.000 3.000 10.000 11.000 4.000 10.000 8.000

6 16.000 6.000 14.000 15.000 14.000 15.000 9.000 3.000

7 9.000 7.000 9.000 8.000 11.000 12.000 6.000 6.000

8 3.000 9.000 5.000 8.000 11.000 4.000 4.000 8.000

9 .000 10.000 6.000 3.000 8.000 3.000 3.000 9.000

10 10.000 .000 8.000 11.000 8.000 7.000 5.000 3.000

11 6.000 8.000 .000 11.000 12.000 5.000 9.000 9.000

12 3.000 11.000 11.000 .000 3.000 6.000 4.000 10.000

13 8.000 8.000 12.000 3.000 .000 7.000 7.000 9.000

14 3.000 7.000 5.000 6.000 7.000 .000 6.000 6.000

15 3.000 5.000 9.000 4.000 7.000 6.000 .000 6.000

16 9.000 3.000 9.000 10.000 9.000 6.000 6.000 .000

This is a dissimilarity matrix

Average Linkage (Between Groups)

Agglomeration Schedule

Stage

Cluster Combined Stage Cluster First Appears

Cluster 1 Cluster 2 Coefficients Cluster 1 Cluster 2 Next Stage

1 3 4 1.000 0 0 6

2 10 16 3.000 0 0 9

3 9 15 3.000 0 0 7

4 12 13 3.000 0 0 12

5 5 11 3.000 0 0 10

6 3 14 3.500 1 0 10

7 8 9 3.500 0 3 12

8 1 2 4.000 0 0 15


9 6 10 4.500 0 2 11

10 3 5 5.500 6 5 13

11 6 7 6.000 9 0 14

12 8 12 6.833 7 4 13

13 3 8 7.760 10 12 14

14 3 6 9.300 13 11 15

15 1 3 11.357 8 14 0

Cluster Membership

Case 6 Clusters 5 Clusters 4 Clusters 3 Clusters 2 Clusters

1 1 1 1 1 1

2 1 1 1 1 1

3 2 2 2 2 2

4 2 2 2 2 2

5 2 2 2 2 2

6 3 3 3 3 2

7 4 3 3 3 2

8 5 4 4 2 2

9 5 4 4 2 2

10 3 3 3 3 2

11 2 2 2 2 2

12 6 5 4 2 2

13 6 5 4 2 2

14 2 2 2 2 2

15 5 4 4 2 2

16 3 3 3 3 2



Appendix 11: Field Survey 2 - Questionnaire

Company Name

1. Have you purchased, or participate in the decision to purchase a bus air conditioner in the past 5years? (Check one)

Yes No

2. How many times have you used warranty service for your bus ac in past 5 years? (Check one)

1 1 2 3 4 5 or more

3. Do you anticipate purchasing, or participating in the decision to purchase, a bus a/c within oneyear? (Check one)

Yes No

4. How much information concerning after sales service that typically comes with bus a/c do youknow, in general?

Little or noinformation

1 2 3 4 5Great deal

information

5. How much experience do you have in evaluating after-sales offerings for bus a/c?

Little or noexperience

1 2 3 4 5Great

experience

6. How much information concerning after sales service that accompanies your bus a/c do youknow?

Little or noinformation

1 2 3 4 5Great deal

information

7. How much expertise do you have as a consumer of after sales service for automobiles?

Little or noexpertise

1 2 3 4 5Great deal

of expertise


8. Please rate the below listed parameters as per the importance you give to it while purchasing aproduct:

ParametersNot

ImportantVery

Important

Parts availability 1 2 3 4 5

Technical assistance 1 2 3 4 5

Operator Training 1 2 3 4 5

Application Design 1 2 3 4 5

Service Productivity 1 2 3 4 5

Service Quality 1 2 3 4 5

Response Time 1 2 3 4 5

Repair Time 1 2 3 4 5

Spare Parts Cost 1 2 3 4 5

Technical Assistance Cost 1 2 3 4 5

Environment Friendly 1 2 3 4 5

9. What are the different services you are getting from your current supplier in general?

10. During commercial phase does your supplier is in constant touch with you?

Not at allinvolved

1 2 3 4 5Highly

involved

11. Below are product characteristics one might consider when purchasing a bus A/C. Pleasedistribute 100 points among the four characteristic to you in your decision to purchase?

PriceBrandName

After SaleService

Advertising

Please make sure that your total equals 100 points.


12. Please rate the below listed parameters as per your experience with your current supplier:

ParametersHighly

DissatisfiedHighly

Satisfied

Parts availability 1 2 3 4 5

Technical assistance 1 2 3 4 5

Bus Operator Training 1 2 3 4 5

Product Design 1 2 3 4 5

Service Productivity 1 2 3 4 5

Service Quality 1 2 3 4 5

Response Time 1 2 3 4 5

Repair Time 1 2 3 4 5

Spare Parts Cost 1 2 3 4 5

Technical Assistance Cost 1 2 3 4 5

Installation Time 1 2 3 4 5

Cooling Efficiency 1 2 3 4 5

Installation Cost 1 2 3 4 5

Value for Money 1 2 3 4 5

(Visiting Card)Thank You



Appendix 12: Principal Component Analysis for expected after sales service

Factor Analysis

Correlation Matrixa

Technical_Assistance Operator_Training Application_Design Service_Productivity Response_Time Repair_Time Spare_Part_Cost

Correlation Technical_Assistance 1.000 .377 .626 .113 .642 .113 .769

Operator_Training .377 1.000 .628 -.366 .203 -.366 .369

Application_Design .626 .628 1.000 .093 .528 .093 .769

Service_Productivity .113 -.366 .093 1.000 .417 .417 .209

Response_Time .642 .203 .528 .417 1.000 .417 .575

Repair_Time .113 -.366 .093 .417 .417 1.000 .209

Spare_Part_Cost .769 .369 .769 .209 .575 .209 1.000

Sig. (1-tailed) Technical_Assistance .092 .008 .350 .007 .350 .001

Operator_Training .092 .008 .099 .243 .099 .097

Application_Design .008 .008 .376 .026 .376 .001

Service_Productivity .350 .099 .376 .069 .069 .237

Response_Time .007 .243 .026 .069 .069 .016

Repair_Time .350 .099 .376 .069 .069 .237

Spare_Part_Cost .001 .097 .001 .237 .016 .237


Correlation Matrixa


Correlation Technical_Assistance 1.000 .377 .626 .113 .642 .113 .769

Operator_Training .377 1.000 .628 -.366 .203 -.366 .369

Application_Design .626 .628 1.000 .093 .528 .093 .769

Service_Productivity .113 -.366 .093 1.000 .417 .417 .209

Response_Time .642 .203 .528 .417 1.000 .417 .575

Repair_Time .113 -.366 .093 .417 .417 1.000 .209

Spare_Part_Cost .769 .369 .769 .209 .575 .209 1.000

Sig. (1-tailed) Technical_Assistance .092 .008 .350 .007 .350 .001

Operator_Training .092 .008 .099 .243 .099 .097

Application_Design .008 .008 .376 .026 .376 .001

Service_Productivity .350 .099 .376 .069 .069 .237

Response_Time .007 .243 .026 .069 .069 .016

Repair_Time .350 .099 .376 .069 .069 .237

Spare_Part_Cost .001 .097 .001 .237 .016 .237

a. Determinant = .016


Inverse of Correlation Matrix


Technical_Assistance 3.193 .034 .133 .434 -1.351 .434 -1.976

Operator_Training .034 3.072 -2.103 1.060 -.637 1.060 .379

Application_Design .133 -2.103 4.101 -.442 -.201 -.442 -2.179

Service_Productivity .434 1.060 -.442 1.773 -.869 .059 -.269

Response_Time -1.351 -.637 -.201 -.869 2.683 -.869 .251

Repair_Time .434 1.060 -.442 .059 -.869 1.773 -.269

Spare_Part_Cost -1.976 .379 -2.179 -.269 .251 -.269 4.024

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .668

Bartlett's Test of Sphericity Approx. Chi-Square 40.661

Df 21

Sig. .006


Anti-image Matrices


Anti-image

Covariance

Technical_Assistance .313 .003 .010 .077 -.158 .077 -.154

Operator_Training .003 .326 -.167 .195 -.077 .195 .031

Application_Design .010 -.167 .244 -.061 -.018 -.061 -.132

Service_Productivity .077 .195 -.061 .564 -.183 .019 -.038

Response_Time -.158 -.077 -.018 -.183 .373 -.183 .023

Repair_Time .077 .195 -.061 .019 -.183 .564 -.038

Spare_Part_Cost -.154 .031 -.132 -.038 .023 -.038 .248

Anti-image

Correlation

Technical_Assistance .728a .011 .037 .182 -.462 .182 -.551

Operator_Training .011 .544a -.592 .454 -.222 .454 .108

Application_Design .037 -.592 .706a -.164 -.061 -.164 -.536

Service_Productivity .182 .454 -.164 .556a -.399 .033 -.101

Response_Time -.462 -.222 -.061 -.399 .705a -.399 .076

Repair_Time .182 .454 -.164 .033 -.399 .556a -.101

Spare_Part_Cost -.551 .108 -.536 -.101 .076 -.101 .734a

a. Measures of Sampling Adequacy(MSA)


Communalities

Initial Extraction

Technical_Assistance 1.000 .742

Operator_Training 1.000 .817

Application_Design 1.000 .810

Service_Productivity 1.000 .658

Response_Time 1.000 .740

Repair_Time 1.000 .658

Spare_Part_Cost 1.000 .805

Extraction Method: Principal Component Analysis.

Total Variance Explained

Component

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 3.322 47.461 47.461 3.322 47.461 47.461 3.271 46.730 46.730

2 1.907 27.245 74.706 1.907 27.245 74.706 1.958 27.976 74.706

3 .583 8.333 83.040

4 .473 6.756 89.796

5 .416 5.937 95.733

6 .166 2.370 98.103


7 .133 1.897 100.000



Component Matrixa

Component

1 2




Response_Time .797

Service_Productivity .765

Repair_Time .765

Operator_Training .501 -.752


a. 2 components extracted.


Rotated Component Matrixa

Component

1 2




Response_Time .720 .471

Service_Productivity .802

Repair_Time .802



Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 3 iterations.

Component Transformation Matrix

Component 1 2

1 .982 .190

2 -.190 .982




Component Score Coefficient Matrix

Component

1 2

Technical_Assistance .261 .010


Application_Design .280 -.076

Service_Productivity .003 .409


Repair_Time .003 .409

Spare_Part_Cost .267 .041



Component

1 2

Technical_Assistance .261 .010


Application_Design .280 -.076

Service_Productivity .003 .409


Repair_Time .003 .409

Spare_Part_Cost .267 .041



Component Scores.


Appendix 13: Principal Component Analysis for perceived after sales service

Correlation Matrixa

Parts

Availability

Technical

Assistance

Operator

Training Product Design

Service

Productivity Service Quality Response Time Repair Time

Correlation Parts Availability 1.000 .726 .717 .577 .467 .674 .559 .552

Technical Assistance .726 1.000 .696 .661 .330 .338 .672 .628

Operator Training .717 .696 1.000 .592 .538 .469 .512 .565

Product Design .577 .661 .592 1.000 .400 .387 .582 .487

Service Productivity .467 .330 .538 .400 1.000 .758 .679 .411

Service Quality .674 .338 .469 .387 .758 1.000 .613 .334

Response Time .559 .672 .512 .582 .679 .613 1.000 .661

Repair Time .552 .628 .565 .487 .411 .334 .661 1.000

Sig. (1-tailed) Parts Availability .002 .002 .015 .046 .004 .019 .020

Technical Assistance .002 .003 .005 .124 .119 .004 .008

Operator Training .002 .003 .013 .024 .045 .031 .018

Product Design .015 .005 .013 .078 .086 .015 .039

Service Productivity .046 .124 .024 .078 .001 .004 .072

Service Quality .004 .119 .045 .086 .001 .010 .122

Response Time .019 .004 .031 .015 .004 .010 .005

Repair Time .020 .008 .018 .039 .072 .122 .005


Correlation Matrixa

Parts

Availability

Technical

Assistance

Operator


Service


Correlation Parts Availability 1.000 .726 .717 .577 .467 .674 .559 .552

Technical Assistance .726 1.000 .696 .661 .330 .338 .672 .628

Operator Training .717 .696 1.000 .592 .538 .469 .512 .565

Product Design .577 .661 .592 1.000 .400 .387 .582 .487

Service Productivity .467 .330 .538 .400 1.000 .758 .679 .411

Service Quality .674 .338 .469 .387 .758 1.000 .613 .334

Response Time .559 .672 .512 .582 .679 .613 1.000 .661

Repair Time .552 .628 .565 .487 .411 .334 .661 1.000

Sig. (1-tailed) Parts Availability .002 .002 .015 .046 .004 .019 .020

Technical Assistance .002 .003 .005 .124 .119 .004 .008

Operator Training .002 .003 .013 .024 .045 .031 .018

Product Design .015 .005 .013 .078 .086 .015 .039

Service Productivity .046 .124 .024 .078 .001 .004 .072

Service Quality .004 .119 .045 .086 .001 .010 .122

Response Time .019 .004 .031 .015 .004 .010 .005

Repair Time .020 .008 .018 .039 .072 .122 .005

a. Determinant = .002


Inverse of Correlation Matrix

Parts Availability

Technical

Assistance Operator Training Product Design

Service


Parts Availability 5.235 -2.487 -1.107 -.214 1.129 -3.495 1.316 -.763

Technical Assistance -2.487 4.988 -1.342 -.596 .925 1.786 -2.729 .114

Operator Training -1.107 -1.342 3.292 -.429 -1.624 .460 1.240 -.504

Product Design -.214 -.596 -.429 2.011 -.006 .063 -.516 .078

Service Productivity 1.129 .925 -1.624 -.006 3.858 -2.203 -1.665 -.032

Service Quality -3.495 1.786 .460 .063 -2.203 4.854 -1.541 .818

Response Time 1.316 -2.729 1.240 -.516 -1.665 -1.541 4.778 -1.421

Repair Time -.763 .114 -.504 .078 -.032 .818 -1.421 2.275

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .766

Bartlett's Test of Sphericity Approx. Chi-Square 59.905

df 28

Sig. .000


Anti-image Matrices

Parts

Availability

Technical

Assistance

Operator


Service

Productivity Service Quality

Response

Time Repair Time

Anti-image Covariance Parts Availability .191 -.095 -.064 -.020 .056 -.138 .053 -.064

Technical Assistance -.095 .200 -.082 -.059 .048 .074 -.114 .010

Operator Training -.064 -.082 .304 -.065 -.128 .029 .079 -.067

Product Design -.020 -.059 -.065 .497 .000 .006 -.054 .017

Service Productivity .056 .048 -.128 .000 .259 -.118 -.090 -.004

Service Quality -.138 .074 .029 .006 -.118 .206 -.066 .074

Response Time .053 -.114 .079 -.054 -.090 -.066 .209 -.131

Repair Time -.064 .010 -.067 .017 -.004 .074 -.131 .440

Anti-image Correlation Parts Availability .732a -.487 -.267 -.066 .251 -.693 .263 -.221

Technical Assistance -.487 .743a -.331 -.188 .211 .363 -.559 .034

Operator Training -.267 -.331 .813a -.167 -.456 .115 .313 -.184

Product Design -.066 -.188 -.167 .954a -.002 .020 -.167 .037

Service Productivity .251 .211 -.456 -.002 .732a -.509 -.388 -.011

Service Quality -.693 .363 .115 .020 -.509 .656a -.320 .246

Response Time .263 -.559 .313 -.167 -.388 -.320 .736a -.431

Repair Time -.221 .034 -.184 .037 -.011 .246 -.431 .856a


Anti-image Matrices

Parts

Availability

Technical

Assistance

Operator


Service

Productivity Service Quality

Response

Time Repair Time

Anti-image Covariance Parts Availability .191 -.095 -.064 -.020 .056 -.138 .053 -.064

Technical Assistance -.095 .200 -.082 -.059 .048 .074 -.114 .010

Operator Training -.064 -.082 .304 -.065 -.128 .029 .079 -.067

Product Design -.020 -.059 -.065 .497 .000 .006 -.054 .017

Service Productivity .056 .048 -.128 .000 .259 -.118 -.090 -.004

Service Quality -.138 .074 .029 .006 -.118 .206 -.066 .074

Response Time .053 -.114 .079 -.054 -.090 -.066 .209 -.131

Repair Time -.064 .010 -.067 .017 -.004 .074 -.131 .440

Anti-image Correlation Parts Availability .732a -.487 -.267 -.066 .251 -.693 .263 -.221

Technical Assistance -.487 .743a -.331 -.188 .211 .363 -.559 .034

Operator Training -.267 -.331 .813a -.167 -.456 .115 .313 -.184

Product Design -.066 -.188 -.167 .954a -.002 .020 -.167 .037

Service Productivity .251 .211 -.456 -.002 .732a -.509 -.388 -.011

Service Quality -.693 .363 .115 .020 -.509 .656a -.320 .246

Response Time .263 -.559 .313 -.167 -.388 -.320 .736a -.431

Repair Time -.221 .034 -.184 .037 -.011 .246 -.431 .856a

a. Measures of Sampling Adequacy(MSA)


Total Variance Explained

Component

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 4.915 61.434 61.434 4.915 61.434 61.434 3.564 44.553 44.553

2 1.083 13.540 74.975 1.083 13.540 74.975 2.434 30.422 74.975

3 .628 7.851 82.826

4 .488 6.098 88.923

5 .396 4.944 93.868

6 .290 3.628 97.496

7 .117 1.463 98.959

8 .083 1.041 100.000



Communalities

Initial ExtractionParts Availability 1 0.721

Technical Assistance 1 0.861

Operator Training 1 0.694

Product Design 1 0.636

Service Productivity 1 0.862

Service Quality 1 0.88

Response Time 1 0.723

Repair Time 1 0.621



Component Matrixa

Component

1 2

Parts Availability .847

Response Time .843


Technical Assistance .816 -.442

Product Design .749

Repair Time .741

Service Quality .723 .597

Service Productivity .723 .583


a. 2 components extracted.

Rotated Component Matrixa

Component

1 2

Technical Assistance .919

Product Design .766

Repair Time .756


Parts Availability .718 .453

Response Time .610 .593

Service Quality .910

Service Productivity .898



a. Rotation converged in 3 iterations.


Component Transformation Matrix

Component 1 21 0.805 0.594

2 -0.594 0.805


Rotation Method: Varimax with Kaiser Normalization

.


Component

1 2

Parts Availability .172 .057

Technical Assistance .376 -.230

Operator Training .223 -.022

Product Design .273 -.114

Service Productivity -.201 .520

Service Quality -.209 .531

Response Time .075 .188

Repair Time .268 -.110



Component Scores.

Final Report

Documents

challenging project

pg summer project coordinator

certified study

rationale of study

bus market market insights

bus air conditioner

summerproject report

sparing time