How Volvo transformed the way Indian's travel

- Mohammed Asrar

“How Volvo transformed the Indian travelling”

• Volvo Group on Thursday (15/11/2012) said it plans to invest Rs 3,800 crore separately and through a joint venture in its Indian operations.

• Volvo Group President and Chief Executive Officer Olof Persson told newspersons that the group plans to invest Rs 2,000 crore in India to expand its bus, construction equipment as well as truck business.

• Separately, VE Commercial Vehicles Ltd, the four-year-old 50:50 joint venture between the Volvo Group and Eicher Motors Ltd, will invest Rs 1,800 crore in the next couple of years.

• The investment will be made towards modernisation of Eicher product lines, exports and setting up of new engine and bus body plants and other businesses.

VOLVO draws up Rs 2,000-cr investment

roadmap for India

In its Pithampur plant in Madhya Pradesh, the capacity will be expanded to produce one lakh engines by 2016. About 30 per cent of these engines will also be exported to European countries.

VOLVO ENTRY INTO INDIA

The company showcased its model at DELHI AUTO EXPO 1998. The bus drew attention and was a show stopper at the event.

The Swedish company bid for a tender by the Delhi Transport Corporation (DTC) in 1998 while showcasing its B10LE low-entry city bus in several cities.

In 2000, the company imported two Volvo B7R inter-city buses from Hong Kong and Singapore, and sent them out on a six-month demonstration drive.

CHALLENGES TO VOLVO BUSES INDIA

The coach prompted more weighty concerns and the buses had rear engines but operators were used to front-engine buses.

Volvo city buses cost up to 10 times more than those used by state transport corporations. The B7R cost five times more than a 'deluxe' bus.

Meanwhile, the DTC tender was shelved.

Selling to state companies was proving tough.

Inter-city buses are 12 meters long everywhere in the world. But in India, bus length was capped at 11 meters.

Operators were concerned whether Volvo would provide maintenance centers every 25 km, as was the usual practice.

THE COMPANY CHANGED THE WAY INDIANS TRAVEL.

A decade ago, buses were more or less a by-product of trucks. They were built on truck chassis. Bus body-builders bought chassis primarily from Telco (now Tata Motors) and Ashok Leyland.

The difference between city and inter-city buses, or regular and 'deluxe' ones, was reclining seats and a stylish paint job.

In 2001, Volvo Buses India sold 20 coaches. By August-2012, 5,000 units of them were running on Indian roads.

Volvo now has 76 per cent of the Indian luxury bus market.

HOW VOLVO DID IT ? The changing economic landscape strengthened the resolve. The

company approached private operators who ran inter-city 'deluxe' buses and asked them to charge higher for tickets.

Got the regulation changed  brought in buses with very little suspension and ordinary brakes.

To persuade operators that Volvos were profitable, the sales team drew up a lifecycle cost comparison.

The biggest advantage was that they could run for 22 hours without maintenance.

The Volvo gave maintenance for every 400 kms.

The Volvo targeted people with higher per capita income, more awareness about luxury, and increasing migration to cities from Tier-II and Tier-III towns."

Example: Mumbai-based Neeta Tours and Travels, which had 20 Volvos in 2004, figured it could serve seven destinations. A bus could leave Ahmedabad at 10 p.m., reach Mumbai at 6 a.m., then go to Pune and back, and then head back to Ahmedabad at 10 p.m. Operators could also focus on sprucing up service with hot towels and entertainment. This also meant they could raise ticket prices by as much as Rs 100 on some routes.

THE ROAD TO SUCCESS

CHANGE STRATEGY Volvo brought in its inter-city bus when it saw the market was not ready for a

city bus.

SELL THE CONCEPT, NOT JUST THE PRODUCT Volvo engaged with all stakeholders - from operators to passengers to drivers -

to sell its buses.

USE MACRO CHANGES TO YOUR ADVANTAGE When Volvo saw that increasing congestion and growing environmental

awareness were making public transport attractive, it brought back the city bus.

CHANGE THE GAMEWhen the competition started to close in on Volvo, it introduced products that would increase the number of passengers.

Today, the Volvo intercity coaches traverse all major routes in India. In the city bus segment, Volvo buses operate across 12 cities in India

Volvo Buses in India also exports to South Africa, Bangladesh and Sri Lanka. At present, there are about 5,000 Volvo buses operating in the SAARC region, both in the city and inter-city segments.

The company recently unveiled its New Range of Buses.

With this Volvo has become the only bus manufacturer in India with the largest range of high-performing buses comprising 10 models and variants.

Customers now have the Power of Choice in high-performing buses like never before.

VOLVO AT PRESENT -

THANK YOU