Big entry into goods segment
Improved road network and the increasing emphasis laid by the State Governments on public transport promotion has helped the bus industry grow despite a general downturn in the commercial vehicle segment. The bus segment posted a growth of nearly 10 per cent during the first quarter of the current financial year.
As part of the series on bus body building, the MOTORINDIA team recently visited the modern factory of HMM Coaches, one of India’s leading manufacturers of bus bodies and a major supplier to Tata Motors. The company was started by Mr. Bhupinder Goel in 1997 mainly to cater to the requirements of Tata Motors which even today continues to be its major customer absorbing close to 80 per cent of the buses made. The company also works with other OEMs like Ashok Leyland and Eicher Motors.
HMM, which has its main bus body building facility in Ambala, has recently established another facility at Khopoli near Mumbai. It has a combined monthly capacity to manufacture close to 750 buses in the two units. The Ambala unit has a built-up capacity of 400 units, while the Khopoli unit will have a capacity of 350 units when production gets started there.
In 2007-08 the company manufactured a total of 2,200 buses. For the current year the target is to manufacture 3,500 buses from Ambala and another 500 buses from Khopoli. In the next financial year Khopoli will be able to turn out 2,400 buses. HMM clocked a turnover of Rs. 81 crores. For the current year the company is targeting a turnover of Rs. 150 crores. The total workforce in the two units together is 1,100.
Mr. Bhupinder Goel, a veteran bus body builder, has been associated with this business for nearly two decades. He is quite unhappy with the slow pace of growth in the bus industry. In the last 10 years the truck segment has witnessed an average growth rate of 12 to 15 per cent, whereas the bus segment registered an average growth rate of three-four per cent against a whopping 26 per cent growth last year.
Mr. Bhupinder Goel attributes the slow growth rate in the bus segment to Government policy regulations. Bus operations in India are still a State subject. None of the States want to do away with control on bus operations, and a bus cannot be put on road without their permission. Another major deterrent is the Government restrictions on routes on which private operators cannot operate.
Focus on goods segment
With more than 15 years of presence in the bus body building, the natural progression for Mr. Goel is to look at providing solutions in the goods segment. With the tractor trailer concept catching up in India, the scope for quality trailer manufacturing is abundant.
Mr. Mannan Goel, Executive Director of the company, who is the son of Mr. Bhupinder Goel, and in charge of the goods business, said: “We have started manufacturing trailers at our plant in Ambala. We are looking at JVs for specialised applications like refrigerated trucks, petroleum tankers and different variants of trailers/tip trailers. Our target is to have 30 to 40 per cent of our business from the cargo segment by 2010”.
HMM has already started selling trailers to private customers and will soon start catering to OEM customers. The company is planning to manufacture products for the cargo segment at both the Ambala and Khopoli plants with two dedicated lines at the latter for the purpose.
The Khopoli plant, set up at an investment of Rs. 30 crores, recently started commercial production. The new plant has been established at an investment of Rs. 30 crores. The absence of major bus manufacturers in the western region and the proximity to port were the factors behind starting the Khopoli plant.
“We have put up a very modern and state-of-the-art manufacturing facility at Khopoli in Maharashtra as there are no major bus manufacturers in the West. Also it is nearer to port which is encouraging chassis manufacturers like Tata Motors and Ashok Leyland to work with us for their export requirements as there is a growing demand for buses in export market. Further the transportation of chassis and built up bodies from one corner of the country to the other is increasing due to rise in fuel cost, our Khopoli plant is ideally located to save on transportation costs”.
LCV passenger segment: the next big growth area
Mr. Goel feels that, the next big wave of growth in the bus market in India will happen in the LCV market in the next 4 to 5 years. Semi-urban and rural areas will drive lot of growth for the LCV segment since most of them are depending on three wheelers and jeeps for their commuting needs. With the growth in infrastructure and with better road connectivity where the Government is making around 368,000 km of new roads and upgrading 370,000 km of roads in the rural areas with and investment of around $26 billion under the Pradhan Mantri Gram Sadak Yojna (source http://www.pmgsy.org/government/security/login/dologin.asp), there will be a growing requirement for a safe public transportation system. Already some of the LCV manufacturers have launched economical versions of rural transport vehicles. Once the government restrictions are lifted on buses and regulations imposed on unsafe vehicles, most of the towns and villages will get connected by a more safe and reliable LCVs based transportation system.
Mr. Goel is also of the opinion that, in the next five years, 50 per cent of the LCV buses getting registered will be air-conditioned. With increase in volumes the cost of air conditioning for buses will drop significantly.
Buses will play a very integral role in meeting and enhancing mobility of population. With improved road infrastructure and connectivity between and within towns and cities, public transportation will be a key priority in any kind of transport policy. Another major evolution in the bus market is the change in expectations of end users in terms of convenience and comfort.
Passengers are increasingly demanding better seating and ride quality from buses, and want it at the right price. The key point here is that customer expectation in terms of quality and aesthetics has evolved far more quickly than expected.
Bus Code
Another important factor which will drive bus market in India is the new Bus Code which will be enforced in April 2009. Mr. Goel says that “the newly formulated bus body regulation is still getting evolved and is primarily concerned with passenger safety and comfort. It takes into account aspects like designing of seats, the vibration and sound level, seat belts among other things”.
“HMM has also recently bagged an order for 50 high-end air-conditioned luxury buses from the Haryana Government which will be executed in the next three months. It will have features comparable to the best of high-end luxury buses on road today. The product is the developmental stage. Once we have the product in the market, we will sell this to other private customers”, adds Mr. Goel.
Semi low-floor and Tarmac coaches
Till date HMM has manufactured and sold over 11,000 buses. The company has also received significant orders from Ashok leyland and Tata Motors for the semi low-floor buses. “Today we are pioneering in the manufacturing of semi low-floor buses. We have executed a major order for supply of 102 semi low-floor bus to Chandigarh city transport corporation and we have also bagged a major order from the Punjab city transportation authorities for semi low-floor buses”.
Another segment which HMM has been specialising in is the Tarmac coaches which have been developed for Ashok leyland. Mr. Ramneek Goel says, “Worldover Cobus has the monopoly in Tarmac coaches and Cobus is the only company which has a front engine low floor tarmac coach. The advantage in front engine Tarmac coach is that the entire passenger seating and standing is at the same level of 380 mm unlike rear engine buses where you will have to climb a few steps in the rear. We have supplied 6 Tarmac coaches for the new Bangalore airport and the another 6 buses have been bought from CoBus”.
Improved road network and the increasing emphasis laid by the State Governments on public transport promotion has helped the bus industry grow despite a general downturn in the commercial vehicle segment. The bus segment posted a growth of nearly 10 per cent during the first quarter of the current financial year.As part of the series on bus body building, the MOTORINDIA team recently visited the modern factory of HMM Coaches, one of India’s leading manufacturers of bus bodies and a major supplier to Tata Motors. The company was started by Mr. Bhupinder Goel in 1997 mainly to cater to the requirements of Tata Motors which even today continues to be its major customer absorbing close to 80 per cent of the buses made. The company also works with other OEMs like Ashok Leyland and Eicher Motors.
HMM, which has its main bus body building facility in Ambala, has recently established another facility at Khopoli near Mumbai. It has a combined monthly capacity to manufacture close to 750 buses in the two units. The Ambala unit has a built-up capacity of 400 units, while the Khopoli unit will have a capacity of 350 units when production gets started there.
In 2007-08 the company manufactured a total of 2,200 buses. For the current year the target is to manufacture 3,500 buses from Ambala and another 500 buses from Khopoli. In the next financial year Khopoli will be able to turn out 2,400 buses. HMM clocked a turnover of Rs. 81 crores. For the current year the company is targeting a turnover of Rs. 150 crores. The total workforce in the two units together is 1,100.
Mr. Bhupinder Goel, a veteran bus body builder, has been associated with this business for nearly two decades. He is quite unhappy with the slow pace of growth in the bus industry. In the last 10 years the truck segment has witnessed an average growth rate of 12 to 15 per cent, whereas the bus segment registered an average growth rate of three-four per cent against a whopping 26 per cent growth last year.
Mr. Bhupinder Goel attributes the slow growth rate in the bus segment to Government policy regulations. Bus operations in India are still a State subject. None of the States want to do away with control on bus operations, and a bus cannot be put on road without their permission. Another major deterrent is the Government restrictions on routes on which private operators cannot operate.Focus on goods segment
With more than 15 years of presence in the bus body building, the natural progression for Mr. Goel is to look at providing solutions in the goods segment. With the tractor trailer concept catching up in India, the scope for quality trailer manufacturing is abundant.
Mr. Mannan Goel, Executive Director of the company, who is the son of Mr. Bhupinder Goel, and in charge of the goods business, said: “We have started manufacturing trailers at our plant in Ambala. We are looking at JVs for specialised applications like refrigerated trucks, petroleum tankers and different variants of trailers/tip trailers. Our target is to have 30 to 40 per cent of our business from the cargo segment by 2010”.
HMM has already started selling trailers to private customers and will soon start catering to OEM customers. The company is planning to manufacture products for the cargo segment at both the Ambala and Khopoli plants with two dedicated lines at the latter for the purpose.The Khopoli plant, set up at an investment of Rs. 30 crores, recently started commercial production. The new plant has been established at an investment of Rs. 30 crores. The absence of major bus manufacturers in the western region and the proximity to port were the factors behind starting the Khopoli plant.
“We have put up a very modern and state-of-the-art manufacturing facility at Khopoli in Maharashtra as there are no major bus manufacturers in the West. Also it is nearer to port which is encouraging chassis manufacturers like Tata Motors and Ashok Leyland to work with us for their export requirements as there is a growing demand for buses in export market. Further the transportation of chassis and built up bodies from one corner of the country to the other is increasing due to rise in fuel cost, our Khopoli plant is ideally located to save on transportation costs”.
LCV passenger segment: the next big growth area
Mr. Goel feels that, the next big wave of growth in the bus market in India will happen in the LCV market in the next 4 to 5 years. Semi-urban and rural areas will drive lot of growth for the LCV segment since most of them are depending on three wheelers and jeeps for their commuting needs. With the growth in infrastructure and with better road connectivity where the Government is making around 368,000 km of new roads and upgrading 370,000 km of roads in the rural areas with and investment of around $26 billion under the Pradhan Mantri Gram Sadak Yojna (source http://www.pmgsy.org/government/security/login/dologin.asp), there will be a growing requirement for a safe public transportation system. Already some of the LCV manufacturers have launched economical versions of rural transport vehicles. Once the government restrictions are lifted on buses and regulations imposed on unsafe vehicles, most of the towns and villages will get connected by a more safe and reliable LCVs based transportation system.
Mr. Goel is also of the opinion that, in the next five years, 50 per cent of the LCV buses getting registered will be air-conditioned. With increase in volumes the cost of air conditioning for buses will drop significantly.
Buses will play a very integral role in meeting and enhancing mobility of population. With improved road infrastructure and connectivity between and within towns and cities, public transportation will be a key priority in any kind of transport policy. Another major evolution in the bus market is the change in expectations of end users in terms of convenience and comfort.
Passengers are increasingly demanding better seating and ride quality from buses, and want it at the right price. The key point here is that customer expectation in terms of quality and aesthetics has evolved far more quickly than expected.
Bus Code
Another important factor which will drive bus market in India is the new Bus Code which will be enforced in April 2009. Mr. Goel says that “the newly formulated bus body regulation is still getting evolved and is primarily concerned with passenger safety and comfort. It takes into account aspects like designing of seats, the vibration and sound level, seat belts among other things”.
“HMM has also recently bagged an order for 50 high-end air-conditioned luxury buses from the Haryana Government which will be executed in the next three months. It will have features comparable to the best of high-end luxury buses on road today. The product is the developmental stage. Once we have the product in the market, we will sell this to other private customers”, adds Mr. Goel.
Semi low-floor and Tarmac coaches
Till date HMM has manufactured and sold over 11,000 buses. The company has also received significant orders from Ashok leyland and Tata Motors for the semi low-floor buses. “Today we are pioneering in the manufacturing of semi low-floor buses. We have executed a major order for supply of 102 semi low-floor bus to Chandigarh city transport corporation and we have also bagged a major order from the Punjab city transportation authorities for semi low-floor buses”.
Another segment which HMM has been specialising in is the Tarmac coaches which have been developed for Ashok leyland. Mr. Ramneek Goel says, “Worldover Cobus has the monopoly in Tarmac coaches and Cobus is the only company which has a front engine low floor tarmac coach. The advantage in front engine Tarmac coach is that the entire passenger seating and standing is at the same level of 380 mm unlike rear engine buses where you will have to climb a few steps in the rear. We have supplied 6 Tarmac coaches for the new Bangalore airport and the another 6 buses have been bought from CoBus”. Despite the entry of OEMs into the fully-built buses segment, Mr. Goel feels that there will still be sufficient scope for independent bus body builders to cater to the growing demand. OEMs will have standard designs and will offer very limited scope for customisation. This is where independent body builders will be able to cater and service to the specific demands of customers.
