By K. Gopalakrishnan
Volvo city buses will make them debut in six new cities across India and many more are expected, thanks to the JNNURM order. Volvo is targeting an increase in production from 30 to 50 per cent during the current year compared to 2008 when the company sold 440 buses. The growth comes from both the city and inter-city segments with the city segment contributing significantly.
In an interview to MOTORINDIA, Mr. Akash Passey, Managing Director, Volvo Buses India Ltd., said: “The JNNURM scheme has set the direction and this probably is the first step. Hopefully, this will lead to even greater fillip to bringing in efficient and modern public transport for our cities, where we can all enjoy a better quality of city mobility”.
Excerpts from the interview:
Question: How is the JNNURM order shaping up? Has there been any delay in execution or is it on-track?
Answer: In the cities of our interest the orders are already in place and we have begun executing deliveries. We already began deliveries in Bangalore and Mysore and will do so soon in other cities where we have orders. We probably made the first deliveries under this project. The original requirement to complete all deliveries by June may not be possible, but we will actually attempt to complete our deliveries close to the new deadlines which is later this year.
The JNNURM scheme eventually is going to be of high value to cities because it has moved away from subscribing to buses built on truck chassis and has promoted an upgradation of typical buses while at the same time it motivates the induction of modern buses such as the low-floor that we offer. While the former will provide a better level of comfort and convenience to the bus passengers the second option will play a big role to move people from their personal vehicles to public transport. This is a very important step, because the growth in personal vehicles has been much faster than the expansion of cities.
Besides, it’s also not merely about how many vehicles we have in a city, but the real issue is that more and more people want to be at the same place at the same time. Popularising public transport and making it motivating enough for personal vehicle owners to switch over will be a key factor to provide relief to our city infrastructure. Else, soon, travelling in a car will become plain impossible or a luxury which no one – either the driver or the other road users – can afford to have.
The JNNURM scheme has set the direction, and this probably is the first step. Hopefully, this will even give greater fillip to bringing in efficient and modern public transport for our cities, where we can all enjoy a better quality of city mobility.
Q: Till date, how many buses have been ordered? What is Volvo’s share of business from the JNNURM order placed so far? Do you expect additional orders to come from the pending orders?
A: We cannot say the exact amount that has been ordered because this includes segments of buses we do not participate in. Possibly, over 8,000 buses have been already ordered by the cities. At Volvo, we have a significant share when it comes to low floor AC city buses minus Delhi where we are yet to offer a CNG solution. While we cannot comment on the numbers we can say that we will add another 6 cities to our current list of 4 cities where Volvo city buses are in service. We hope to see some more orders, yes.
Q: Which are the new cities opting for Volvo city buses?
A: The new cities include Navi Mumbai, Kochi, Thiruvananthapuram, Kolkata, Hyderbad right now.
Q: How are the orders in the coach segment – both for single and multi-axle buses? Is there demand revival in the private operator segment? How is the response for the multi-axle buses and how many of these buses are on road?
A: It is still tough for the private operators as the liquidity crunch and the impact of financing is still hard. But we see some bottoming out and hope the situation improves following this season. Despite this situation, we have sold a good number of inter-city buses – a result of close customer relationships and their faith in us, even as this period continues to be tough. The orders for inter-city buses this year number over 150 nos. already.
The response to the multi-axle bus has been very good – the demand has picked up faster than expected, and we already have close to 60 of them running on our roads.
Q: With all these orders in place, how does the current order book stand for Volvo, both city buses and coaches (single and multi-axle)?
A: While we cannot share the exact numbers it’s safe to say that we will be upping our production by over 30-50 per cent and that includes orders from both coaches and city buses. We are running a healthy order book. In fact even when the downturn hit the industry around October last year, we spent much more time, than typical – with our customers across the country. With this, we managed to operate in sync with our segment demand- all through the initial months. As a result we did not require to close our production line even for a single day. This is a very important achievement for us – primarily because Volvo Buses as a complete bus company and its factory is just 18 months old and I feel proud that our industrial system, coupled with our customer interface has managed to display such flexibility and forward planning.
Q: Does this take care of the capacity and targets for the current year? What are the revised targets for the current year?
A: Yes, it does and instead we will increase our production by over 30-50 per cent. One reason is that we have spent a lot of time in the past year in building a lean production system at the highest quality level. Our production throughput times today are a record within the group. Of course, we have the benefit of a factory that has been built upon the best practises adopted from various Volvo Bus Factories across the world.
Q: A couple of months back you had announced the launch of Volvo Advisory services? How is the initiative shaping up? Have you already started working with any of the metros?
A: In the future, we will place a lot of focus on soft services and this is the starting step. We have already commenced some activity with our key customers and expect to see results in the coming months. We are also begun establishing the base for our IT/IS systems as a tool for profitability and efficiency for our customer fleets.
Q: In our last interaction you had mentioned that you would start exports of buses this year? With good orders in the domestic market, would you be able to focus on exports during the current year? When do you plan to start exports and which are the first few markets you will start with?
A: The factory is slated for exports right from the start. Our plan for exports is not until late next year, so there is no conflict with respect to domestic demand levels. The various markets could be anywhere within the Volvo markets around the world, and it’s a little too early to pinpoint the exact markets where we will sell.
Q: Globally, Volvo has been very successful with articulated buses in many markets, particularly in cities which have adopted BRTS. Are you seriously considering introducing articulated buses in India too?
A: Yes, anything is a possibility here. Volvo has one of the widest product programs in buses, and we are ready to bring in any product from the Volvo stable as soon as we can establish the need. As the pace picks up of changes in our cities, we hope that the circumstances are built to do so – but right now its not possible to indicate ‘if and when’.
Q: Are you planing any variants of the existing product range, like sleeper berths in the coach segment which is fast growing?
A: Strategically, it is not possible to discuss on the new products or variants which we are working on. However, the fact is that we have kept a good momentum in our presence in India – even when we were the only player. We have upgraded the 4x2 coach 4 times since its entry and now added the city bus and multi-axle into our portfolio. We set up a new factory which builds complete buses and introduced the multi-axle and our consultancy services in the last 18 months. The momentum will continue in one-way or the other. We are currently the first company to provide complete bus solutions under one roof with a singular focus on buses. We today offer the entire gamut of services – from after-sales, driver training to supply of product and advisory services. The complete bus is built within the Volvo System. We will strengthen this position in the days to come.
Q: What about the current service infrastructure? Have you added any new facilities?
A: We have 38 service and parts centers across India supporting our buses. Additionally, we provide on-site support to our customers where the fleets are concentrated in one location. In the last year we established about 5 new support points in the country.
Q: Lastly, it’s been close to 7 years since the launch of Volvo buses in India. I am sure there is a significant population of Volvo buses in the second-hand market. Is there any specific program for second-hand Volvo buses? How do you plan to handle these used buses?
Volvo city buses will make them debut in six new cities across India and many more are expected, thanks to the JNNURM order. Volvo is targeting an increase in production from 30 to 50 per cent during the current year compared to 2008 when the company sold 440 buses. The growth comes from both the city and inter-city segments with the city segment contributing significantly.
In an interview to MOTORINDIA, Mr. Akash Passey, Managing Director, Volvo Buses India Ltd., said: “The JNNURM scheme has set the direction and this probably is the first step. Hopefully, this will lead to even greater fillip to bringing in efficient and modern public transport for our cities, where we can all enjoy a better quality of city mobility”.Excerpts from the interview:
Question: How is the JNNURM order shaping up? Has there been any delay in execution or is it on-track?
Answer: In the cities of our interest the orders are already in place and we have begun executing deliveries. We already began deliveries in Bangalore and Mysore and will do so soon in other cities where we have orders. We probably made the first deliveries under this project. The original requirement to complete all deliveries by June may not be possible, but we will actually attempt to complete our deliveries close to the new deadlines which is later this year.
The JNNURM scheme eventually is going to be of high value to cities because it has moved away from subscribing to buses built on truck chassis and has promoted an upgradation of typical buses while at the same time it motivates the induction of modern buses such as the low-floor that we offer. While the former will provide a better level of comfort and convenience to the bus passengers the second option will play a big role to move people from their personal vehicles to public transport. This is a very important step, because the growth in personal vehicles has been much faster than the expansion of cities.
Besides, it’s also not merely about how many vehicles we have in a city, but the real issue is that more and more people want to be at the same place at the same time. Popularising public transport and making it motivating enough for personal vehicle owners to switch over will be a key factor to provide relief to our city infrastructure. Else, soon, travelling in a car will become plain impossible or a luxury which no one – either the driver or the other road users – can afford to have.
The JNNURM scheme has set the direction, and this probably is the first step. Hopefully, this will even give greater fillip to bringing in efficient and modern public transport for our cities, where we can all enjoy a better quality of city mobility.
Q: Till date, how many buses have been ordered? What is Volvo’s share of business from the JNNURM order placed so far? Do you expect additional orders to come from the pending orders?A: We cannot say the exact amount that has been ordered because this includes segments of buses we do not participate in. Possibly, over 8,000 buses have been already ordered by the cities. At Volvo, we have a significant share when it comes to low floor AC city buses minus Delhi where we are yet to offer a CNG solution. While we cannot comment on the numbers we can say that we will add another 6 cities to our current list of 4 cities where Volvo city buses are in service. We hope to see some more orders, yes.
Q: Which are the new cities opting for Volvo city buses?
A: The new cities include Navi Mumbai, Kochi, Thiruvananthapuram, Kolkata, Hyderbad right now.
Q: How are the orders in the coach segment – both for single and multi-axle buses? Is there demand revival in the private operator segment? How is the response for the multi-axle buses and how many of these buses are on road?
A: It is still tough for the private operators as the liquidity crunch and the impact of financing is still hard. But we see some bottoming out and hope the situation improves following this season. Despite this situation, we have sold a good number of inter-city buses – a result of close customer relationships and their faith in us, even as this period continues to be tough. The orders for inter-city buses this year number over 150 nos. already.
The response to the multi-axle bus has been very good – the demand has picked up faster than expected, and we already have close to 60 of them running on our roads.
Q: With all these orders in place, how does the current order book stand for Volvo, both city buses and coaches (single and multi-axle)?
A: While we cannot share the exact numbers it’s safe to say that we will be upping our production by over 30-50 per cent and that includes orders from both coaches and city buses. We are running a healthy order book. In fact even when the downturn hit the industry around October last year, we spent much more time, than typical – with our customers across the country. With this, we managed to operate in sync with our segment demand- all through the initial months. As a result we did not require to close our production line even for a single day. This is a very important achievement for us – primarily because Volvo Buses as a complete bus company and its factory is just 18 months old and I feel proud that our industrial system, coupled with our customer interface has managed to display such flexibility and forward planning.
Q: Does this take care of the capacity and targets for the current year? What are the revised targets for the current year?A: Yes, it does and instead we will increase our production by over 30-50 per cent. One reason is that we have spent a lot of time in the past year in building a lean production system at the highest quality level. Our production throughput times today are a record within the group. Of course, we have the benefit of a factory that has been built upon the best practises adopted from various Volvo Bus Factories across the world.
Q: A couple of months back you had announced the launch of Volvo Advisory services? How is the initiative shaping up? Have you already started working with any of the metros?
A: In the future, we will place a lot of focus on soft services and this is the starting step. We have already commenced some activity with our key customers and expect to see results in the coming months. We are also begun establishing the base for our IT/IS systems as a tool for profitability and efficiency for our customer fleets.
Q: In our last interaction you had mentioned that you would start exports of buses this year? With good orders in the domestic market, would you be able to focus on exports during the current year? When do you plan to start exports and which are the first few markets you will start with?
A: The factory is slated for exports right from the start. Our plan for exports is not until late next year, so there is no conflict with respect to domestic demand levels. The various markets could be anywhere within the Volvo markets around the world, and it’s a little too early to pinpoint the exact markets where we will sell.
Q: Globally, Volvo has been very successful with articulated buses in many markets, particularly in cities which have adopted BRTS. Are you seriously considering introducing articulated buses in India too?
A: Yes, anything is a possibility here. Volvo has one of the widest product programs in buses, and we are ready to bring in any product from the Volvo stable as soon as we can establish the need. As the pace picks up of changes in our cities, we hope that the circumstances are built to do so – but right now its not possible to indicate ‘if and when’.
Q: Are you planing any variants of the existing product range, like sleeper berths in the coach segment which is fast growing?
A: Strategically, it is not possible to discuss on the new products or variants which we are working on. However, the fact is that we have kept a good momentum in our presence in India – even when we were the only player. We have upgraded the 4x2 coach 4 times since its entry and now added the city bus and multi-axle into our portfolio. We set up a new factory which builds complete buses and introduced the multi-axle and our consultancy services in the last 18 months. The momentum will continue in one-way or the other. We are currently the first company to provide complete bus solutions under one roof with a singular focus on buses. We today offer the entire gamut of services – from after-sales, driver training to supply of product and advisory services. The complete bus is built within the Volvo System. We will strengthen this position in the days to come.
Q: What about the current service infrastructure? Have you added any new facilities?
A: We have 38 service and parts centers across India supporting our buses. Additionally, we provide on-site support to our customers where the fleets are concentrated in one location. In the last year we established about 5 new support points in the country.
Q: Lastly, it’s been close to 7 years since the launch of Volvo buses in India. I am sure there is a significant population of Volvo buses in the second-hand market. Is there any specific program for second-hand Volvo buses? How do you plan to handle these used buses?
A: This is an interesting area for sure. We do offer support in resale of vehicles for our customers, but more as a facilitator. This is still to develop into an independent program. The same applies to refurbishment of buses. This will be an area where we will take concrete steps in the coming days.
