Volvo gears for a growth ride

Plans launch of hybrid buses and export to Europe; domestic sale grew 26 per cent

Banking on the pickup in demand, Volvo Buses is gearing up for the next leg of growth in India. It plans to introduce hybrid buses, step up exports and promote public-private partnerships (PPPs) in city buses.

“We have 2,000 hybrid buses running globally. In June, we launched a fully-electric bus for demonstration. Its commercial production will start in 2017 in Sweden,” said Akash Passey, senior vice-president of Sweden-based Volvo Buses.

Passey, who looks after the international business of Volvo buses, and is also the chairman of Volvo Buses India said the company will work on electro mobility and hybrid buses in India. “A hybrid bus offers savings of 35-40 per cent. You recover the price difference in three to five years. We will make hybrid buses in India. We already see high interest from our customers in India. The government is offering a significant subsidy on electric vehicles,” he said.

Volvo has the capacity to make 1,500 buses every year at its plant near Bengaluru, but is operating at about half the capacity currently. “The past three to four years have been tough. Coach demand (used for inter-city travel) had disappeared due to the decline in economic activity. We were only making city buses at a lower volume. We see an uptick in demand,” said Passey.

The domestic sale of medium and heavy (commercial) passenger carriers grew 26 per cent in April-July period to 16,184 units. Exports grew about 17 per cent to 3,169 units. “We hope India can come back again to our top 10 markets in the next two years.” Volvo sells buses in 203 countries.

Volvo has till date sold about 5,500 buses in India, which ply on intercity routes and within cities, and are operated by state and city-level transport undertakings. Passey said many state undertakings introduced the concept of PPPs in inter-city routes about a decade ago. The PPP allowed a private operator to purchase and run buses under the banner of state undertaking on an agreement. This enabled undertakings to introduce such premium buses without making investments.

“We want to promote PPP in the city segment. A private operator can buy and run it with city corporations in cities like Delhi, Mumbai and Bengaluru.”

Volvo India has been exporting buses made in India to neighbouring countries and South Africa for a few years. Passey said the company will now export to Europe. “It has become competitive to export from India to Europe,” he said.