Volvo pins hopes on JNNURM

Swedish commercial vehicles major, Volvo, is banking on the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), for scaling up its Indian operations, in the public transport segment.

The company, which produced more than 400 buses last year, at its plant in Bangalore, is looking at a 25 per cent growth in production in 2009.

In order to prop up demand in the automobile sector, the government had recently announced an incentive scheme under the JNNURM for generating about Rs 4,000 crore business in the sector in the next few months.

Under the scheme, states are to be provided a one-time assistance of up to June this year, for purchase of buses for the urban transport system, in more than 63 cities. Akash Passey, managing director, Volvo Buses India, said the company was now eyeing northern and eastern India markets for sale of Volvo buses to the state transport corporations.

About 50 per cent of the company's production at its Bangalore unit, comprises Volvo 8400 low floor buses, which the company is pitching as public transport. This apart, it produces two other variants of buses in the plant, mainly for inter-city transport. At present, about 2,000 Volvo buses are plying on the roads, with about 500 in the inter-city segment.

The cost of each of the Volvo 8400 is close to Rs 80 lakh. Passey said, the response of plying Volvo 8400 buses in cities like Bangalore, Chennai and Pune had been positive. In Bangalore, about 300 Volvo 8400 buses are on the roads, covering an average of 250 km per day, About 25,000 personal vehicles were off the roads in Bangalore every month, as people preferred Volvo buses, said Passey.

The company is in talks with the West Bengal Surface Transport Corporation (WBSTC), for public usage of Volvo buses on Kolkata roads. The company has already done trial run on select routes in Kolkata.