Scania wants a big pie of luxe bus market

The $10.7-billion Swedish commercial vehicles (CV) giant Scania is aiming at a sizeable chunk of the Indian premium and luxury bus market.

In India, around 85 per cent of passenger transportation happens on-road, and many take the bus. As the economy grows, the premium bus segment is breathing steadily, having seen sales of 450 units last year, and expected to sell 800 units this year. Only a handful of players have been developing products in the segment.

The company plans to sell around 350-400 buses manufactured at a new facility in Narasapura,Karnataka, which was inaugurated on Monday. The 1,000-unit capacity facility will roll out three variants of buses including (double and triple-axle) 12, 13.7 and 14.5-metre vehicles. The unit, which employs around 300 people, also sources components from nearby ancillaries, giving rise to over 70 per cent localised products, which may localise to 80 per cent soon.

“The Make in India initiative is driving us to work towards innovation and indigenous development. The country has provided us with good production opportunities, sales, and also scope for engineering, IT and R&D capabilities (with partner L&T). We have created a favourable supplier ecosystem here and are definitely bullish on India,” Scania India Managing Director Anders Grundstrommer told Deccan Herald.

The company is also experimenting with bio-ethanol and biogas-run buses. Scania is also hinting at metro city buses in the long-run. “We see there is growing mobility in cities. Inter-city traffic is also on the rise, calling for more safe buses to be developed. City transport must be made efficient and people must be motivated to take public transport,” Grundstrommer said.  To support these plans, Scania will ramp up the Rs 300-crore facility’s production en route to turning India into a regional export hub, serving the Middle East, Africa, and Southeast Asia.

The company has already received orders to supply 35 luxury buses from the Karnataka State Road Transport Corporation (KSRTC), and 30 buses from the Maharashtra State Road Transport Corporation (MSRTC), besides 150 coaches from private operators.

The first 35 buses will be delivered in April-May, while the next 30 buses will be delivered in June-July.  “Our 2020 vision is to have sold 2,500 buses and 5,000 trucks in India,” Scania CV President and Chief Executive Officer Martin Lundstedt said.