Volvo eyes 25% growth in bus sales

Volvo India Ltd is looking at 25 per cent growth in bus sales in the country driven by new markets in the eastern, central and northern regions.

Volvo has a market share of almost 50 per cent in the air-conditioned luxury bus segment. The company sold 300 units in 2004 in a market size of about 600 units a year.

Volvo buses are priced almost 100 per cent premium to local makes. The company official said that even then operators were finding cost economics working in favour of premium products.

"Volvo buses are giving other modes of transport run for its money. For instance, in the Mumbai-Pune route 70 Volvo buses are plying taking a big chunk of business from train," Akash Passey, vice-president, bus division, said.

The company is betting on improved infrastructure to boost sales. Contrary to the belief that demand from tourism sector for such premium products to be high, 80 per cent of the Volvo buses plying in the country are deployed in the inter-city routes.

"With expressways coming up in the country, demand for luxury buses in inter-city routes will improve. When Volvo started three years ago, only 10 routes were connected by AC luxury coaches. It has grown over 80 at present," he added.

Volvo offers more seat space, faster turnaround time and higher usage per day. As a result. operators make money even after buying buses at Rs 58-60 lakh compared with other buses of Rs 25-30 lakh.

The southern routes are now widely covered by Volvo buses. It recently entered the north-east market. The eastern market is also being taken up.

Bus division contributes 20-22 per cent of Volvo India's turnover. The other divisions include trucks, construction equipment and penta (industrial/marine engines). Its manufacturing facility is located at Bangalore.