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Private bus firms return to Volvo

Private bus firms return to Volvo
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First Published: Mon, Mar 22 2010. 09 06 PM IST

 Cruising along: Volvo Buses managing director Akash Passey says demand for luxury coaches has risen, sees sales at 550 units in 2010.
Cruising along: Volvo Buses managing director Akash Passey says demand for luxury coaches has risen, sees sales at 550 units in 2010.
Updated: Mon, Mar 22 2010. 09 06 PM IST
Bangalore: Luxury coaches from Volvo Buses India Pvt. Ltd are back in demand among private operators after three years, prompting a slight increase in the firm’s sales target for 2010.
Cruising along: Volvo Buses managing director Akash Passey says demand for luxury coaches has risen, sees sales at 550 units in 2010.
“The private bus market has picked up,” said Akash Passey, managing director at Volvo Buses, a 70:30 joint venture between Sweden’s Volvo Bus Corp. and Jaico Automobile Engineering Co. Pvt. Ltd.
Most large private operators and state-run transport bodies own at least a small fleet of these air-conditioned, low-floor buses, run them on inter-city and inter-state routes and charge a premium.
Passey says private operators are now ordering 20-30 buses as they expand their businesses and replace their fleet after lying low the past three years when orders would typically be for two-four buses.
“The private coach market was less than a hundred units last year. Now we already see a pipeline of couple of hundred units,” said Passey.
Suresh Kumar Sharma, owner of Bangalore-based Sharma Transports, has placed orders for eight Volvo buses; he plans to expand his 65-strong Volvo fleet by 20% this year.
“Last two years, we didn’t have any growth plans. But this year we are looking at new sectors,” said Sharma. According to him, traffic inflow has increased by 20% in the past few months over a year ago.
Passey sees new products such as Volvo’s 13.7m-long, multi-axle bus with eight extra seats driving sales and bringing in 15-20% additional revenue.
But he is unsure how long the demand will last, given the estimated Rs1.5-2 lakh increase in bus prices after the spike in excise duties for key commodities as announced in the Union Budget and the recent fuel price hike.
In August-September, Volvo had to scale down its sales target from 1,000 buses to 400-450 in 2010 due to the slowdown in the long-distance road transport market. With the economy recovering, it has raised its target narrowly to 500-550 buses, almost on par with its 2009 sales of 540 units.
“Our plan to go to 1,000 will go back by one or two years (by the end of 2011 or 2012),” said Passey.
Some 26,000-33,000 buses are sold in India every year. The luxury, air-conditioned variety make up a mere 600-800 a year, according to the luxury bus maker.
Volvo, which sold 70% of its buses to state and city transport corporations in 2009, expects to sell 65-70% to the private sector this year.
poornima.m@livemint.com
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First Published: Mon, Mar 22 2010. 09 06 PM IST