Mumbai: A decade and half after its low-floor city buses and multi-axle coaches have become synonymous to quality bus rides in India, Volvo Buses India Pvt. Ltd, the local arm of the Swedish auto firm, is looking to re-invent the wheel in the public transport space. On 14 February, Volvo delivered the first batch of five hybrid buses, each costing over ₹ 1 crore, to Navi Mumbai Municipal Transport Corporation.
This is the first commercial launch of a bus with hybrid technology since Faster Adoption of Manufacturing of Hybrid and Electric Vehicles (FAME) came into effect in April 2015. Under the scheme, which is part of the National Electric Mobility Mission Plan 2020, manufacturers of hybrid and electric vehicles, depending on the type of hybrid, mild or strong, get a subsidy. The Volvo 8400 hybrid, categorized as a strong hybrid—it draws power from the electric motor from start to stop—gets a subsidy of ₹ 61 lakh from the government.
In an interview on the sidelines of a Make in India event in Mumbai on 15 February, Martin Lundstedt, president and chief executive of Volvo Group, said the company is now looking to offer sustainable solutions with its hybrid buses. Edited excerpts:
You are launching a hybrid bus at a time when there’s a lot of emphasis on curbing pollution and de-congesting cities. How critical is it in your India innings?
We want to bring a paradigm shift in urban transport. If cities like Mumbai continue to grow economically, the growth must be sustainable. This bus is about taking urban transportation to the next level. We see electro mobility as an opportunity to reduce fuel and time consumption and increase comfort. It not only reduces particulates but also the NOx levels. India is the first among BRIC countries to get the hybrid technology. It’s not about a product but thinking.
How tough was it to meet the cost structure and overcome the technical challenges?
We drew from the long experience we have in this market. Moreover, it’s not about the initial cost of acquisition but the costs one incurs through the life of the vehicle and the improvement in the living condition. We have already been running these buses in Australia and Singapore, where the temperature is similar to India’s. That too helped.
Do you see any scope of bringing more Volvo brands to India?
Given the brand portfolio we have, there are opportunities and I would not exclude anything. It would be stupid to choose one over the other. Will some other brands come into the market place? Maybe, yes, if we feel the need.
How do you plan to leverage India as a production base?
The proof of the pudding is action. We have been a serial investor in India for many years. We have been increasing our business in this country step by step. We must have a full range to exploit the full potential of the market. We are expanding our IT business with HCL Technologies Ltd. We are exporting buses and engines to the European Union. It shows that India has the highest possible standards when it comes to the value chain. Our production base for engines in Pithampur (Madhya Pradesh) is the only one outside Europe. We have been exporting from India a lot of components and expanding research and development. For all good reasons, we will localize further, but it will depend on what gives us a better scale given that we are a global company. We will be exporting more and more than importing in India, that’s the direction we want to move.
You have sold your stake from the parent company, Eicher Motors Ltd. Do we see the equity structure changing?
It will remain the same. It’s working perfect. We have a very good relationship with the Lal family (Vikram Lal and Siddhartha Lal) and the management. The partners are bringing fantastic value to the table. It’s a trusted well-functioning dream. At the end of the day, we share so many values. It’s a very positive example of how two partners can leverage from each other’s strength.