Interview: Akash Passey, Managing Director, Volvo Bus India Pvt. Ltd.

ZW: How do you see the bus market shaping up in India at the moment?

Passey: The marketplace is definitely changing and I feel it's for the better. Customer demands are going up as you have the aspiring middle class who have some level of global exposure and now want to have such facilities in India. On the other hand there are environmental concerns which revolve around depletion of natural resources as well as the congestion of cities. All of this is resulting in people opting for high quality products that can offer a great mileage as well as provide excellent comfort, yet help in the de-congestion of cities.

Having said that, infrastructure is improving, new expressways are being laid everyday and the need for high end buses is what we are witnessing. A completely built bus offered by a global brand like Volvo means that customers get quality, comfort and safety in one single package.

ZW: What about the demand from northern markets? Volvo has had a delayed entry there and your presence is still not as strong as it is in traditional bus markets like South India.

Passey: The north does not have a strong private player penetration in terms of inter city transport. Furthermore, the north has been an area that we did not consciously enter when we set up shop in the country. With the southern markets already being ahead on their demands for inter city buses as well as the fact that we ourselves are located down south meant that it would be easier for us to support and cater to these markets.

Let me add that the northern market might not be as big as the south market is today, but it is growing and we see demand flowing in from tour operators, especially on the Delhi-Agra-Jaipur circuit. Moreover we are gaining orders from state governments who are now opting for Volvo buses for state transport needs.

ZW: What do you have to say about the implementation of the various BRTS systems across the country?

Passey: There is still a need for an ideal BRTS system. By making two centre lanes in a road does not count as a BRTS system. A BRTS is a great system and can do wonders for in-city transport, but it requires a lot more than some bus corridors. There is need to integrate a complete IT based management system that can monitor signals as well as monitor the scheduled timings of buses on the route. Incidentally Volvo has been part of just about every successful BRTS system in the world and we will be a part of the Indian system as well. It's a challenge and there is much more that needs to be done.

ZW: Coming to Volvo buses in India. The company has been present for 10 years now. Where do you feel you stand?

Passey: Today we have 650 employees and are capable of manufacturing 440 buses a year.This figure is set to reach 1000 buses by 2010. We have grown steadily and have literally lead the market on luxury inter city buses and now are focusing on the in city bus business. Volvo has 38 service centres across the country, offers transport consultancy as well as runs a driver training program which has certified over 8000 drivers till date.

Volvo India literally changed the face of the bus industry in terms of offering a fully built bus, instead of a vehicle built on a truck chassis. Furthermore the concept of having a driver focus and optimizing that space has also been lead by us. The ushering of safety and comfort features has also been driven by Volvo buses in India. As a brand we have brought in a sense of aspiration and feel that the possibilities that lie ahead are endless.

ZW: Could you elaborate on the product mix that Volvo has as of now?

Passey: Volvo in India offers two ranges of vehicle.You can either opt for a city bus or an inter city coach. The city bus, namely the BRLE, is a low floor bus that offers easy ingress and egress for passengers, plus it comes fitted with an automatic transmission, which makes it easy for the driver to manage in congested conditions. For inter city travel, Volvo offers the B7R which has dominated the luxury coach class in India till date. Now we have added the 6x2 Multi Axle B9R 9400 which is another step forward in the luxury coach market and just happens to be India's largest and most powerful bus till date.

Till recently we were producing around 90 per cent inter city coaches and 10 per cent city buses, but as of today and thanks to some government push the balance is more at a 50:50 mix of both products.

ZW: Is India ready for a multi-axle bus? What have initial customer reactions been? 

Passey: We have been considering a multi-axle bus for over three years now. As far as India being ready, well it is just another one of those aspects where you have to lead the way. Initial customer reactions have shown that this product has sizeable scope and will be welcomed, especially by big fleet owners. This new bus literally opens a whole new segment in the Indian bus industry.

ZW: So, how do the numbers stack up on this bus?

Passey: The B9R 9400 is priced at Rs. 85 lakh. Thanks to the added length, the bus can seat 53 passengers as compared to the 45 passengers in a B7R. Now the running cost of a B9R is no different from a B7R despite the added length, weight and power, so in effect what happens is that the 8 extra seats on the B9R literally translates to a 20 per cent increase in profit per trip. This makes great business sense for fleet owners and in effect they should break even within a year or two.

Unlike regular buses that have been phased out by operators anywhere between 5-7 years, a Volvo has a lifecycle cost anywhere between 12-15 years. This is also an added benefit for fleet owners as these buses work out to be increasingly profitable over time.

ZW: But what was the need for a multi-axle bus?

Passey: Most inter-city buses in other countries come on multi axles. The added axle offers the ability to carry larger loads as well as manage the dynamics of the bus. By that I mean that the traditional idea of the rear being the most uncomfortable seats in the bus will now be non existent in our B9R 9400. The placement of both the axles and the air suspension all work together to literally make the rear seats the most comfortable in the bus.This obviously is just one advantage.For a fleet owner the multi axle means enhanced space and therefore more profits. It is very European and the world is moving in this direction.

ZW: Is Jaico involved in building the bodies on the new B9R 9400 as well?

Passey: Jaico has a 30 per cent stake in our body building work. They are members of our board and continue to work with us. However management completely lies with Volvo and this relationship works well for both of us.

ZW: What is the localization content on the B9R 9400?

Passey: At present we have managed to have a 30 per cent localization on the product. Most of the body panels are locally sources, whereas the engine and chassis continue to come in as imports. Our doors come from our plant in Europe and the engine comes directly from Sweden.

It does not make sense for us to set up an engine plant for just 500 buses at the moment.

ZW: What level of customer involvement do you have on each bus purchase?

Passey: Customer involvement has always been high at Volvo. Since we offer a completely built product, customers are continuously sending in their color details, decals details and sticker needs. Let me put it this way; a bus is like a lady and you want her to look beautiful and decked up at all times, so everything is done to achieve that!

ZW: You have chosen to continue with a semi integral chassis design for the B9R 9400 as well. Being a significant move forward, did you not feel the need to go in for a complete monocoque construction?

Passey: Indeed, there is no doubt that a monocoque construction is ideal for buses, however our semi integral chassis is designed to be a bus chassis and that makes it ideal for the applications that we have here. India, as a market, is still not there yet, when it comes to monocoque construction.

ZW: You said that you would make 440 buses by the end of this year. What is the roll-out plan?

Passey: That is correct. We are right on target to achieve 440 buses this year. At present we run a single shift on production and 2 shifts on special operations such as the paint shop. At this rate we are able to make a bus from going on the line to roll out in about 25-30 working days.

ZW: What can we expect from Volvo in the future?

Passey: There are challenging times ahead in terms of the economy.A global slowdown will affect all businesses and we expect our customers to become more careful about their spends.

In the domestic market, we will see operators working on providing timely service and expanding their reach, while we give them the necessary support of a superior product that will benefit them on their desired type of application, be it in city routes or inter city transport.

As far as exports are concerned, there is a lot of scope from the Middle East and Africa but that will happen only 1-2 years from now. Right now our hands are full with domestic requirements and the existing export orders to Sri Lanka and Bangladesh.

Speaking about products, well all I can say is that there is more to come, that is for sure, and it is not going to be an articulated city bus.