How Volvo transformed the way Indian's travelPresentation Transcript
• Volvo Group on Thursday (15/11/2012) said it plans to invest Rs
3,800 crore separately and through a joint venture in its Indian
• Volvo Group President and Chief Executive Officer Olof Persson
told newspersons that the group plans to invest Rs 2,000 crore in
India to expand its bus, construction equipment as well as truck
• Separately, VE Commercial Vehicles Ltd, the four-year-old 50:50
joint venture between the Volvo Group and Eicher Motors Ltd, will
invest Rs 1,800 crore in the next couple of years.
• The investment will be made towards modernisation of Eicher
product lines, exports and setting up of new engine and bus body
plants and other businesses.
In its Pithampur plant in Madhya Pradesh, the capacity will be expanded
to produce one lakh engines by 2016. About 30 per cent of these
engines will also be exported to European countries.
VOLVO ENTRY INTO INDIA
The company showcased its model at DELHI AUTO EXPO 1998. The
bus drew attention and was a show stopper at the event.
The Swedish company bid for a tender by the Delhi Transport
Corporation (DTC) in 1998 while showcasing its B10LE low-entry city
bus in several cities.
In 2000, the company imported two Volvo B7R inter-city buses from
Hong Kong and Singapore, and sent them out on a six-month
CHALLENGES TO VOLVO BUSES INDIA
The coach prompted more weighty concerns and the buses had rear
engines but operators were used to front-engine buses.
Volvo city buses cost up to 10 times more than those used by state
transport corporations. The B7R cost five times more than a 'deluxe' bus.
Meanwhile, the DTC tender was shelved.
Selling to state companies was proving tough.
Inter-city buses are 12 meters long everywhere in the world. But in India,
bus length was capped at 11 meters.
Operators were concerned whether Volvo would provide maintenance
centers every 25 km, as was the usual practice.
THE COMPANY CHANGED THE WAY INDIANS
A decade ago, buses were more or less a by-product of trucks. They
were built on truck chassis. Bus body-builders bought chassis primarily
from Telco (now Tata Motors) and Ashok Leyland.
The difference between city and inter-city buses, or regular and 'deluxe'
ones, was reclining seats and a stylish paint job.
In 2001, Volvo Buses India sold 20 coaches. By August-2012, 5,000
units of them were running on Indian roads.
Volvo now has 76 per cent of the Indian luxury bus market.
HOW VOLVO DID IT ?
The changing economic landscape strengthened the resolve. The company
approached private operators who ran inter-city 'deluxe' buses and asked
them to charge higher for tickets.
Got the regulation changed brought in buses with very little suspension and
To persuade operators that Volvos were profitable, the sales team drew up a
lifecycle cost comparison.
The biggest advantage was that they could run for 22 hours without
The Volvo gave maintenance for every 400 kms.
The Volvo targeted people with higher per capita income, more awareness
about luxury, and increasing migration to cities from Tier-II and Tier-III
Example: Mumbai-based Neeta Tours and Travels, which had 20 Volvos
in 2004, figured it could serve seven destinations. A bus could leave
Ahmedabad at 10 p.m., reach Mumbai at 6 a.m., then go to Pune and
back, and then head back to Ahmedabad at 10 p.m. Operators could
also focus on sprucing up service with hot towels and entertainment.
This also meant they could raise ticket prices by as much as Rs 100 on
THE ROAD TO SUCCESS
Volvo brought in its inter-city bus when it saw the market was not ready for a city
SELL THE CONCEPT, NOT JUST THE PRODUCT
Volvo engaged with all stakeholders - from operators to passengers to drivers -
to sell its buses.
USE MACRO CHANGES TO YOUR ADVANTAGE
When Volvo saw that increasing congestion and growing environmental
awareness were making public transport attractive, it brought back the
CHANGE THE GAME
When the competition started to close in on Volvo, it introduced products that
would increase the number of passengers.
Today, the Volvo intercity coaches traverse all major routes in India. In
the city bus segment, Volvo buses operate across 12 cities in India
Volvo Buses in India also exports to South Africa, Bangladesh and Sri
Lanka. At present, there are about 5,000 Volvo buses operating in the
SAARC region, both in the city and inter-city segments.
The company recently unveiled its New Range of Buses.
With this Volvo has become the only bus manufacturer in India with the
largest range of high-performing buses comprising 10 models and
Customers now have the Power of Choice in high-performing buses like
VOLVO AT PRESENT -