Anders Grundstromer maintains that it is never too late to enter India.
The Senior Vice-President of the Scania group has just taken over as Managing Director of the Indian operations. For five years now, the company has been focusing on the niche heavy trucks business.
Grundstromer will now oversee its foray in the higher volumes-driven intercity bus segment. It is here that Swedish counterpart, Volvo, is a big player and has established itself as a strong luxury brand. This fact, however, does not remotely deter the new MD.
“We were not the first to enter Russia or China either. Scania made its debut in Russia in 1997 when Volvo had already been around for a decade and was the clear market leader with a large (bus) fleet. Today, we are as big as them in the Russian market,” Grundstromer says.
It is his view that a free market is all about competition and a larger choice to the customer. “If you offer something good, it is never too late. Customers know what they need, can afford and what is finally good for them,” he says.
India, according to Grundstromer, is big enough to accommodate a host of big global names right from Volvo to Scania and Mercedes. “We are sure from our market analysis that the premium bus segment will grow in India. The growing middle-class here wants the best in global quality,” he says.
And even while China has been growing faster, Grundstromer admits that a democracy like India has its own set of challenges. “Things may take time in comparison but the growth is eventually sustainable,” he says.
Scania will focus on the premium end of the bus segment in India, keeping in line with a consistent brand policy worldwide be it Sweden, Russia or Brazil. The company also follows a global production system which means that its factories in Sao Paolo, Europe and Bangalore end up making the same vehicle. Synergies are inevitable with greater volumes and economies of scale.
Scania is now carefully looking at a lot of Indian suppliers so long as they meet its exacting quality standards. The response, thus far has been more than encouraging. There are 50 people already working in Bangalore and helping out with R&D for global products. “We have a global supply chain and you will see more Indian suppliers join this fraternity,” Grundstromer says.
Henrik Fagrenius, the outgoing MD who will now take over as Executive Regional Director of South Africa, Asia and Oceania, says this is the first intercity coach “produced 100 per cent by Scania globally”. He sees a big demand from India’s middle-class for quality transport between cities. The pace of infrastructure growth is also encouraging.
“We have had trials with our on-road trucks and found that it is possible to increase average speed dramatically if you have the right power-weight ratio. This shows that there is infrastructure to support this,” he says.