Scania Commercial Vehicles (SCV) plans to enter the inter-city luxury bus segment by the first half of next year, pitting itself against segment leader Volvo and Mercedes-Benz.

Priced above Rs 80 lakh, the Volkswagen Group company will initially import fully-built buses from Europe, before starting domestic production of the chassis and body at its upcoming plant near Bangalore. The inter-city bus segment size is currently at about 1,000 buses a year.

“We will get a test bus into India this September. As volumes increase, we will start local production, though the engines will still be imported. We're also looking at the city bus segment,” Mr Henrik Fagrenius, Managing Director, SCV India, told Business Line .

He added that fresh investment for buses will go into the 25-acre Karnataka facility, over the Rs 150 crore it has already committed. To be operational by early 2013, the plant will initially assemble trucks and make bus chassis.

With sights firmly on the premium segment (size of 2,000 units a year), the company will also launch new trucks in the 25-49 tonne range by April next year. This segment is currently serviced by Volvo, apart from another firm incidentally also part of the Volkswagen Group – Man.

“We're getting three test trucks by about this June. We will then start importing the knocked-down kits by April next year for launch. We're very positive about demand in India and believe that the premium segment within medium and heavy CVs has a strong potential,” Mr Fagrenius said.

Scania also has a tie-up with domestic firm Larsen & Toubro, for marketing its 8X4 tipper truck used in mining applications. Demand from the segment, however, has waned in 2011-12 due to the mining ban in Karnataka. The L&T tie-up also extends to a common product development centre.

The company aims to sell about 2,000 trucks, 1,000 buses and 1,500 engines a year in the Indian market within the next five years.

>roudra.b@thehindu.co.in

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