Premium bus maker Volvo Buses India is planning to start selling used buses from the fleet owners, a business model popular in the car market till now.
The Sweden-based company already does this business in other parts of the world. Maruti Suzuki (True value), Hyundai (H Promise), Mahindra & Mahindra (First Choice) and even luxury carmakers like Audi (Approved Plus) and BMW (Premium Selection) are already following this business model.
“Today, we have that privilege (pre-owned buses business)…We have not started working on the plan as yet…we are studying it right now,” Akash Passey, Senior Vice-President and President (Business), Region International, Volvo Bus Corporation, told BusinessLine recently.
He said this is a global business that Volvo does and requires proper infrastructure. The company already does for select customers right now, but not as a full fledged or separate business like car makers do, he said.
One of the advantages of starting this business would be that the company holds more than 80 per cent market share in the ‘premium long distance’ segment, Passey said, adding that “most of the companies do not do this business because their buses do not last more than seven-eight years.”
“We have world over buses running for more than 19-20 years and, in India too, some of the buses have run more than three million kilometres and still running, which is a rare case,” he said.
Since the first bus coming out of its factory at Hosakote, Bengaluru, in 2001, the company has more than 4,000 buses running on the Indian roads today. It manufactures 600-700 buses every year.
One of the advantages of successful business of Volvo in premium buses in India is lot of participation through public private partnerships (PPP) since its inception here. The company has been exporting too, over the last five years.
“We have heard about car makers making India a hub for their global markets, but not a bus maker,” Passey said.
Volvo Buses India also exports to South Africa, Bangladesh and Sri Lanka and is now eyeing the European markets.
On competition in future especially with companies like Mercedes-Benz and Scania also bringing their premium/ luxury buses to India, he said more the competitors, better would be the industry.
“It will be also well with the time like smart cities projects by the Government, wherein we can also participate in the PPP projects as a people mover,” Passey added.
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