Volvo Bus' 2nd brand in India next year

Last Updated: Thu, Feb 21, 2013 05:31 hrs

Sweden's Volvo Bus Corporation (VBC) today announced a dual-brand strategy for emerging markets, including India. It plans to enter a new bus segment with a different brand for these markets. The new brand is to be first launched in India in 2014, a top company official said.

"We have established a strong brand presence in the premium bus segment globally and are now working on creating a value segment with a new brand name. We will first roll out this brand in India, as we are growing strongly in this market," said Hakan Karlsson, executive vice-president, business areas, AB Volvo.

The research and development wing of VBC in India is developing a new vehicle, to be launched in India and other emerging markets in 2014, he said. The bus will be priced in the range of Rs 40-60 lakh.

"Traditionally, buses in India are priced in the range of Rs 15-20 lakh and the premium range upwards of Rs 70 lakh. We are trying to create a new segment between these two price brackets. This could be called a mid-price segment or a value segment and will bring in large volumes for us," said Akash Passey, senior VP, business region international, VBC.

With this launch next year, Volvo aims to increase overall market share in India and also capture 25 per cent of value segment buses. Passey says the value segment bus market is likely to touch 10,000 units annually in the next few years.

In 2012, Volvo achieved 10 per cent growth in bus sales, to a little over 700, compared to the previous year. "This was against the bus industry growth of three per cent. The sales growth was sluggish due to unfavourable economic conditions. We hope to do better in 2013, depending on the budget announcements," said Passey.

During 2012, Volvo doubled its manufacturing capacity to 1,800 buses at its Hoskote factory, near this city. It might further raise this to 2,500 units next year, said Karlsson.

Adding that the company will start exporting its made-in-India buses to other countries in Asia, Latin America and Mexico this year. Currently, it is exportings buses only to those in South Asia.

Due to sluggish growth in sales last year, the target to achieve $1 billion (Rs 5,400 crore) revenue in India by 2015 could be delayed, he said, adding it might take a year or two more than the earlier schedule. "There will be a slight delay as the business environment is not supporting our growth targets," he said.

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