The bus-building industry in India is set to see its fortunes rise, after a period of lacklustre, and even negative, growth in the past decade. In the first 11 months of 2015-16, the domestic bus segment (medium and light) has registered an about 15 per cent rise compared to almost flat growth in FY15.
The improvement has been driven by fresh orders by state transport undertakings, improvement in viability of private players (following a correction in diesel prices) and pre-buying ahead of BS-IV norms mandate. The bus market in India has been a fragmented industry.The introduction of the new Bus Body Code last year is a trigger for growth and is now expected to fuel strong demand for fully-built or factory-built buses, resulting in a shift of buyer preference to Original Equipment Manufacturers. Ashok Leyland is the leader in the bus market (medium and heavy segment), with 45 per cent share, followed by Tata Motors (34 per cent). Others include VE Commercial Vehicle, SML Isuzu and Mahindra & Mahindra, while Volvo has been operating in the premium segment. The latest entrants in India are Daimler and Scania.
Volvo, now a strong player in both intra-city and inter-city travel, has sold close to 6,000 buses in India so far.
Icra’s Group Vice President – Corporate Ratings, Subrata Ray said that the competition in the bus segment will increase as foreign players such as Scania, in addition to Volvo, have entered the city-bus segment in addition to the intercity luxury coach segment.Daimler bets on its feature-packed BharatBenz buses to set itself apart from competition. “We will target the modern and semi-premium segments. BharatBenz school bus comes with individual seat belts and a stop-switch for children to alert the driver to stop the bus. It also has a sports-kit carrier to carry equipment safely,” said Markus Villinger, managing director, Daimler Buses India.
Scania, a global brand in transport solutions, is keen to bring its green flavour to the Indian bus market. The company sees a brighter opportunity to run buses running on alternative fuel. Scania has been plying such buses in Europe for the past three decades. The premium bus brand is looking at an aggressive growth in the inter-city bus segment.
Domestic players Domestic majors have also upped the ante against growing competition. Acquisition of UK bus-maker Optare has given Ashok Leyland access to international designs. Its latest range includes Hybus, a non-plugin hybrid bus, and Sunshine, a school bus.
Tata Motors has come out with a unique concept — Bus Zone, an exclusive bus dealership, in a bid to give its customers due focus, comfort and attention.
It has more than 5,000 buses operating under JNNURM 1 (Jawaharlal Nehru National Urban Renewal Mission), with an additional 3,400-unit order in its kitty recently. The company hopes to bag orders for 2,000 more alternative fuel buses, according to a spokesperson. It has developed buses with hybrid fuel technologies, for the intra-city segment, which have been tested and are ready for commercialisation. The company recently bagged an order for 25 units of its Starbus Diesel Electric Hybrid buses from the Mumbai Metropolitan Region Development Authority.
With overall recovery and new orders placed by State Transport Undertakings (STUs, under JNNURM), the bus market is expected to grow at 10-12 per cent during the next fiscal. About 25 per cent of the fleet in STUs is over-aged and is due for replacement.
