Volvo buses set for slow drive on bumpy road

March 10th, 2009 - 7:20 pm ICT by IANS  

Bangalore, March 10 (IANS) Volvo Buses India Ltd, which posted a robust 115 percent growth in 2008, is aiming a slower growth this calendar year due to the economic slowdown and fund crunch in the luxury bus segment, a top official said here Tuesday.
“These are tough times for all players in the passenger transport sector. With interest rates still higher on funding purchase of luxury buses and institutional finance scarce, private bus operators are not in a position to invest in our hi-tech products for the time being,” Sweden-based Volvo Bus Corp’s Indian subsidiary managing director Akash Passey told reporters here.

The company is expecting a modest 20 percent growth in 2009 even as the overall bus segment is set to witness a decline of 25 percent.

“We sold about 440 buses in 2008 as against 200 in 2007, registering year-on-year growth of 115 percent, he said.

“Though we are unlikely to see such a growth pace, we will perform better than the industry segment, as we have already secured a repeat order for 150 buses for inter-city operations from major state road transport corporations in the first two months of this year,” Passey added.

With a backlog of 50 buses from 2008, the company has an order book of 200 buses till date. With over 20 percent growth projected, it is hoping to sell about 550 buses this year.

The company has invested Rs.1 billion (Rs.100 crore) in 2008 to set up a full-fledged bus body and chassis plant at Hoskote, about 30 km from here, with an installed capacity of 1,000 buses per annum.

“To meet current orders and plan for emerging need for modern city buses, we are increasing our production capacity by 25 percent this year,” Passey said.

The company also plans to offer consultancy services to private and state-run corporations on the need to provide modern bus transport system.

“The culture of bus transport is changing in India. Long-term impact on a city, mobility and life cycle costs are key criteria in city bus planning. We will partner with civic authorities in building transport infrastructure through our consultancy services,” Passey added.

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