BUSES' MARKET COMMENT * INDIA - City bus: In demand, out of supply
Bhopal,India -AP/The Central Chronicle, by Sunita Narain -26 Oct 2008: -- In 2006, the Delhi government issued its first global tender for 525 new buses. It wanted modern, low-floor buses that were comfortable for the passengers and affordable for the Delhi Transport Corporation (DTC). It did not want buses common in India. Tata Motors bagged the contract. In May 2006, it cut a deal with Marcopolo SA, a Brazilian company, which makes buses with the monochoque body (integrated into the bus)... Tata's Lucknow plant, which produces heavy commercial vehicles, was to be the temporary facility, as the company built another facility at Dharwad, which was cleared in September 2007. It was to invest Rs 350 crore in two phases. The unit is likely to start rolling out 100-odd buses per month by early 2009... In 2007, Delhi asked for another 125 buses, including 25 air-conditioned ones. It settled for a base price of Rs 31.56 lakh for its non-ac bus and Rs 51.56 lakh for the ac version. This order fetched Tata a sum of Rs 318.26 crore. Furthermore, the city agreed to pay for the maintenance of the bus, signing a long-term agreement with the company on a yearly charge, almost doubling its total value. Till the DTC order, Tata had not received any booking for these low-floor buses... Tata received the order in April 2007 and the first bus was to be delivered in October 2007. But no bus came; Tata was unprepared to produce them. The following month, it was to deliver 20 buses, but it did only 10. The company then caught up: by October 1, 2008, some two years after the order, 543 buses had reached DTC depots. The remaining 82 buses would be delivered by the end of October 2008, Sehgal said... The problems have only begun for the Delhi government. In February 2008, it floated another tender for 2,500 low-floor buses, having figured out it had a winner in the form of the attractive, comfortable buses. Of these, 1,000 are for air-conditioned variants-to get non-bus users aboard... Only two companies bidded, with Tata's bid the lowest. The rules allow the lowest bidder and the second lowest one to share the order in the proportion of 65:35. The second lowest in this case was-no guesses here-Ashok Leyland... The first 50 of this would be delivered by March 2009, with the remaining coming over another 11 months, said sources in Tata. Though it can supply only 100 low- floor buses now, the company promises to double this. Leyland, which currently holds the cards in India's bus market, said it is considering the offer, and that it can make 100 such buses each month... But Delhi government said it needs another 3,000 buses for DTC by 2010, and also wants to replace the blueline fleet. This means another 4,000 buses, also by 2010. The market is ready. But bus makers seem shy... Till now, the bus market has been a duopoly. Tata and Eicher Motors share the light commercial vehicle segment. In the medium and heavy segment, Ashok Leyland leads with 45 per cent market share, with Tata following closely at 44 per cent. The market is abuzz with talk of new entrants and joint ventures. Volvo has tied up with Eicher, Mahindra and Mahindra is gearing up for the market and some Chinese companies are waiting in the bays... The market is growing, defying the slowdown in the auto sector. In 2006-07, the industry sold some 30,000 buses. In 2007-08, the market had grown to 40,000. In cities crowded with private vehicles, buses can get a much bigger piece of the transport pie. But automakers, who stand behind their cars and push their wares, do little to promote the vehicle that could drive millions in the country. The bus is the poor person's vehicle and nobody seems to want any truck with it... The city bus wants to change, it wants to keep step with the times. Till now, buses in India have been trucks, literally. Taking the chassis designed for heavy-duty trucks, bus builders-largely in the small and unorganised sector-assemble a body on top. The city bus is inimical to comfort; it certainly has no glamour. The Swedish automaker Volvo broke the mould. It set up a plant near Bangalore and sold comfortable buses with air suspension...
Labels: bus markets
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