Håkan Agnevall, president, Volvo Buses and Akash Passey, chairman, Volvo Buses India, talk about the role of India in the Swedish manufacturer's global growth game-plan.
28 Aug 2015 | 3255 Views | By Autocar Professional Bureau
Volvo Buses has chosen its Indian subsidiary to import buses into Europe. This makes Volvo Buses India the first bus manufacturer to export to Europe. Håkan Agnevall, president, Volvo Buses and Akash Passey, chairman, Volvo Buses India, talk about the role of India in the Swedish manufacturer's overall scheme of ...
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Volvo Buses has chosen its Indian subsidiary to import buses into Europe. This makes Volvo Buses India the first bus manufacturer to export to Europe. Håkan Agnevall, president, Volvo Buses and Akash Passey, chairman, Volvo Buses India, talk about the role of India in the Swedish manufacturer's overall scheme of things.
How will the domestic market benefit from this exposure to exports?
Håkan Agnevall: There are many benefits.
Akash Passey: There are regulatory norms here, most of which we exceed and we have always exceeded in the past 14 years of regulatory norms. But, for example, when we go for exports to Europe there are European continental regulations on different things, on how the supply should be, what kind of materials should be used, considering the environmental norms.
So when you do the whole mapping, it’s logical that comes in practically for our customers locally. One simple example is, in a bus around the world it’s common to have double-glaze glass. In India, it’s only single-glaze glass but in cities with heavy noise levels, there could be requirements of double-glaze glass for noise insulation. That is a natural benefit in terms of an extra feature for our customers.
You have multiple manufacturing bases (including China, Thailand) around the world. What made you choose the India base to import into Europe?
Håkan Agnevall: First of all, with our Asia Leverage strategy that we have in place since 2011, we have had this ambition to export from India. Now we are mature enough and have a production system with which we feel it’s feasible to use India as an export hub for Europe.
When we look at addressing these segments in the European market because Volvo has not been present and strong in there, I think we have the right competence in India. I would like to underline here that these are not just products which have been developed solely in India, these are global products with substantial engineering in Europe, and with substantial engineering in India and the project has been driven from India so to say. It’s a global design but it is manufactured in India.
We see that leveraging our Indian footprint brings us a very competitive solution. That is why India was the natural choice and, as I said, we have been preparing for these products for a couple of years.
In India, Volvo Buses is a fully owned company, unlike in where China we are in a joint venture. So here we have full control over the business and then I would say the long-term strategy for India. Being here for now 14 years, going through the ups and downs, we consider India as a home market.
I would also say if you see some of what our competition is doing now, lots of competitors are also making substantial investment and we encourage competition but I think the competition is also starting to acknowledge the importance of India.
Daimler’s BharatBenz has recently rolled out its buses, some of which will compete with yours.
Håkan Agnevall: I think competition is good. It will drive us not to be complacent, but continue to evolve and develop. Secondly, it’s good because it will further promote the whole concept of high-quality buses which we think is good from the overall Indian perspective.
Where does India rank in your global markets, in terms of volumes?
Akash Passey: It’s normally among the top 10.
Are you absolutely happy with the kind of supplier quality that you are getting in India?
In general yes, but as we said the programme started in 2011. It has taken five years and that is the preparation. Going through it has not been easy work.
There were some unfortunate incidents involving Volvo buses after which you took steps like re-engineering some parts. Have you taken these lessons to global levels also to pre-empt any such unforeseen experiences elsewhere in the world?
Håkan Agnevall: First of all, I would like to clarify that we are fully working with Indian authorities on some legal dealings.
Akash Passey: When something like this happens, it’s natural for Volvo as tradition – not only today but for the last 40 years – that there is a team locally as well as in case of a serious accident, a global team coming over immediately to look into the incident. A report is circulated along with follow-up if required. So it’s nothing to do with something only in India.
The fuel tank in a Volvo bus, for example, has been re-positioned. Is it something replicated, perhaps, elsewhere in the world?
Håkan Agnevall: I would say the options that we offer here, are offered to a certain extent in some markets but I think it’s important to point out that we took the Indian accidents extremely seriously. However, we haven’t redesigned the whole coach concept.
So these options that we have developed to cater to customer requirements. These options, are to a certain extent, also available in other markets.
Akash Passey: We are a global company and have global solutions of course in one market or the other. The industrial base in India, like wherever we have plants, have Volvo production system standards. It’s a natural process.
Does Volvo Buses also source from the Volvo-Eicher engine plant in Pithampur? How much of the Volvo bus is localised?
Akash Passey: Of course. I will not go into details but yes our localisation is increasing over the years and the body is more or less fully localised.
Are you planning to run some pilot projects with hybrid buses in India?
Akash Passey: I think the government of India has started to support electro-mobility in a good way and we are certainly in a dialogue with them and we are participating. We see some opportunities for the future.
Then, of course, there are other manufacturers who have taken some other routes. We are quite sure that some of those routes are not sustainable and some of those technologies have been tried out different parts of the world and have not been found to be sustainable. They have more or less gone out for rest of the world and it is logical that it will have probably have the same conclusion here after some time.
This interview was published in Autocar Professional's August 15 print edition