Scania to open India assembly unit in June, focus on premium segment Scania, now controlled by Germany’s has indicated that its Indian assembly unit would commence production by June. The Swedish truck and bus maker intends to build its brand in the Indian premium segment through a strong focus on driver-friendly strategy in addition to TCO (total cost of ownership), while gradually ramping up the local content in its products. “We plan to inaugurate greenfield assembly facility near Bangalore on June 18. The facility will have a capacity to produce 2,000 trucks and 1,000 buses per year. We will have adequate dealer network when the factory starts rolling out products. Our policy is definitely not to put any product on the market place without very strong service backup,” Anders Grundstromer, managing director of Scania Commercial Vehicle India told Financial Chronicle. “The bus bodies of Scania will be 100 per cent localised and some chassis components for the buses have high local content up to 80 per cent. The local content in the trucks will be about 20 per cent and that will be increased gradually,” he added. While the company has already launched inter-city buses and trucks for the Indian market, it will be rolling out a slew of off-road, mining, on-road haulage trucks and heavy equipment transport tractor trailers besides a new range of premium buses once the Rs 250 crore new factory commences operations. Scania trucks will be launched with drivelines that are semiautomatic in a bid to assure more safety and comfort to drivers. “It will be such a waste not to raise the standards of Indian drivers as they are vital part for the profitability of the transportation companies. Fuel consumption of a vehicle between a good and bad driver could be as much as 10 per cent. Thus, 9-10 per cent of your 50 per cent of cost (fuel) is huge sum over a five-year period,” stated Grundstromer. In overall cost of a truck operation in western markets, fuel and driver account for 35 per cent each, while in India, fuel accounts for about 50 per cent of the cost and driver’s cost is very low at single digit. Scania trucks will incorporate minor changes in the mining trucks only, while other trucks will offer the same comfort as in western markets. “The premium truck market thrives on certain product niches. Typical applications are over burden removal in mining, over dimensional cargo, etc. While this segment will grow going forward and may gain market share, we don’t see the segment grow beyond 2 per cent of the total market in 2020. Challenges in the segment come from its niche character. The overall ban on mining (coal and iron ore) has led to declining sales in the segment. Also the move towards MDO (mine developer cum operator) by Coal India and their requirement of dumpers may have a significant impact on the segment. Last but not least, local players and global players with local products will try to enter the segment with upgraded products,” Wilfried Aulbur, managing partner, Roland Berger Strategy Consultants told Financial Chronicle. The Indian premium truck market, in the price range of over Rs 70 lakh and is estimated at sub-1,000 units, has been weathering a tough market due to economic slowdown and challenges in the mining segment, a major consumption category for premium trucks. Presently Volvo is the leading brand in the Indian premium truck market, while other players include Mercedes Benz’s Actros and Scania.
Posted on: Thu, 13 Jun 2013 05:42:12 +0000
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