[treadmark]

Rumour - Scania wrapping up bus plant and operations in India?
Saw this article on Times Of India

" It appears Swedish bus maker Scania Commercial Vehicles India Private Ltd is wrapping up its ethanol and premium bus manufacturing facility, existing operations, and proposed projects in India. The company owned by the Volkswagen Group has reportedly closed down its buses manufacturing plant at Narsapur in Karnataka, stopped operations at Goa, and dropped the proposed project at Thane"

If this is true, it is indeed a sad news, Scania improved and created healthy competition for Volvo and forced Volvo to bring in iShift.
I'm wondering how will KSRTC, SRS and Kallada etc.. will maintain their existing fleets now?
Cheers!

[TusharK]

Over the last few months, Scania has been reportedly winding down its operations in India. A recent media report suggests that the Swedish CV maker could be shutting down its ethanol and premium bus manufacturing facility at Narsapur in Karnataka and may have cancelled its proposed project in Thane. The company has also stopped its operations in Goa and has relieved majority of its workforce.



In Nagpur, Scania had signed a memorandum of understanding (MoU) to setup a biogas plant and launch 25 biogas-powered buses in the city. Out of the two proposed biogas plants, one is currently in operation and the other is in its commissioning phase. Further, Scania was supposed to operate 55 ethanol buses in the city out of which only 25 are currently on the roads, while the rest have been parked on the outskirts of the city.

In Goa, Scania had launched two ethanol and one biogas-powered bus, neither of which have been operational for more than 2 months. As per the original plan, the company was supposed to launch 60 ethanol and 70 biogas-powered buses in the state.

The company had also secured a contract to operate 50 eco-friendly buses in Thane. It has been reported that Scania has pulled out of this project as well.

Source: TOI

Link to Team-BHP News

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[peugeot96]

Reports on CNBC are indicating chassis production will continue. Scania signed a deal with MG group for bus bodies a while back so I suspect the present chassis will continue in some form or the other in the market.

[volkman10]

Link

Scania's statement is the premium segment of buses in India is too small and not yet matured to justify keeping its plants running.

The premium segment in the bus business in India is very small and the numbers have not been sufficient to enable profitability for Scania, the order book is slow. We continue to have ready stock on the yard. Due to which, it has become unviable to continue bus building operations at our Narasapura premises,

However, the bus and truck chassis production continues to stay in-house as before.

the company doesn't have any outstanding orders. However, the company have ready stock available for any market requirement as they move from in-house to outsource bus body production

[rakesh_r]

Just about when Scania was eating in Volvo's share. Sad to hear the condition of those 600 odd employees. What about the spares and service support? Will that be hampered?

[Hemicuda]

Just to put an end to the confusion Scania is not shutting its shop in India so there will not be any impact on existing operators and their fleets which are currently running. The Bus Chassis building and Truck operations will continue to produce products.
Yes it is shutting down the Bus body building operations which is a sad part for the employees and families who are affected.
The main reason here is mainly that the market in India for new buses is slowly moving towards Sleeper coaches rather than Semi Sleeper(Reclining Seats 2x2) configuration.
The Sleeper coach configuration is not a company designed option for Scania and even for Volvo for that matter and is managed by external body builders. The companies build only semi sleeper configuration and with the low volumes projection and idle capacity I think there would have been a decision to move out of it altogether.
The Bio-Fuel vehicles projects losing steam in a matter of concern but even today in Government matters we never really know who to blame

[treadmark]

Originally Posted by Hemicuda

Just to put an end to the confusion Scania is not shutting its shop in India

Yes, looks like many are confused about this!

The Sleeper coach configuration is not a company designed option for Scania and even for Volvo for that matter and is managed by external body builders.

Agreed the trend is moving towards sleeper bus configuration from semi sleeper but the demand for bus body building still remains there (in fact increasing) but in a different form. For the sake of surveillance what will it take for these OEM's to start building sleeper coaches, shouldn't be a big deal in my opinion.
Scania is at par with competition unlike how Mercedes Benz was when they came IN and fuel economy is their strong selling point which is the primary factor when it comes to fleet owners / sales.

The Bio-Fuel vehicles projects losing steam in a matter of concern but even today in Government matters we never really know who to blame

Very true, who should be blamed and it is not one agency here!

[GTO]

Originally Posted by Hemicuda

The main reason here is mainly that the market in India for new buses is slowly moving towards Sleeper coaches rather than Semi Sleeper(Reclining Seats 2x2) configuration.

How is Volvo thriving? Am guessing Volvo targets the same 'premium segments' that Scania was? Is it Volvo's first-mover advantage?

Or that Volvo has become the default choice that bus customers ask for (like taxi customers ask for 'Innova')?

[Zappo]

My thought hre is a little different. Like all VAG group automobiles Scania too suffers from similar maladies. Competent vehicles that still fail to compete in the market place. GTO asked a very pertinent question. How does Volvo manage to survive if the market is so miniscule? The thing here is that Volvo has by now exploited its first-mover advantage to the hilt in this segment. They have far better localization of assemblies, wider service networks across the country, lower cost of ownership etc. Its chicken and egg situation. Unless the others plough in money upfront and go for a big push (=big investments in brand building) they can't just hope that they will get enough volumes. Someone investing more than a Crore in a bus will not want to easily take a chance with a rare brand when a far more acceptable, available and equally premium brand also costs more or less the same upfront.

[sandeepmohan]

For a moment, it sounded like they were shutting shop in India. Glad they are not.

Surprised by their statement on Premium segment being too small. The way I see it, it can only get bigger and more lucrative if you are in the business of manufacturing high quality buses.

Yes; Volvo definitely has the upper hand (They were here first) and they are pretty much the Maruti Suzuki of premium buses. Will be difficult to dethrone them. That does not mean Scania should just give up on the market. There is plenty of room for business in this segment and it should not be single brand driven.

I believe Jimmy Jose is still a FM. He is the all Kerala sales and service support for Scania. Hope he pitches in on this.

Ask anyone down south about their preferred means of inter city travel and a premium bus comes ahead of trains. What are these buses? It is either a Volvo or a Scania.

[VellVector]

Originally Posted by GTO

How is Volvo thriving? Am guessing Volvo targets the same 'premium segments' that Scania was? Is it Volvo's first-mover advantage?

It was a bit of first mover advantage. Scania busses are a significant bit more expensive than Volvo's - because of Volvo's localization and Scania having higher price point to begin with since it considers itself a super-premium brand.

Fleet operators have not been able to get higher fares on these buses over their Volvo counterparts, making it impossible to justify a higher capital expense.

The company's bigger problem is that their trucks which is their mainstay product and comprise the bigger part of their global sales have not been widely accepted yet in India.

[GTO]

Originally Posted by sandeepmohan

Surprised by their statement on Premium segment being too small. The way I see it, it can only get bigger and more lucrative if you are in the business of manufacturing high quality buses.

Agreed. One, the strong Indian economy. Two, this press release I just got 5 days back:

VE Commercial Vehicles Ltd. (A Volvo Group and Eicher Motors joint venture) recorded sales of 5977 units in May 2018 as compared to 4573 units in May 2017, recording a growth of 30.7%. This includes 5874 units of Eicher brand and 103 units of Volvo brand.

Following are the key highlights for May 2018:

· Eicher branded trucks & buses have recorded sales of 5874 units in May 2018 (YTD 9813 units) as compared to 4539 units in May 2017 (LYTD 7616 units), representing a growth of 29.4%.

· In the domestic CV market, Eicher branded trucks & buses have recorded sales of 5268 units May 2018 (YTD 8657 units) as compared to 3953 units in May 2017 (LYTD 6531 units) representing a growth of 33.3%.

· On the Exports front, Eicher branded trucks & buses have recorded sales of 606 units in May 2018 (YTD 1156 units) as compared to 586 units in May 2017 (LYTD 1085 units), representing a growth of 3.4%.

· Volvo Trucks has recorded sales of 103 units in May 2018 (YTD 123 units) as compared to 34 units in May 2017 (LYTD 46 units), representing a growth of over 202%.

Originally Posted by VellVector

It was a bit of first mover advantage. Scania busses are a significant bit more expensive than Volvo's - because of Volvo's localization and Scania having higher price point to begin with since it considers itself a super-premium brand.

Wow, that sounds like a suicidal strategy. Again, I bring up the Innova example = can any new, unknown manufacturer launch an MPV for 25 lakhs and expect it to sell? No. The Innova will murder it.

[the_skyliner]

Scania was banking big time on Govt. orders for buses (inter-city) including smart city ones. Looks like the orders are put on hold and that means a couple of years delay with no guarantee after the 2019 elections.

I heard they had many females workers at the Indian plants to promote women empowerment. Sad to learn about the layoffs.

[R4m4kr15hn4n]

Am not really well-versed in the field of commercial vehicles, so pardon me for asking a noob question. The CNBC news article said that Scania is shutting down bus body production, but will continue the bus and truck chassis production. Does that mean we may get a different company branded bus/truck with the chassis made by Scania? Or did I completely misunderstood the article? Can somebody please clarify?