Contemplating a new intercity coach service! Need your valuable suggestions

george_kj · 2nd January 2011, 12:41

Dear Friends,

I am a silent follower of team bhp .I need your help to make a decision on starting an intercity coach service in India....

To give you guys a brief idea on my thought process... As a kid I have been always fascinated towards buses as we used to run a transpiration service in Kerala...But we stopped it in mid 90's due to some family problems..Since then i always wanted to start a 'Bus Service'....

Fascinations aside..I have been seriously thinking of setting up some business in India and I feel there is a need for some kind of premium transportation service which is entertaining (comfortable, luxurious etc), reliable, fast and cheap. I have read through the various post in the commercial vehicle segment and noticed that in spite of the tough competition in this industry, there is room for growth if you offer a top notch and value for money service.

This is what i am looking at:

1. Route:

1. Hyderabad to Bangalore
2. Hyderabad to Kottayam ( Worried about higher cost rollups..more tax etc)

2. Most important factor- Buses:

1. I have been reading a lot of positive reviews for the Volvo’s monster B9R's.But have no idea on the maintenance etc.

2. Mercedes 3-axle.. I really think " Follow the star is a crowd puller." But have heard many complaints about the ride and quality not being up to the mark of Volvo. Need inputs. With my requirements mentioned below , wouldn’t Merc be a better option?

3. Isuzu?

I am working on the costs rite now. I will have a exact on the road cost by this week. If anyone has any idea, please feel free to post it.I know the approx numbers.

3. Number of Seats: 36 ( 2+1)
I think this is the basic requirement for a luxury segment for a comfortable long distance travel. Make customers happy with the more space.

4. My USP:
This is what I want to offer...But some might

.

1. To start with I want a individual entertainment set for all the seats...
2. Individual headphones
3. Free refreshments all time if needed...
4. Chemical toilets (Is this a good idea??)

Some other options which i want to explore are stuff like WiFi ..dish TV etc...I don't know if its possible...Your inputs are welcome.
I know there is already a service which provides all this but at a higher premium.

5. Cost per ticket: This is the killer. I need to figure out if i can keep it bellow Rs.1200?

I think people are willing to shell out a couple of hundred more if there is a provider out there who has good customer service, reliable, fast and cheap.

I know there are lot of team-bhp'ians who are very knowledgeable about this industry. Your inputs will be greatly appreciated.

George.

TKMCE · 2nd January 2011, 13:44

Here are a few points from being a fairly frequent user of long distance buses, mostly due to personal choice and not necessity - I work in the travel industry

but have a long continuing fascination with long distance bus travel.

HYD-BLR would be a far better route than HYD -Kottayam. I dont think there is enough traffic to sustain Hyderabad Kerala on a daily basis and you will have to pick up people enroute which is going to be difficult since in addition to Kesineni, Kallada has just announed the start of Ernakulam Hyderabad services. Plus there is way too much airline capacity in the HYD COK route and after Jan 15 when the sabarminala season ends there is every chance the air fares migh come crashing down. 1500 for a bus for a hopefully 20 hours journey and last day airfares likely to be at 2500-3000 with seats for the asking - you get the picture!!!

HYD-BLR - There is always demand on a fairly regular basis with a pronunced FRI/SUN peak for luxury bus travel.

If you are going for 2 + 1 , do look at charging a premium for the single seat config seats. After all you get the comforts of an aisle and a window in a single seat and many people will pay extra for that privacy - esp the high end segment. Surprisingly many operates who operate with 2 +1 config does not charge a premium for the single seat.

Food on board is not a great idea - littering and odour are the two main problems. Better would be to go for stops at good quality F and and outlets with clean rest rooms.

Individual entertainment should do well.

Most imprtant thing is punctuality and your crew on the buses who have a service mentality and can speak English and Hindi atleast .

My 25 paisa (which my bank assures me is still legal tender) worth!!!

Another sugguestion is offer 150-250 Rs shared taxi drop at your arrival point- many of your up market clients who you are targetting would only be glad to opt for it!!!

Ashley2 · 2nd January 2011, 13:59

Thats very nice to hear some one really thinking of starting a service with VFM rather than just making Money.
First of all my sincere wishes for you come up successfully in this business.
Since you have already experienced in this field it should not be a tough job for you.
Though I will share more of my experience with you later, right now I can say is MB is not in the league of Volvo. There is only a brand value and nothing else.
I cannot completely rule out the possibility of taking Volvo's but how are you going to manage the maintenance part of them. DO you have your mechanics, service station in between those locations, or any other plans. Before you settle down to choose the bus you buy I wish you finalise how should the maintenance part handled from your side apart from getting support from Authorised SS.

TheARUN · 2nd January 2011, 14:12

Congratulations Mate.

Another thread for me to stay glued to.

What you have thought of seems to be a winning idea. Have you considered the inter-state taxes? You have to pay taxes per seat in both states - AP and Kerala. With Telegana looming, you might be looking at 3 States!

BaCkSeAtDrIVeR · 2nd January 2011, 15:00

At the end of the day, all a passenger would want is prompt departure and assured arrival. Arrival on time is always a plus point. Operating long distances requires plenty of experience, resources (not just money), infrastructure, contacts, etc.

What experience do you have in this field? Pretty tough to sustain if you lack experience. You will require well experienced and sane drivers. (That is a relative statement - "sane" in the bus operators' terminology is still insale for most smaller vehicles).

Have you gone through the inter city bus travel review thread here?

For volvo and Mercs, look at annual depreciation + interest charges of above 30Lakh. Or in four digits per day. Another 2/3K per sear per three months in taxes. Your operating margins are rather thin. And I have not considered maintenance costs. This translates into more than 60% of ticket charges going into fixed costs. So keeping away more than that proportion of your revenues to meet deferred expenses which occur once in 2-3 days is a must. In other words, good financial management.

For routes operating overnight, you will need a pair for a given schedule. For Hyd - KL where the running time is 20+ hours per day, you will need 4/5 buses at least, with at least 4 drivers for each bus, and a crew changing point somewhere en route. Can you arrange the required infrastructure?

I would suggest a lower priced, but well powered Indian brans - and AFAIK, Tata and AL have rear engine normal chassis with 250HP or more. I am not sure of the Isuzus and other jhonney come lateleys.

julupani · 2nd January 2011, 16:30

Well, I am not exactly very experienced in the south Indian bus market, so wont comment about that at all.

From the point of view of the kind of equipment that you would want, looking at your idea, I would 1st of all like ask by what exactly you mean by individual entertainment for all, especially as you have already mentioned individual headphones separately. If you mean individual screens behind each seat, that is going to cost you a pretty massive amount in equipment, and also a good deal of electricity per trip. Though providing individual headphones for each seat wont be such a high cost in my opinion and can be easily achieved.

Also, to reduce costs and provide for a little bit easier maintainance, you could look at the upcoming 285hp Tata Hispano Globus. This bus wont be much down on power on the Volvo and maintaining a Tata will be a lot cheaper, not to mention the lakhs you save on buying the bus itself. Also on the front of the maintainance, I would like to say one thing. Instead of going for just fault repair, it is better if one takes up preventive maintainance. It would be better to spend some amount which will be more stable on regular maintainance, rather than spending on fault repair, which you never know is going to come up.

Chemical toilets is also a good idea, but I think if you are operating an overnight service, I think simply choosing a nice well maintained rest stop would be a much cheaper option. I think you can leave this one out.

george_kj · 3rd January 2011, 07:13

Thank you all for your valuable comments and suggestions. Really appreciate it..

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HYD-BLR would be a far better route than HYD -Kottayam. I dont think there is enough traffic to .... you get the picture!!!

HYD-BLR - There is always demand on a fairly regular basis with a pronunced FRI/SUN peak for luxury bus travel.

Thanks TKMCE. Yes you are right. More inclined towards short routes for now.

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If you are going for 2 + 1 , do look at charging a premium for the single seat does not charge a premium for the single seat.

Aren't taxes paid by the number of seats? And please correct me if i am wrong...36 seats would also have a better room in between two rows??

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Most imprtant thing is punctuality.. speak English and Hindi atleast .

Yes , I agree. One of the most talked about topics in the intercity reviews thread.

I have a question....I personally know a lot of hospitality management students who just sit idle or have no opportunities in there final years or just after school....Why can they take up jobs like these as interns or something similar....The only concern would be a good manager to mange these kind of jobs...Can i explore something like this???

Quote:

Thats very nice to hear some one really thinking of starting a service with VFM rather than just making Money.
First of all my sincere wishes for you come up successfully in this business.
Since... apart from getting support from Authorised SS.

Thanks Ashley. For a start up i guess its always best to service at authorised.

As julupani pointed out....I am a total supporter of Total Productive Maintainance. Ensure that the machine is in the best condition all the time..

But point noted..it will all depend on which type of machine i go with..I guess it would be much much easier to maintain a leyland or tata...

Yes Arun , i am looking at the tax rates...I guess it the only non variable component in the feasibility study ....Atleast for now...

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At the end of the day, all a passenger would want is prompt departure and assured arrival. Arrival on time is always a plus point. Operating long distances .... "sane" in the bus operators' terminology is still insale for most smaller vehicles).

Thanks backseatdriver...Yes true. I have not a expert in the service industry but i think i know some trades...

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Have you gone through the inter city bus travel review thread here?

Yes i have. I have compiled a list of grievances...i will publish them as i go along....

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For volvo and Mercs, look at annual depreciation .... with 250HP or more. I am not sure of the Isuzus and other jhonney come lateleys.

This is my biggest worry now. I will let all of you know my concerns..may be you guys can give me a better picture....

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Well, I am not exactly very experienced in the south Indian bus market, so wont comm.... such a high cost in my opinion and can be easily achieved.

Thanks julupani.Do you know how much they costs..per seat/per machine...Do the bus manufactures give us the option?? Do i have to custom make them..i dont find any indian seat manufacturer who has gives me the option of seats with built in tv screens...Do you know any chop shops?? I am only trying to get a feel for it and the costs associated with it..There got to be a way to do it...This is one of the most important USP for the business plan that i have...

I saw that the sleeper buses have DVD screens below each berths..But that is not an option for individual seats...

Advice..

Quote:

Also, to reduce costs and provide for a little bit easier maintainance, you could look at the upcoming 285hp Tata Hispano Globus. ... rather than spending on fault repair, which you never know is going to come up.

I will talk about this in much detail..Let me pull some data..

George.

julupani · 3rd January 2011, 07:35

Well, I dont think any seat manufacturer in India has the option of seat-back mounted screen.. But you could do one thing, though it will defeat the purpose you are looking for, is to have a small 10inch screen for a group of 2 to 4 seats.

Also one other thing is providing for individual screens of any point at all, if you cannot allow them to have a little bit of choice of entertainment as well.

An idea would be to talk to experienced in-car entertainment guys, who may be able to guide you as to what all you will need for your idea and how much it will cost.

george_kj · 3rd January 2011, 08:30

Note from the Team-BHP Support : Please avoid typing with excessive dots.........like................this.

Thanks

Yes..No point i giving an individual screen for 2-4 passengers....

I will touch base with in-car entertainment guys in Hyderabad...I know there are lot of Chinese manufacturers selling these seat back entertainment sets for coach seats which look pretty cool.have to study more on their options....but how to get them installed is a question to ask...

george_kj · 3rd January 2011, 09:56

If i look at the private transport segment right now..at-least between Hyderabad to Bangalore ...we have from a customer prospective

Non A/C Semi-sleeper / Seater -- Prices from 500-777
A/C Sleeper - - Prices from 770-1110
Premium/ Luxury --- Prices from 730-1200.( Sharma has a merc for
(Volvo and Merc)

There is a definite gap in the about segmentation...Where is the Semi-Luxury A/C semi sleeper?Where can we position the Tata or Isuzu?

Can a Tata Globus compete in the premium or luxury segment with the Volvo and the mercs.Are they as reliable as the imports? I have my doubts.

From the intercity bus travel reviews thread , i understand that ABT or some similar operators are using Isuzu and Tata buses and are doing pretty good.Can some one shed some light on these operators using these buses? What is their market strategy?

Will i be able to put a picture of a tata globus on any company broucher and say " Premium and reliable transportation service"? Can i sell that? Are the customers willing to buy is my question.

Please give me your thoughts...

All my questions might sound silly...If i am going to enter this market..i better have a very very strong selling point...or else i can get bet down by these big time operators and the tough competition....

carboy · 3rd January 2011, 10:30

I have traveled a lot in intercity Volvo buses.
For short distance travel like Bombay-Pune, the most important thing is time - everything thing else is secondary. Travel by car used to take me 2:20 minutes. If a bus could take me in 3 hours, I wouldn't travel by car - but the buses used to take 4 hours at least. This was mainly because of the time spent waiting to fill up the bus. before it leaves the origin city. #2 would be guaranteed bookings. Most bookings in Neeta Volvo etc are rather fluid - i.e you book a seat in a bus for 6:30 pm it means you get into the first bus which has seats & arrives after you reach the bus stop.

For longer distance travels (overnight) the main things in order of importance
- Comfort - you shouldn't wake up in the morning with every bone aching
- Good movie choices - the few hours before you fall asleep are bloody boring. And once I had the misfortune of the same movie running in 3 trips I took within 2 months.
- Punctuality in leaving the origin city would be great, but this isn't as important as in a short distance trip because a 1 hour wait (which always happens) isn't as significant in long trip as in a shorter trip
- Not hovering around in a middle city - for eg. in a Hyd-Bombay trip, sometimes the buses wait long in Pune to fill up seats of all people who have got down at Pune.

If these criteria are satisfied, then I wouldn't mind paying 25% extra in a short trip fare & 10-15% extra in a long trip fare.

binaiks · 3rd January 2011, 11:09

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