Interview by: Ashish Bhatia

Q: How has the market reacted to new products since the mega launch at Busworld India 2018?

A: Busworld India 2018 was an iconic event for us. We launched three products. Technically it were two. There was the luxury reclining seat and sleeper coach variants of the Glider-Z. Since then we have produced 100 coaches. Both the Glider versions have garnered good feedback since the launch. We have also delivered a few Dreamz sleeper coaches built on the Mercedes-Benz Super High Deck (SHD) 2441 multi-axle chassis. We have also added a new coach unit at Belgaum. In due time, it will hit the right capacity utilisation levels.

Q: Which products are experiencing the most traction?

A: The traction ratio is 60:40 with the sleeper coaches amounting to 60 per cent. Demand for sleeper coaches is coming from markets like Gujarat and Kerala. We initially tied up with Kochi based M/s Autobahn Trucking. The floods resulted in the market shrinking. We expect a turnaround sooner than later.

Q: What is the strategy behind Starz?

A: The strategy is about opportunities that are coming our way. It is therefore that we have built a new coach, and are looking at increasing the plant utilisation levels. The outcome will be a diversified product range. There is a good market pull for the Dreamz. We have associated with Volvo Buses India for another state-of-the-art luxury coach. With the Starz, our aim was to build a bus that would be perceived as elegant and exclusive. The Starz thus has very good lines running through the exterior. The headlamps are compact with DRLs, and support a clean front fascia. We have used chrome to good effect. It provides a premium effect too. In terms of styling, the approach for Starz was different than the Dreamz. It gave us an opportunity to bring two exclusive sleeper coaches to the market.

 

Q: How does the type approved 15-metre premium luxury sleeper coach give you an edge over others?

A: It does. Our roll-over testing passed through in the very first instance. It cleared the simulations test in the first go itself. We are the first company to have a fully-built and certified multi-axle sleeper coach in the country.

 

Q: With OEMs offering fully-built buses, how do specialist coachbuilders like you sustain?

A: The Indian market is huge. In terms of volumes, we still have a large potential for growth. The need is to attain higher volumes. Though OEMs are our customers, they are changing with the times. Some where an understanding is coming that it is difficult to cater to many applications in an owned plant. As coachbuilders there is a certain kind of customisation we could offer. It could be achieved at our cost-levels in comparison to what the OEMs can achieve. There is a place for all of us to coexist thus. As a company, we are always on the lookout for opportunities to partner and add value to both OEMs and our end customers.

 

Q: How are you growing across segments?

A: On the OEM side we have been manufacturing school buses and staff buses. Typically, regulations vary across the state of Maharashtra and Tamilnadu. With new AIS standards in each of these states, there are further changes that we need to comply with. On top of that, OEMs are gearing up for BSVI transition. All this translates to a change in product lines, body-design and on the chassis side. In terms of applications, we have been focusing on school, staff, and STUs for the three years. We have also been focusing on different set of applications and like mofussil, mini-buses for intra-city applications and inter-city coaches. On the retail side, we are focusing on inter-city coach segment, and school and staff bus segments that need better air-conditioning systems. A higher feature set requiring us to cater to the entire gamut. Our recent focus areas also include special application CVs. For instance, we’ve been getting orders for Mahindra’s Jeeto SCV. A recent order was to build 2000 garbage tippers in a three-month time period. Similarly, we have partnered with Ashok Leyland and Tata Motors. We are gradually looking at tipper trucks and cargo bodies. Wherever fabrication is involved, we see an opportunity to grow. The idea is to diversify.

 

Q: How do you see the volumes panning out?

A: The volumes are dependent on many factors. In the case of school buses, the volumes are depleting for certain clients while they increasing for certain clients. There hasn’t been much of a growth in the segment. We are hopeful of the coming year leading to better volumes. In the case of STUs, there are a whole lot of tenders we are participating in. It is one segment that is looking up for us. The coaches launched from August 2018 onwards are a new addition to our product portfolio. To our business volumes, and in effect to our turnover. The Tarmac segment is an exception. We have been forced to go slow owing to certain important projects that took precedence over the segment. Eventually, with testing, validation and homologation in place, the Tarmac coaches will be ready too.

 

Q: How have the capabilities of the company changed overtime?

A: We have undergone many changes owing to the various disruptions taking place around us. On all sorts of applications, customer expectations have changed. This has resulted in higher expectations at the OE levels too. Changes at our level include sourcing skilled resources with domain expertise across functional areas. Each customer brings something new to the table in terms of learning. On the coach side for instance, we have come to understand that every coach requires to undergo on-road testing before actual delivery. Premium luxury coaches are subjected to PDI testing for instance. We are consciously building in-house capabilities to be able to cater to such requirements going forward. It applies to testing, validation and homologation. On the manufacturing front, for instance, manufacturing a coach is way different from manufacturing a school bus. The approach and psychosis to the two on a shop floor are entirely different. Take the STUs for instance, the lead time from enquiry to the actual conversion is hard to predict. At times it’s too short and at times it’s too long. Our attempt therefore is to be more agile. The need of the hour is to be versatile as well. There is reverse engineering involved. Product benchmarking is critical. In certain areas therein we are relatively new.

 

Q: How are your manufacturing compatibilities supporting your growth strategy?

A: We have consolidated certain product lines to begin with. Between the three plants, at Zaheerabad, we are consolidating the low-cost economy segment of buses that we are building for our OE customers. This is besides the special application CVs that we are looking at. In Belgaum, Unit II is going to focus on the economy coach segment and the STU business. From Unit I, we will focus on the premium coach segment. That includes the BharatBenz nine-tonne 1623 bus, Mercedes-Benz SHD 2441 coach, Starz coach built on the Volvo B11R chassis, a premium coach on the Ashok Leyland chassis or on the Tata Motors chassis. We continue to work towards a 10-15 per cent CAGR target until the new products are established in the market. The newer products need more time and energy. They also need the right support initially until the entire ecosystem is geared up.

 

Q: Are you looking to partner STUs pan India with the Build Operate Transfer model?

A: To answer the second part first, it is not necessary. The STUs, however, have been demanding a shift from their traditional designs to attain a fresher look. Both MSRTC and TSRTC went down that road as against the designs being specified by the STUs which we would work upon. We look forward to participating in some crucial and big requirements from the STUs. It’s a tender game at the end of the day and we’ll have to see how it works. There are huge orders from Tamilnadu State Road Transport Corporation where we intend to participate. Between Tamilnadu and Maharashtra itself, we are staring at a huge order pipeline. Likewise, there are other markets like Karnataka where we are hopeful.

 

Q: How are the plans for electrification shaping up?

A: It’s in a very nascent stage. Yes, in terms of our tarmac coach there is a very strong desire to produce an electric variant. As an industry, on the whole, it is again going to be very need dependent. With talks of switching over to electric completely by 2030, we are yet to visualise our role and extent. But for our tarmac, given that airports are the first touchpoint of a country, we hope to gain good exposure and learnings from the engineering perspective given that it is a niche segment.

 

Q: Did the Union Budget 2019 impact business directly or indirectly?

A: Not really. We were hoping for some announcements for the mass transportation segment and the passenger in general which could have had direct implications on the business. But it wasn’t meant to be. Issues faced by fleet operators in terms of ticket pricing and tax structures is another area that the government needs to look at as it is a challenge in itself to sustain the business.

 

Q: Which are the growth areas and challenge areas for the near future?

A: The challenge area is to be able to cater to a wider target audience including OEs, retail, retail coach and the STUs. We are very aware that juggling all of them with a different product line each is a big task. We will have to strike a balance between managing resources, keeping a check on costs and the business performance we expect out of each segment apart from balancing our allied businesses of electronics and composites where we are diversifying too. We intend to also look at seating systems market where we are waiting for the right time to enter. We have our own captive requirements to meet, and what better to get back into the family business in a more premium way, and with a larger product portfolio.

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