Mercedes to launch city buses by mid-2011

Mercedes Benz India aims to have a capacity of 700 buses by mid-2011 as part of a plan to take on Volvo Buses India which is the current leader in the luxury bus market. This comments were made by Srinivas Chilukuri, General Manager, Bus Sales & Marketing, Mercedes-Benz India who was speaking after the ground-laying ceremony of bus body-building facility being built at Chakan, near Pune.

The infrastructure of the plant has been set up to address future expansion needs, underscoring the long-term growth plans of the company in India, a Merc press release has stated. This new assembly line will cater to the production requirements of the city buses to start with and production is expected to kick off around the second half of 2011. The new facility is being built with investment from MCV, the company’s partner for city buses. At present, the company’s partner for inter-city buses is Jalandhar-based Sutlej Motors. Egypt-based MCV is Daimler partner for bus body building and will have an India subsidiary for the purpose.

The Chakan plant, when commissioned will manufacture both city buses as well as the already available 2-axle and 3-axle inter-city luxury coaches. The company has raised its investment in its Chakan plant from Rs 250 crore to Rs 300 crore as a result of this decision. The market for high-end city buses is lucrative. It is estimated at approximately 500 units per annum and expected to grow by 20 percent each year. The city buses that will roll from the new Chakan plant next year will have automtic transmission so that it will give driver better coinfort levels in the stop/start urban traffic. Moreoevr, these bsues will be sold to city agencies. The luxury buses made in cooporatuon with Sutlej are manual. They will also be diesel buses for now as the company will only roll out CNG-powered bsues at a later stage.

Mercedes-Benz India sees a potential in this niche market and as such plans to offer with solutions that have been successfully operated in similar operating conditions in other parts of the world. The company is at present conducting product clinics and fine tune the buses to the specific needs of India’s city bus operators. It had already imported a low floor and a semi-low floor city bus for the product clinic.

Mercedes has sold 88 luxury buses since 2008 when it was first introduced. Of that, 64 have been sold in 2010 so far comprising 31 two-axle buses and 33 multi-axle ones. So far the local content in the buses is limited to tyres, wheel rims and batteryies. But as volumes go up, the company will consider increasing local content. This will also enable them to offer a better value proposition to potential buyers.