Friday 23 January 2015

Indian Bus Industry - An Overview Part 1.

Bus industry is one of the vital integral segments of Indian automobile industry. It is a common widespread public transport in India. The industry comprises of buses that are categorized into school buses, mini buses, tourist buses, deluxe buses, commuter buses and others depending on the use. Owing to the development of infrastructure and roads, connecting to remote places has become easier due to which more and more people are availing bus services. This has greatly contributed to the growth of bus industry. Proliferation of internet, rising income, online bus ticket search and booking, growth in low cost carriers, have further added to the growth of travel market in India

The first motor bus route started on July 15, 1926, and ran between Afghan Church and Crawford Market, Mumbai. The bus fare for the same journey was four annas, i.e 25 paise. Indian bus travel industry is a 15000 crores industry and growing annually at 25 %, with over 3,00,000 tickets sold daily, roughly making it an inventory worth $3bn.Indian bus market which was previously and at times still considered a very unorganized, fragmented and unregulated. However, now the market is slowing moving towards some uniformity and consolidation. Today, India has 5,000 private bus operators with a fleet size ranging from 5 to 500 buses.Indian bus market has revolutionized in the last 10-12 years,lot of changes have taken place in the functioning of the sector which is adding more convenience and comfort to the passengers. Indian bus market is divided into 4 broad categories

·         Mass market with bus ranging from Rs.22 lakh to 30 lakh. This market has the largest market share of over 60 %.  Rs. 22 lakh is for the non AC bus while an AC bus costs around Rs.30 lakh.

·         Value market with cost of the bus ranging from Rs.40 lakh to Rs.60 lakhs. Buses like ISUZU,Swaraj Mazda, MAN etc. occupy this segment and this segment has only 2 % market share.

·         Premium bus market is the market where bus range from Rs.80 lakh to a 1.2 crores. Volvo, Mercedes, Scania are the key players in this segment. This segment has a market share of around 25 % and it is this segment which is bringing about the changes in the industry.

·         Super premium bus market with cost of the bus from Rs.1.5 crores upwards. CLUB ONE, Olivia, SVLL connect form part of this segment and it occupies a niche market share of 1 %. The target group for this segment is the affluent class and people with deep pockets. Customers who prefer to travel in luxury.

The coming years will bring in consolidation, Lots of improvement and growth. The seeds of the future plants are being sown and good times lie ahead.