Professional Documents
Culture Documents
Bus Industry
The Indian bus market is amongst top 2 in the world. It is growing at CAGR of 10% and peaked to all
time high volume of 73,000 units in FY2016-17. The
LMD bus TIV exceeded HD buses in FY’12 and
similarly the market will continue to be dominated
by LMD buses.
The Indian bus business is observing growth
followed by the implementation of the bus body
code (AIS 052) along with favouring
macroeconomic factors such as urbanization,
infrastructural growth, remote plaves
connectivity and focus on smart-city
development.
However, the TIV of HD bues has reduced significantly since all-time high of 34,000 in FY’12. It is mainly
driven by less demand in STU segment and
retail segment. It is also encouraging to
know that LMD bus products are evolving
and upgrading both in terms of
length&breadth and getting closer to HD
products along with reducing HD bus TIV.
The TIV has shrunk by 34.7% in FY17~18
over FY 16 – 17 and has not shown signs of
recovery unlike LMD TIV. The TIV of 17,000
in FY’18 is very close to FY’02/ FY’03 level,
and it seems that it has gone back to the
level it was 15 – 16 years ago.
Current Situation
HD bus TIV limiting itself mostly to Intercity and Route Permit segment. The demand from School has
significantly dropped and has shifted to LMD. And the demand of Staff segment is showing a similar
trend. The reasons for de-growth of HD buses in FY 17 - 18 on various segments are as follows-
Staff Bus
Shift in purchase from HD buses to LMD buses due better operational economics and
maneuverability advantage
Other
Overall business sustainability
a. GST implementation: Resulting in higher body building cost, the impact is seen more in
case of intercity segment where body cost is high
b. Rising fuel prices
c. Implementation of bus body code – impacted the cost of body building.
Enactment of BS IV Norms
a. Pre buying of BS III vehicles over BS IV due to heavy discounts and risk of technology
change and related cost
Major takeaways
The HD bus TIV de-growth can be broadly accredited to the following:
STU demand was less against last year and will improve in FY’19 due state & union elections
Sluggish retail market for HD as it is mostly restricted to Intercity and RP. Others segments like
School and Staff are shifting to LMD buses
Delayed HD bus buying mainly due to challenged business viability on account of higher
procurement and operational cost which is led by increasing fuel prices
Future prospects
In short to medium term basis, HD bus market is expected to continue to comtribute in ~30% of the
overall bus TIV. A slight improvement is can
happen this year due to replacement of ageing
fleet in STUs.
In long term basis, the HD market is expected to
improve going forward with better road
connectivity, urbanization and improved business
viability. However the HD contribution to overall
bus TIV may remain in the range of 35%.
The HD bus preference will continue in intercity
and RP applications.
For intercity application, higher safety and
comfort will be the key drivers as average trip distance likely go up. This will drive higher capacity buses
like front engine multi axle coaches. While for Route Permit, basic HD bus with improved reliability and
performance will be the key requirement. Going forward with stricter regulatory requirements on safety
and comfort (e.g. bus code, sleeper code, stricter norms on NVH, braking, steering etc.) will drive OE
built buses.