Volvo to re-enter Pakistan

Published: February 21, 2016
SHARES
Email
PHOTO: REUTERS

PHOTO: REUTERS

LAHORE: 

The transport network and its industry seem to be ‘in-thing’ at the moment, with the latest development being the decision of Europe’s leading bus manufacturing company Volvo to re-enter the Pakistani market.

The company had a brief relationship with the Pakistani government in the 1980s, but the project did not have a long-lasting impact, shutting down as the country paid less attention to its road networks.

However, after decades, Pakistan is exploring a new-found love for the transport sector and this has led Volvo Pakistan Limited to seriously consider catering to a growing market.

Daewoo to build two new terminals in Lahore

Volvo Pakistan Limited Chief Executive Officer Waqar Asghar said the success of the project – that will see the company provide luxury buses for road transportation – is dependent on consumer feedback, based on which the company would decide its future expansion plan.

The company will provide 50 units per annum, as it is targeting the organised inter-city bus operators who can afford the induction of Volvo buses in their existing fleet.

“We are sure that the comfort a Volvo bus provides to travellers will force operators to induct these buses,” Asghar told The Express Tribune.

“The decision to introduce Volvo bus in Pakistan is based on some important factors; the growing road-transportation network and the consumer power to spend on luxury travel.

“Another important factor is the on-going construction of motorways, especially the Lahore-Karachi Motorway. These roads are linking major cities together, hence, increasing demand for quality bus services,” he said. “The growing economic prospect of Pakistan is definitely a reason why the company has introduced this product.”

VPL is a subsidiary of Panasian Group – a supplier of Volvo-trucks, construction equipments and Sunwin buses along with some other products in the Pakistani market.

Connectivity: 200 buses to link 14 areas to metro bus

In the 1980s, the Swedish government gifted 660 Volvo buses in order to upgrade the urban transport sector of Pakistan. The Panasian group played an important role in the grant and provided consultancy, infrastructure, processes and route planning. The Punjab Road Transport Corporation was formed to execute the project.

The Panasian group managed to transfer technology to Pakistan; some of the buses were imported while the local body manufacturers were engaged in developing bodies of remaining units.

But like most endeavours, the project started facing mismanagement issues. The service ended in the 1990s and all buses were gradually disposed-off in a warehouse situated at Multan Road.

Since the resumption of operations, Volvo has successfully managed to supply 134 Metro buses for Lahore and Rawalpindi-Islamabad metro projects and is in the process to supply another 35 for Multan.

Currently, Daewoo Express is the only company that has ordered 10 Volvo buses for its fleet. Though Daewoo is considered a ‘luxury bus service’, its fleet mainly consists of buses imported from Korea. Asghar said the company is looking to tap the existing potential.

“Once demand touches 300 buses per annum, we will consider investing in the establishment of an assembly line for Volvo buses in Pakistan.”

Public transport: ‘Halt construction, start debate on Orange Line’

Pakistan currently imports 1,200 buses a year to meet domestic demand, a low figure since the country’s public transport system leaves much to be desired. Brazil, for example, with almost the same population as Pakistan, meets a demand of 30,000 buses per annum.

“In India, Volvo has a manufacturing base with a capacity of manufacturing 1,500 buses per annum. It is manufacturing 10 Volvo bus products, and has recently engaged in exporting 100 Volvo buses per annum to the European market, besides exporting to Bangladesh, South Africa and Sri Lanka,” he said.

“On the other hand, in Pakistan, the first Volvo B11R has just been introduced and even that is being imported from Europe, which makes it around 35% costlier than the imported model of Daewoo in Pakistan.

“Currently, the automotive sector is in the negative list of Pakistan-India trade and we cannot import Volvo from India,” said the VPL Country Manager (bus division) Uzair Shahid. “We have convinced our parent company to start its bus division based on the growing demand of European cars by a certain segment of the society which will lead the momentum,” he added.

“We are in close contact with existing transporters as well as with banks and different financial institutes for financing arrangements.”

Published in The Express Tribune, February 21st, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (27)

  • Char Latan
    Feb 21, 2016 - 7:14AM

    50 units a year – that’s like one a week with a 2 week annual vacation. Recommend

  • Ahmed Wani
    Feb 21, 2016 - 11:21AM

    Daewoo is Indian,Volvo is European….What is pakistani ..i guess lahore motorway is chinese built…Recommend

  • Feb 21, 2016 - 12:25PM

    We need intercity bus services. Recommend

  • Feb 21, 2016 - 1:07PM

    @kamran Ahmad Kami: you are 101 percent CORRECT. Bit will it be allowed by the politicians and transport mafia??? SalamsRecommend

  • Amir
    Feb 21, 2016 - 1:27PM

    Volvo has manufacturing unit in India for almost entire South east Asia. So Pakistan will be getting made in India Volvo buses :)Recommend

  • Maxx
    Feb 21, 2016 - 1:28PM

    @Ahmed Wani: Daewoo was brought up by GM united states, getting most of it shares after going bankrupt. Only some commercial vehicle division shares was brought up by TATA motors. Recommend

  • XY
    Feb 21, 2016 - 1:51PM

    @Ahmed Wani

    Daewoo is Korean. Time to come out of the box you live in Recommend

  • Ahad
    Feb 21, 2016 - 6:51PM

    No surprise they will only have buses on the line. This decison also shows the magnitude of power manifested in the car market makers.Recommend

  • Rahul
    Feb 21, 2016 - 7:08PM

    @XY:
    It started as Korean but now Tata motors have bought its commercial vehicles wing i.e. buses and trucks. So every Daewoo truck or bus you see on your roads is a wholly owned subsidiary of Tata motors.Recommend

  • hellboy
    Feb 21, 2016 - 8:31PM

    @XY: Daewoo commercial vehicle business bought by TATA motors some years ago.Its bus manufacturing unit is in India and in other countries.Recommend

  • Fact Check
    Feb 21, 2016 - 8:35PM

    @XY:
    @Maxx:

    @Ahmed Wani is partly, if not fully right.

    Daewoo’s commercial vehicle division was bought by Tata of India while GM took over its passenger car division and a Chinese company took over its bus division. Tata Daewoo Korea’s trucks are sold in Korea and in other parts of the world (except a few countries, notably India) with the brand name “Daewoo”. The brand belongs equally to all 3 of them in their respective segments. 9 years later, out of the three acquisitions, only Tata Daewoo is making a profit and revenues have jumped many times.

    By the way, Mahindra and Mahindra, another Indian automaker bought Ssang Yong of Korea after it went into bankruptcy a second time after it was acquired by a Chinese company.Recommend

  • Woz ahmed
    Feb 21, 2016 - 9:56PM

    Great news,as Zak from Nevada would say every great major manufacture wants a part of the Pakistani dream.j

    We may pay 30% more than buying from India, but our passengers can afford it.Recommend

  • Haji Atiya
    Feb 21, 2016 - 10:40PM

    It makes sense to have more Volvos in Pakistan, they’re already semi-bullet and bomb proof.Recommend

  • CounterTerrorist
    Feb 21, 2016 - 11:39PM

    @XY
    Time to update your knowledge Mr.XYRecommend

  • Sam
    Feb 22, 2016 - 12:23AM

    @Amir,

    But Pakistan is NOT in South East Asia, Pakistanis in South Asia.Recommend

  • Feb 22, 2016 - 1:54AM

    @Ahmed Wani Thats what OutletPakistan is trying but lets seeRecommend

  • Jamal
    Feb 22, 2016 - 2:17AM

    Vulva comin to Pakistan. Now, that’s somethingRecommend

  • An Indian
    Feb 22, 2016 - 2:17AM

    @XY:
    Google is your friend, Buddy. You should come out of your box. Daewoo (both Commercial and Passenger vehicle divisions) was acquired by Tata’s in 2004 for $102 million. It’s an Indian company now — Tata Daewoo.Recommend

  • nabeel
    Feb 22, 2016 - 3:00AM

    @Amir:
    no as the article said that pakistan-india transport trade is in negative so they wont import volvo made in india. “Currently, the automotive sector is in the negative list of Pakistan-India trade and we cannot import Volvo from India,” said the VPL Country Manager (bus division) Uzair Shahid.Recommend

  • Faisal
    Feb 22, 2016 - 12:50PM

    @Ahmed Wani, who told you Daewoo is Indian, Get your facts straight and have some search before you post, Daewoo is Korean.Recommend

  • Javed Jamal
    Feb 22, 2016 - 3:22PM

    Volvo is purchased by Chinese company recently… So Volvo is no more European. Recommend

  • Javed Jamal
    Feb 22, 2016 - 3:44PM

    there is no more Daewoo in world.
    “Daewoo or the Daewoo Group was a major South Korean chaebol. It was founded on 22 March 1967 as Daewoo Industrial and was dismantled by the Korean government in 1999”Recommend

  • Salim Khan
    Feb 22, 2016 - 4:15PM

    Volvo buses are manufactured in India. If Volvo comes to Pakistan it will sell the Indian buses. This is indirectly giving market access to India, without even giving MFN status. Wah! Nawaz,,wah!!Recommend

  • nasser
    Feb 22, 2016 - 8:32PM

    @Ahmed Wani:
    Dqewoo is Korean and not Indian. Get a bit wiser before making comments. And also how does India comes into an issue purely Pakistani. Bro if you want to be a super power behave like one instead of being obsessed with Pakistan.Recommend

  • Fact Check
    Feb 22, 2016 - 9:41PM

    @Javed Jamal: Volvo is purchased by Chinese company recently… So Volvo is no more European.

    Only Volvo cars, not buses or trucks.Recommend

  • cbing
    Feb 22, 2016 - 11:50PM

    @Javed Jamal

    A simple google search will do more good. Volvo CARS is bought by Chinese Geeley. Volvo trucks and buses remain European company. Volvo cars will also be always European, like Jaguar Landrover is.Recommend

  • Daud
    Jun 11, 2016 - 12:40AM

    Volvo should introduce its only Chasis as well so it could adress NON AC transport sector as well and Pakistan made AC buses.

    Most importantly Volvo should invest in old spare parts in local market Recommend

More in Business