Tata Motors-Marcopolo JV to build buses

Tata Motors has formed a joint venture with Brazilian bus builder Marcopolo to assemble buses and coaches in India. Tata Motors would take a 51-per cent stake in the venture, while Marcopolo would hold the rest. The venture would see an initial investment of $13.3 million, according to the Marcopolo website.

The JV is expected to start commercial production within a year and would produce 7,000 units in the first year. The venture would produce standard buses, luxury buses, coaches and low-floor city buses of various capacities. Buses would be marketed domestically as well as Tata Motors' other major markets

Marcopolo is one of the leading global manufacturers of bus bodies. The company had net revenues of $800 million and produced nearly 16,500 buses last year in its nine manufacturing units in countries like Portugal, Argentina, Mexico, Poland and South Africa apart from its home market of Brazil.

The bus building industry in India is mainly in the hands of small-scale units and mid-sized regional players. Most of the buses are built on truck chassis which significantly compromises passenger comfort and safety.

Tata Motors had launched fully built buses and coaches in the domestic market last year. The demand for modern buses is expected to rise in future as the highway system improves.

Another significant driver for demand would be Bus Rapid Transit Systems (BRTS) being planned for some large cities. BRTS uses high capacity low-floor city buses running in dedicated corridors. The system can be set up at much lower cost than alternate mass transport systems like metro rail. Some cities in South America, like Curitiba in Brazil and Bogota in Colombia, have successfully implemented this system.