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Music OK please
Rituparna Chatterjee
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April 26, 2006

Plastic garlands, idols, Bollywood posters and a blaring music system. These accessories are a part of most trucks and buses in India. Blaupunkt, the automobile entertainment giant, saw this opportunity.

At the Auto Expo this year, Blaupunkt launched its range of coach systems in the Indian market. Only, this song's not quite in tune: the coach systems, like entertainment for trucks and buses, and navigation and fleet management devices, come with huge price tags - Rs 30,000 to Rs 300,000.

That's a luxury that commercial vehicles plying on dusty Indian roads have done without. Music systems that are usually fitted in these vehicles are 10 times cheaper than a Blaupunkt system - the grey market music systems cost anywhere between Rs 700 and Rs 2,000.

Naturally, grey market dealers of audio equipment feel Blaupunkt has no chance. "Sony is the most sought-after brand, because most customers have heard of the brand," says Vikas Verma, a Delhi-based dealer of music systems. "Most customers can't even pronounce Blaupunkt," he continues.

But Blaupunkt offers a different argument. Buses need 24-volt electronic equipment; but most Indian buses still use the 12-volt electronic equipment, which is more suitable for cars. Even the video systems that are fitted in the "video coach" buses are those meant for living rooms.

"Blaupunkt has products specifically made for the coach segment," contends Ajay Sahney, deputy general manager, sales car multimedia, Blaupunkt. For instance, consumer electronics that are fitted on vehicles need inverters.

Also, the conventional systems cannot withstand the shocks and vibrations that are an integral part of riding on Indian roads. Blaupunkt executives claim that their products are apt for buses.

To justify the significantly higher price, Blaupunkt is also offering insurance against theft, fire and accidents to its customers. To emphasise the company's commitment, Sahney recalls last year's floods in Mumbai, when the company replaced car audio systems that were damaged in the floods.

There are customers who have bought into this sales pitch. Blaupunkt has already supplied 900 audio systems, each with price tags of Rs 25,000-30,000, to the Karnataka State Road Transport Corporation.

The company is also looking at tapping commercial vehicle manufacturers like Tata Motors [Get Quote] and Ashok Leyland [Get Quote]. This strategy paid off for the company in the car segment. In the mid-1990s, Blaupunkt tied-up with Mercedes Benz and General Motors.

At present, the company has tie-ups with Ford, Tata Motors, Mahindra and Mahindra, Hyundai and GM for supplying audio equipment to cars. But for the commercial vehicles segment, Blaupunkt is completely surpassing the retail trade, simply because it does not make sense.

"For car stereos, we reach customers through retailers. But for coach systems, we tap fleet operators, coach builders and original equipment manufacturers directly," says Sahney.

"Until recently buses were the cheapest option, with no frills. But now the younger generation wants state-of-the-art entertainment on buses," adds a Delhi-based expert.

A bus operator from Mumbai says that customers may eventually agree to pay a little more, if they get superior entertainment during their ride. With the increasing traffic on routes like Bangalore-Mysore, Mumbai-Pune and Delhi-Agra, because of the new - generation Volvo buses providing a comfortable cruise, there could be more takers.

Blaupunkt coach systems expect a modest turnover of about Rs 3 crore (Rs 30 million) by the end of next year and a 10 per cent share of the Rs 30 crore (Rs 300 million) industry in 2007-08.

Industry experts say that Blaupunkt could also look at how Volvo buses became popular in India. When Volvo launched towards the end of 2001, the Rs 50-lakh (5 million) price tag was unheard of - a Volvo was twice the price of existing Ashok Leyland and Tata buses.

Volvo decided to lease its buses to select operators in the country for a yearly fee. Soon operators got returns and could command higher ticket rates than the existing buses plying on the same route.

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