Swedish vehicle-maker Volvo Group has chosen India as its first market to introduce UD buses, a range developed specially for growth markets.

The manufacturing of UD (ultimate dependability) buses will start later this year in Bangalore, Akash Passey, Senior Vice-President of Volvo Group’s bus operations in Asia, told reporters on Wednesday.

Volvo Buses has entered into a joint venture with a local company, SM Kanappa, part of the Prakash Roadlines, to set up a plant for body-building. Volvo has a 15 per cent stake in the company. The total investment in the joint venture is about ₹125 crore.

Passey said these buses will be positioned in the upper-end of the value segment, but below the premium category.

He said the total market in this segment is expected to rise to 10,000 units from about 1,000 units at present. Volvo expects to pick up a share of about 25 per cent in this segment. “We see most of the volumes coming from this segment in another five years,” he said. Passey added 2013 was a tough year for Volvo Buses’ operations in India. Sales were down 23 per cent to 460 units compared with the previous year. The company has sold a total of 5,000 buses in the Indian market since it began operations in 2001.

Globally, Volvo Buses posted a loss because of a weak market, according to Volvo Buses President Hakan Agnevall.

“We expect the Indian market to start growing again after elections.” The company has sold a total of 5,000 buses in the Indian market since it began operations in 2001.

He said mishaps involving Volvo buses towards the end of last year had no impact on sales so far. Volvo Buses’ internal investigation team had concluded that there were no design flaws.

However, the company has decided to offer an emergency exit in the rear of its buses following a recommendation from the Karnataka Government.

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