Volvo Group introduces UD buses, partners SMK Auto for local production

Swedish commercial vehicle giant Volvo Group has announced the launch of buses in the ‘value’ segment under the ‘UD Buses’ brand for the Indian market.

The company is launching the UD bus range, which will be manufactured in India, to tap market potential available in the upper medium category bus segment in the country. Initially, the products will be launched in the city bus segment, primarily semi-low floor buses, in the fourth quarter of this year. The company will enter the coach segment in 2015.

Håkan Agnevall, president, Volvo Bus Corporation, said the new range of value buses will be rolled out in India in the fourth quarter of 2014. “It will offer passengers a modern travel experience and fulfill the specific needs of the customers in the value segment. With a multi-brand approach, we look forward to playing an even more important role in the Indian bus market,” Agnevall added.

The UD buses will be manufactured in India through its partnership with SMK Auto, a part of Prakash Road Lines Group. The Volvo Group will have a 15 percent stake in the joint venture, said Akash Passey, senior vice-president, Volvo Group’s bus operations, responsible for international markets including Asia.

According to Passey, SMK is building a manufacturing facility near Kolar in Karnataka to manufacture the buses and the production line will be ready by the third quarter of this year. He added that the overall project cost will be Rs 125 crore but refused to disclose other financial details in the venture. The localisation level of the buses will initially be around 40-45 percent, growing to 80 percent in a few years.

Passey said the market size for value segment or upper medium segment will in the range of 10,000 buses in the next six years and Volvo will have a sizeable share in the segment. Currently the segment has a market size of 2,000 buses per annum. The UB Buses plant will have an initial production capacity of 500 units per annum, later expandable up to 2,500 units depending on market demand.

According to Passey, “In India we foresee that UD Buses will take the lead in developing the value segment.  There is a large potential middle segment in India, of which the value segment targeted has a high growth potential.”

The Volvo Group acquired the Japan-based UD bus brand in 2007.  While the Group has been  restructuring the brand and commencing production  in India, there are plans to export these buses to other emerging markets from India.

The bus market is expected to see considerable action and earlier this month, Daimler India Commercial Vehicles announced a Rs 425 crore investment in a brand-new bus manufacturing plant at Oragadam to roll out BharatBenz and Mercedes-Benz buses.

Photograph (L-R): Akash Passey, senior VP, Volvo Group’s bus operation responsible for the Asian markets, and Håkan Agnevall, president of Volvo Group’s bus operations, unveil the UD Bus brand.