Scania shuts down bus body manufacturing unit on low demand

Swedish commercial vehicle manufacturer Scania has announced the closure of its bus body building operations at Narasapura plant near Bengaluru citing lack of demand for premium buses.

"Due to lack of demand in the premium bus segment in India, Scania is restructuring its bus manufacturing business in India and is forced to close down its in-house production of bus bodies in the Narasapura premises," the company said. The company, however, said that it would continue to manufacture bus and truck chassis.

According to reports, the move will affect around 1,200 employees of the company.

Giving the rationale behind the move, the company said, "The premium segment in the bus business in India is very small and the numbers have not been sufficient to enable profitability for Scania."  

Scania had invested around Rs 3 billion to set up two plants at the Narasapura facility where it manufactures trucks and buses. 

The company said it has offered the severance package to all affected employees. "Scania will support its employees during this period of financial adversity and has offered severance scheme to all affected employees," it said.