With growing demand, Volvo Buses to raise capacity

Volvo Buses India Pvt Ltd (VBIPL) is looking at expanding capacity by 30-50 per cent to cater to growing demand in the domestic market.

Akash Passey, managing director, said: “We have witnessed around 30 per cent (annual) growth in the city bus segment over the last three years. The intercity segment, too, is picking up fast, with growth being about 15 per cent. To cater to the increase in requirement, we are looking at expanding capacity at our Bangalore facility.”

VBIPL manufactures 1,000 units per annum at this facility. The capacity enhancement programme would be put in place to meet additional demand post 2011. Passey declined to specify the investment being planned for the expansion. Talks are also on to export Volvo buses to West Asian and South African markets from the facility in India. “The cost of production is considerably lower in India. It makes sense for us to manufacture products here and export to other markets,” said Passey.

VBIPL, in fact, is looking at exporting 25-30 per cent of the products it manufactures in the country over the next five years. The company currently exports to Bangladesh and Sri Lanka.

It sold 535 units of city buses last year. The target for this year has been pegged at 550-600 units. The company would focus on pushing volumes of inter-city buses this year.

“We are concentrating on the intercity segment this year for distance coaches. The growth in volumes would be around 15 per cent. However, our revenues would shoot up by 30 per cent,” said Passey.