Swedish bus major Volvo Group today announced the introduction of UD bus range developed specifically for growth markets including India. New buses under the UD brand will hit the roads sometime in October this year, a top company official said.
“We will introduce a new UD bus range specifically designed for growth markets. The segment targeted has high growth potential. UD buses have had a strong brand presence in Japan and South East Asia in the past. Now we renew and adapt the buses for India and other growth markets,” said Akash Passey, Senior Vice President, Volvo Group’s bus operations, responsible for the international markets including Asia.
He said UD brand buses will be positioned as value segment between the entry-level buses priced in the range of Rs 25-30 lakh and high-end premium buses priced upwards of Rs 80 lakh. The UD brand of buses will be priced towards the higher side of mid segment. Though the company has not announced the exact prices of these buses, they will be priced in the bracket of Rs 50 lakh to Rs 60 lakh.
The Japanese Kenzo Adachi created UD bus brand in 1939. Volvo Group acquired UD bus brand from its Japanese promoter in 2007 and discontinued the sales of buses in 2010. It however, continues to sell trucks under the same brand in various global markets.
The UD bus brand will expand Volvo Group’s customer base, improve competitiveness and capture growth opportunities in India and other growth markets. The bus range will include both city buses and coaches. Volvo Group will continue to sell premium buses under the Volvo brand, while UD buses will fill the gap in the mid-segment, he said.
Passey said the company has tied up with a local partner, SMK, the Prakash Roadlines Company for manufacturing UD brand of buses. Volvo Group will take 15% stake in the new joint venture, while SMK will hold the majority 85%. “Our partner is in the process of setting up a new manufacturing facility near Kolar with an initial capacity of 500 buses per annum. This will go up to 1,500 buses eventually. We will launch the first bus for commercial use sometime in the fourth quarter of this year,” he said.
To begin with, the company will launch city bus and introduce the inter-city coach in 2015.
“We will first launch these buses for Indian market and later take it to other export markets in South East Asia, West Asia among others. India will be the central location for manufacturing buses for both domestic and export markets,” said Hakan Agnevall, President, Volvo Group’s bus operations.
Passey added that both the joint venture partners together would invest Rs 125 crore for setting up the new plant near Bangalore. While, SMK will manufacture these buses, Volvo would supply exclusive bus chassis, technology and designs. Volvo will also take care of sales and distribution of these buses through a separate division under Volvo Buses.
He said Volvo Group expects the value segment or mid-segment bus market to touch a size of 10,000 buses by 2020 in India and Volvo aims to capture majority share of this market.