Tribune News Service

Bengaluru, July 14

Swedish transport giant Volvo will export luxury buses made in India to Europe and later to other global markets.

“We will be the first bus company to take advantage of lower manpower costs and neutral duty in India and export to the European market from India”, Volvo Buses Corporation president Hakan Agnevall said today.

Volvo entered India 15 years ago to tap the high-end truck segment, but also made inroads into the luxury bus segment as its local rivals Tata Motors and Ashok Leyland continued producing ordinary buses for cities and semi-luxury coaches for inter-city and inter-state routes.

“Besides lower manpower cost and minimal overheads, we will avail customs duty exemptions on import of engines, components and accessories required for making buses for exports at our factory here,” Volvo Buses vice-president Akash Passey said.

Volvo’s Indian subsidiary has invested Rs 400 crore in doubling its installed capacity at its plant near Bengaluru to 1,500 units per annum.

“As the country’s passenger transport market has been down over the past couple of years due to various factors, including recession, we could not fully utilise the production capacity as the demand or order was for 600-800 buses per annum”, Passey said.

Volvo India has been exporting luxury air-conditioned buses to South Asian countries such as Bangaldesh, Maldives and Sri Lanka since 2003 and to South Africa since 2011.

“It’s a milestone for us to export buses from India to developed markets in Europe even though we are a European company and has a major presence there with manufacturing plants in the continent,” Agnevall said.

The type of luxury buses to be exported will be Euro-6 complaint for mass rapid transportation in European cities.

“We will use India as export hub overtime for developed markets like Europe, leveraging our manufacturing presence in India supported by a strong vendor base”, Agnevall said.

By focusing on exports, the Indian subsidiary of Volvo will also be able to face the stagnant domestic market demands, which have been linear over the years due to economic slowdown and lower orders from state-run corporations and private operators.