Volvo Eicher Commercial Vehicles (VECV) on Monday announced its first bus body manufacturing plant in the country as the bus market gears up for strong growth. The new plant will help it create in-house dependency for building bus bodies as the firm was earlier sourcing bus bodies from various local bus body manufacturers.

The plant will be set up near Indore in Madhya Pradesh in second half of 2013 with investment of Rs 125 crore with capacity to make 10,000 bus bodies per annum, the company said in a statement. The upcoming facility will also enable VECV, an equal partnership between Sweden’s Volvo and New Delhi-based Eicher, to cater to export markets.

“The plant will be another step towards our vision of becoming a leading commercial vehicle player in India and other emerging markets. It will be set up under our overriding vision of driving modernisation in Indian commercial transportation,” said Bertil Thoren, board member, VECV.

The multi-model bus manufacturing plant would produce bodies for light, medium and heavy buses including the rear engine semi low floor buses for school, city and inter-city bus segments. The plant would be highly mechanised with robotic processes for bus painting.

According to Siddhartha Lal, MD, VECV, the Indian bus market is set to cross 100,000 units by 2015. At present, the market size stands at about 70,000 units. “Demand for more contemporary, comfortable buses is on the rise. VECV is planning new range of buses for serving the customer needs both in the expanding domestic and exports markets,” Lal added.

Major bus players such as Tata Motors, Ashok Leyland and Volvo are manufacturing bus bodies in-house at present. Earlier all manufacturers used to source bus bodies from local manufacturers that were engaged only in bus body manufacturing.

VECV bus sales grew 35 per cent at 6,496 units last year compared with 4,819 buses sold by the company in 2010. The company has increased its market share in bus segment to 10 per cent in 2011 from seven per cent in previous year after gaining entry in to state transport undertaking (STU) segment.