Volvo and SM Kannappa Auto association for UD Brand of buses
Swedish auto majors, Volvo, have entered into a contract with Bangalore based SM Kannappa to launch a new range of buses for India and other emerging markets. This new alliance will allow Volvo to target a bigger share of the bus market.
Volvo and SM Kannappa Automobiles with together form a new company called Prakash Bus Corporation which will manufacture UD brand of buses. This new facility is situated near Kolar, around 70 kms from Bangalore. Volvo will have 15% equity in the joint venture while land will be owned by SM Kannappa. Volvo will supply bus chassis and will transfer technology to SM Kannappa while the latter will take over the supply chain for manufacture of these buses.
The company will take on a total staff of 350 to 400 employees and target an annual production of 500 units. Investments to the tune of INR 50 crores are being planned by the end of this year by which time the first lot of buses will hit the roads of Bangalore. This production is slated to increase to 2500 buses in due course with added investment of INR 70 – 100 crores.
The plant in Bangalore will also serve as an export hub from where the company will export UD Brand of buses to the Middle East and South African countries. Volvo acquired the UD Brand from the Japanese company Nissan Diesel in 2007. This new range of buses is expected to be popular across the country and among state owned corporations with Volvo targeting 56 Tier II cities in India. At present there are over 12,000 Volvo buses plying in 13 Indian cities.