Volvo Buses has signed an agreement for 1,500 buses with bus operator Bashi Group in Shanghai.

The deal is valued at approximately 1.3 billion kronor (€124 million) and will be executed by subsidiary Sunwin Bus, a 50-50 joint venture between Volvo Buses and Shanghai Automotive Industry Co.

For Volvo, that sells about 10,000 buses a year, the Chinese order of 1,500 buses is doubtlessly a welcomed deal, especially considering the gloomy times. During the first quarter Volvo’s sale of buses fell some 20 percent and more than 70 persons have been layed-off at the plants in Borås and Uddevalla due to the low demand.

The buses will be delivered up to the opening of the World Expo in Shanghai in May next year as part of the city’s investments in modernizing and streamlining its public transport.

“An increase and modernization of the bus traffic is an important part of the venture,” said Lars Blom, Head of Volvo Buses’ operations in China. “It involves raising the standard of the bus fleet by purchasing more Volvo buses and a strong investment in environmentally friendly buses from our subsidiary Sunwin Bus”.

Of the framework agreement’s buses, about half will be Volvo buses, models Volvo B7RLE and Volvo B6R, and the remainder of the Sunwin brand.

Components for Volvo buses’ chassis are packed in Borås and sent off to the plant in Shanghai, where the chassis are mounted and the buses assembled. The same plant also manufactures the local Sunwin buses.