Volvo Buses switches focus to chassis production

Volvo Buses has reported that it is to focus its European business on development and production of bus chassis units. This will mean that the OEM will stop production and assembly of bus bodies, leaving the process to dedicated body manufacturers.

Volvo Buses introduced the B13R chassis in 2022 (Photo: Volvo Buses)

The change will mean that the bus OEM will close its bodybuilding factory in Wroclaw, Poland. Activities at site will be wound up by Q1 2024.

Volvo Buses has signed a letter of intent covering divestment of its premises in Poland to Vargas Holding. A restructuring provision of SEK 1.3 billion (approx. $123 million) will ‘negatively impact operating income in the first quarter of 2023’.

“Our business in Europe has been loss-making for years. With this business model, that we already today apply successfully in many markets, we will improve profitability and secure our long-term competitiveness,” said Anna Westerberg, president of Volvo Buses.

Orders already placed for complete buses and coaches in Europe will be delivered from the Wroclaw plant. Volvo Buses will continue to give full service and support to the existing fleet. The OEM will still offer a full range of buses and coaches, in partnership with selected external body builders.

Vargas Holding will take over the plant as of early 2024. The move will impact about 1500 workers. The letter of intent indicates that the company will offer employment to some of the current staff.

“Although Vargas Holding will operate in a different industry to ours, a key factor for them is the possibility to employ the experienced staff working in our organization in Wroclaw needed for their establishment and future expansion,” said Westerberg. She added that Volvo Buses will work with Vargas Holding to support local employees.