Bangalore: Budget airlines and certain issues over body parts has hurt the sales of Volvo buses in India and private operators slashed orders for the hi-tech buses last year.

Compared with 2005, sales fell 31 per cent to 203 units in 2006, though the company expects to come out of the trough soon.

Sales during the first six months of the current fiscal have been normal but the company expects them to increase once the new plant starts operations later this year.

The company expects to sell about 300 bus units during the calendar year.

Volvo, which launched its buses in India in 2001, has entered into a joint venture with Jaico Automobiles to manufacture buses near its truck manufacturing plant at Hoskote, near Bangalore.

Volvo holds 70-per cent stake in the joint venture. The total cost of investment is around $12 million. It will manufacture 1,000 buses during the first 12 months, of which 500 will be exported.