After creating a niche in the inter-city bus mart, luxury bus maker Volvo is now targeting the city-bus segment, bagging the first order in Bangalore.

"We have bagged the first order for city buses in Bangalore and will be expanding the segment further by targeting newer cities," Volvo Buses South Asia head and vice-president Akash Passey told PTI.

Passey said the company was talking to city-bus service operators in Mumbai, Hyderabad, Chandigarh and Ahmedabad for the buses.

"We will be delivering the first lot of 25 buses in Bangalore before March," he said adding that despite high costs, the company was hopeful that increased safety and efficiency levels will help the vehicles penetrate the market.

The company is already a preferred player on the inter-city route, having sold as many as 1,000 buses since 2001.

In fact, in 2005, it sold 400 units and Volvo buses are not only being used by inter-city operators in Delhi, Himachal Pradesh, Haryana, Rajasthan and Punjab but also on the India-Pakistan bus route.

"We hope that this year bus sales will be up by 20-25 per cent, which would include about 50-100 units in the city bus segment," Passey said.

The company hopes that with the concept catching up with time, the city bus sales would rise to about 300 units in the next 2-3 years.

The only hitch it faces is the hefty initial costs the operators have to dish out for buying the buses, which can be almost double to that asked by domestic players like Tatas and Ashok Leyland [Get Quote].