Forty of the buses will ply between the city centre and the new Bangalore international airport, which is due to open in May. The remaining vehicles, to be delivered by early 2009, will operate on various city routes.

Bangalore Metropolitan Transport Corporation, or BMTC, is already running 70 Volvo buses in the southern Indian city of six million people, which is adding cars at a rate of 1,000 a day and worsening the city’s chaotic traffic.

Volvo said its luxury city buses with comfortable seating and airconditioned interiors had enticed many Bangalore residents to park their cars and use public transport.

“Half of the passengers in the Volvo buses previously travelled by car or two-wheelers, but have now chosen to ride the bus instead,” it said in a statement, which gave no value for the order.

The buses will be built at Volvo’s new plant in Bangalore that opened at the end of January.

“BMTC’s decision after two years of testing to now make a larger investment is an important step in our company’s development,” said Akash Passey, managing director at Volvo Bus Body Technologies India.

Volvo has sold 1,600 city and inter-city buses since 2001 to state tourism agencies and public and private transporters in India, which it plans to turn into a low-cost export hub to tap rising Asian demand for public bus transport.

The company plans to build 450 buses this year at the Bangalore facility and increase production to 1,000 units by 2010, Chief Executive Håkan Karlsson said in January.

Volvo is trying to tap rising demand for luxury transport fuelled by accelerating economic growth and rising middle-class incomes in India.

Inadequate public transport is partly responsible for a car sales boom in the country where 1.4 million automobiles were sold last year.