Volvo Buses India Ltd is diversifying into consultancy services business as the global economic slowdown starts affecting its Indian operations as well.

Volvo, which grew at a scorching 115 per cent in 2008, expects growth to slacken this year as the financial market crisis dents the market for luxury vehicles.

Volvo Buses India, the local arm of the Swedish auto major, sold 440 buses in the country in the calendar year 2008 against 200 sold in the previous year, its managing director Akash Passey said.

''Though we are unlikely to see such a growth pace, we will perform better than the industry segment, as we have already secured a repeat order for 150 buses for inter-city operations from major state road transport corporations in the first two months of this year,'' Passey said.

With a backlog of 50 buses from 2008, the company has an order book of 200 buses till date and expects about 550 buses this year, he added.

The company has invested Rs100 crore in 2008 to set up a full-fledged bus body and chassis plant at Hoskote, near Bangalore, with an installed capacity of 1,000 buses per annum.

''These are tough times for all players in the passenger transport sector. With interest rates still higher on funding purchase of luxury buses and institutional finance scarce, private bus operators are not in a position to invest in our hi-tech products for the time being,'' Passey said.

Passey said Volvo expects the `soft services', including consultancy services, managing customers' fleet and any engagement other than the business of bus sales, to constitute 50 per cent of its revenues in five years.

Volvo Buses, he said, is looking for partnerships and collaborations with civic and transport authorities in decongesting traffic, improving efficiency of transport systems and take up projects to provide sustainable solutions customised for a city's transportation needs.