Volvo Buses is planning to close its manufacturing plant in Saffle, Sweden at the end of June 2013 and focus producing vehicles in its main plant in Wroclaw Poland.
The company said that its decision to focus bus production in Poland comes due to low demand and tough competition in Europe.
The shut down will affect 330 employees and about 60 consultants in Saffle.
Volvo Bus president Hakan Karlsson said that the demand for new buses in Europe has dropped steadily over the past few years, paralleled by considerable pressure on prices, particularly in the Nordic markets.
"By concentrating the production of complete buses in one single plant, we can reduce our costs and thus reverse our negative profitability trend," Karlsson said.
Volvo expects that moving production into Poland will negatively affect its operating profit during the fourth quarter of 2012 by $15m.
During the second quarter of 2012, the company sold only 2,498 buses, compared to 3,127 in the same period last year.
