New Delhi, June 10 (IANS) Global auto major Mercedes-Benz Thursday said it will set up a dedicated assembly line to produce high-end city (low floor) buses.

'In India, our 2- and 3-axle luxury coaches have been received very well. We would now like to expand into the city buses segment,' said Wilfried Aulbur, managing director of Mercedes-Benz India.

The assembly line will meet manufacturing needs of city buses as well as the already available 2-axle and 3-axle luxury coaches.

According to the company, the market for high-end city buses is lucrative. It is estimated at approximately 500 units per annum and expected to grow by 20 percent each year.

Currently, the market leader is the Swedish Volvo.