The Falkirk-based firm is to receive £7.3 million from Scottish Enterprise towards its £31m low-carbon vehicles programme.
Alexander Dennis (ADL) said the funds would create 101 jobs and secure 126 existing roles. The company is building hybrid and electric buses, and plans to double turnover by 2020 through new development.
First Minister Nicola Sturgeon said: “ADL is one of the world’s leading bus and coach builders, and a true Scottish success story. This new grant funding, the highest-ever research and development award by Scottish Enterprise, will create 101 new jobs and secure a further 126 jobs in ADL’s low carbon vehicles project.”
She added: “The project is integral to ADL’s growth and export strategy to capture more of the increasing global demand for environmentally-friendly buses. ADL’s continued commitment to invest in Scotland is testament to the skilled workforce here in Falkirk.
“We’ll continue to work with manufacturers like ADL to innovate and expand, and we’ll set out further measures to grow the Scottish economy later this week.”
ADL chief executive Colin Robertson said: “We look forward to local authorities and cities around the UK as well as abroad seizing the opportunity to introduce these next-generation vehicles, which bring massive benefits to passengers, city dwellers and the environment.
“This investment in new product development enables companies like our own to stay at the forefront of industry at home and overseas, and will help us achieve our strategic goal of a £1 billion turnover by 2020.”
A consortium led by Sir Angus Grossart, Stagecoach co-founder Sir Brian Souter and former Rangers owner Sir David Murray bought ADL in 2004 after its former parent, Transbus, went into administration. The company, which employs more than 2,300 people, commands about 43 per cent of the UK bus market.
Turnover at ADL powered ahead 20 per cent to £602m last year, with record overseas sales driven by a “buoyant” market in Hong Kong. It has also set up a chassis assembly plant in Toronto after winning a deal worth more than £260m to supply double-deckers to Metrolinx, the local transport authority.
Scottish Enterprise has invested £192m in companies’ R&D in the last year. Chief executive Lena Wilson said: “Scottish businesses, like Alexander Dennis, have been making great strides in R&D in recent years and more and more international investors are now choosing Scotland as their innovation location of choice, thanks to our great business environment, strong skills base, effective support network and academic excellence.
“As a result, Scotland has had a record year of innovation investment, with our businesses equipped to target more international markets than ever before.”
The funding boost was welcomed by WWF Scotland director Lang Banks, who said: “Scotland has a well-deserved reputation for innovation, so it’s great to see Alexander Dennis receive support to research and develop low carbon vehicles. Their success story goes to show that the transition to a low-carbon future, including in areas such as transport, can bring economic benefits, creating and securing jobs.”