‘To achieve more from less’ has been the oft-quoted phrase in auto industry for quite some time. This philosophy has many analogies like fuel efficiency, modularity, weight reduction, alternative fuels etc. Of these ‘modularity’ is seen as an effective tool, especially for automotive OEMs catering to a wide portfolio of similar products.This paper discusses the implications of modularization on a passenger bus OEM, by taking the ‘bus super structure’ as a test case. The modularized bus structure is compared with the conventional structure for design strength, safety, weight and more importantly manufacturing flexibility. The challenges faced in each of these aspects are discussed. From the study it was understood that the task of manufacturing body modules and interfaces is complex and it calls for a complete revamp of existing fixtures, material handling equipment and even the prescribed tolerances.Considering existing manufacturing processes, adopting modularity in manufacturing is not pragmatic, at least for bus body.A new approach of design modularity with standard parts is proposed. In design modularity the modules are defined by virtual boundaries. The overall dimensions of these virtual modules and the standard parts within these modules are decided considering the complete portfolio of buses. Different capacities of buses are derived by permutation and combination of a few unique virtual bays. This approach helps reduce the number of unique parts to a large extent. When it comes to manufacturing, these virtual modules are aggregated and disaggregated into conventional sub assemblies to facilitate efficient and flexible manufacturing.