The division of German automaker Daimler that makes transit buses for Toronto, Ottawa, New York and other cities across North America is closing its lone Canadian factory as it winds down operations.

Daimler Buses said Wednesday that the business of making transit buses "suffers from low public sector investments by municipal government agencies" and is "likely to remain depressed over the next several years."

As a result, the company is shutting down its plant in Mississauga, Ont., over the next 12 months, it said in a statement. There are 390 workers there.

Its other transit-bus factory, in Oriskany, N.Y., will continue operating as a parts and service facility.

The two factories make Orion-brand transit buses, thousands of which are in use by transit agencies like the Toronto Transit Commission, OC Transpo in Ottawa, the MTA in New York City, King County Metro in Seattle and Houston's Metro. The buses come in versions including diesel-electric hybrids, diesel only and natural gas-powered.

As recently as 2010, Daimler Buses was boasting about being the world's largest manufacturer of hybrid transit buses, with a backlog of 850 orders. In September, it announced its most recent sale of 51 Orions to Washington, D.C.

All those orders will be filled before the Mississauga factory closes its doors, the company said.

"Daimler Buses considered all possible options for reconfiguring our transit bus operations in North America, but at the end of the day… the local market is in a continued slump, and growth opportunities are not available from selling the product overseas," Hartmut Schick, head of Daimler Buses, said in the statement.

The Orion bus company began in 1975 in Mississauga and opened its New York state factory six years later. It was acquired in 2000 by a Daimler subsidiary in 2000.

Daimler is best known as the maker of Mercedes vehicles.