It was formed in March 1985 from parts of Walter Alexander & Sons (Midland) Ltd and Central SMT, initially with six depots and a varied fleet of 381 vehicles.

Operating from its head office in Bishopbriggs and depots in Old Kilpatrick, Milngavie, Kirkintilloch, Kilsyth, Stepps and Cumbernauld, Kelvin Scottish had an operating area bounded by Loch Lomond to the west, Cumbernauld to the east, the Campsie Fells to the north and the River Clyde to the south.

Kelvin was the largest operator in Dunbartonshire and north east Glasgow, and was responsible for urban, rural and interurban services.

Historically, Glasgow Corporation had sought to prevent Scottish Bus Group services from penetrating into the middle of the city centre, partly to avoid congestion in the busiest streets but also as a means of bolstering their own tramway revenue.

On the other hand, a significant proportion of Kelvin's route network served the city's suburbs and peripheral estates and had been protected from competition from Strathclyde Buses due to the arbitrary company boundaries which regulation had created.

As the city had expanded outward, Glasgow Corporation had not been allowed to extend its own services to serve these new estates as they were deemed to be SBG 'territory'.

The elderly Routemasters were faster than other buses because instead of passengers paying the driver on entry the fares were collected by a conductor whilst on the move, and the much shorter dwell time at bus stops gave Kelvin a competitive advantage over Strathclyde Buses' slower one-person-operated services.

However the situation was not sustainable as there were not enough passengers to make so many competing services viable, and ultimately Strathclyde Buses prevailed.

[5][6] Many of the competing routes introduced in 1986 were withdrawn in July 1987, and 70 vehicles were taken out of service, including some Routemasters and the majority of the new minibuses.

As a result of increased competition in Dunbartonshire following deregulation, Kelvin decided to introduce additional fleetnames to its vehicles to establish local identities.

[14] In 1988 a new fares scheme, the Glasgow Gold Card, was introduced, offering weekly travel on all SBG routes in the city.

[16] Full-sized buses purchased new in 1986-87 comprised a solitary Leyland Lynx (the only one of its type in the Scottish Bus Group),[17] ten MCW Metrobus dual-purpose double deckers for Cumbernauld to Glasgow express services and four Leyland Tiger coaches for Scottish Citylink work.

Six rare Leyland-DAB Lion dual-purpose double-deckers were also ordered for delivery in 1987, but owing to the large cut in Kelvin's peak vehicle requirement their purchase was cancelled and they were instead bought by Clydeside Scottish.