Press releases 2001

Volvo Bus de Mexico is announcing a reduction of the workforce by 900 persons. The reason is that a significant order was taken in 1999 consisting of 900 Volvo buses, for which deliveries are about to be finalised. The production capacity will therefore at this stage be adapted to the current market conditions affected by the downturn in the Mexican economy.

Volvo Penta has signed an agreement to supply boat engines to the French boat-builder Beneteau Group. The agreement is valued at approximately SEK 200 M for Volvo Penta.

Deliveries from Volvo Global Trucks, which comprises Mack Trucks, Inc., Renault V.I. and Volvo Trucks, during the period January-July 2001 amounted to 91 872 units compared to 107 037 in the same period last year, a decrease of 14%. Order intake was down 11%, of which North America was down 31% and Europe 5% compared to the same period last year.

Volvo Technology Transfer, a wholly-owned subsidiary in the Volvo Group, has made an investment in Wipcore AB, a Swedish company which has created a platform for efficient e-business and information management.

Volvo Trucks North America has agreed to sell its Xpeditor® low-cab-over-engine (LCOE) truck product line to Grand Vehicle Works Holdings, LLC. By divesting its LCOE operations, Volvo meets the condition imposed by the U.S. Department of Justice for approval of its December 2000 acquisition of Renault V.I./Mack.

The Volvo Group is focusing on a long-term program to create a more competitive industrial structure and on immediate measures to adapt operations to the prevailing market situation. Despite the business climate, some parts of the Group delivered very good results in the second quarter and we noted a number of promising trends. Growth is strong in some parts of the Group, we are gaining market shares, Penta and Aero continue to deliver strong performance and cash flow has been significantly improved, says Leif Johansson, CEO.

Volvo Penta has won an order for a total of 800 industrial engines in Brazil. The order, which is valued at about SEK 100 M, is an important step in Volvo Penta's expansion of its industrial operations in South America.

AB Volvo hereby invites the mass media to a press conference on July 24 in conjunction with the release of the Volvo Group's report on the first six months 2001.

Volvo Bus Corporation and Carrozzeria Autodromo Modena have signed a co-operation agreement for the marketing of Midibuses in the European market and for the marketing of City and Intercity buses in Italy.

Volvo Buses has received orders for 200 buses from major bus operators in the city of Shanghai. On 30 June 2000, it was announced that the Volvo Bus Corporation and local industrial group Shanghai Automotive Industry Corporation (SAIC) had signed agreements concerning the establishment in Shanghai of a joint-venture company for the manufacture anda sale of city and commuter buses. Since then the new company, Shanghai Sunwin Bus Corporation (Sunwin Bus) has been established and production of Volvo buses has started. The orders symbolise a breakthrough for the Shanghai joint venture.