Press releases 2005

Volvo Aero Corporation has signed a Long-Term Support Agreement with UBE Chemical Europe S.A. in Castellón, Spain. The agreement means that Volvo Aero will provide all planned and unplanned maintenance on UBE's LM1600 gas turbine package during a full overhaul life cycle, equating to a period of approximately seven years.

Volvo Trucks is opening a new factory in Durban, South Africa. At the same time operations are being closed down at the assembly plant in Botswana. Underlying the decision is the call for shorter lead times and lower freight costs.

Volvo Buses is taking its next step in India on the city bus market, which is one of the world’s largest. The company has received its first order for 25 city buses from Bangalore.

Administrative Court of Appeal has delivered rulings in several tax cases affecting different companies in the Volvo Group. Taken as a whole, the Administrative Court of Appeal rulings will have a positive effect of about SEK 300 M on AB Volvo's second-quarter earnings.

If trucks were equipped with a power unit driven by fuel cells, the carbon dioxide emissions from a single truck could be reduced by an estimated 20 to 30 tons per year. As a result, trucks would not have to run at idle to have an electrical supply when they are parked. In an effort to solve this problem, Volvo is now starting a joint-venture company for the development of power units based on fuel cell technology. The power unit features a newly patented technology and is so compact that they can be installed in standard trucks.

The Indonesian airline Lion Air and Volvo Aero have signed an agreement in which Volvo Aero assumes responsibility for the engines to Lion Air's fleet of MD80 aircraft. This represents an order value for Volvo Aero of USD 17 M, about SEK 120 M, annually. The contract may increase, since Lion Air has announced its intention to expand its MD80 fleet during the contract period.

At the international Paris Air Show at Le Bourget, Volvo Aero will display the successfully engine tested rear turbine frame of the European technology engine CLEAN. The rear frame was designed, developed and manufactured by Volvo Aero.

AB Volvo has decided to invest SEK 650 M in a new paintshop at its cab plant in Umeå, in northern Sweden. The new paintshop will be the cleanest topcoat paintshop in the world. The investment is being made possible by a regional investment grant of SEK 45 M from the Swedish National Board for Industrial and Technical Development and an environmental grant of SEK 85 M from the EU. "It is extremely gratifying that we can now make this investment and that we will simultaneously have the opportunity to build the cleanest unit for topcoat application in the world," says Leif Johansson, President and Chief Executive Officer of Volvo.

Total deliveries of trucks from the Volvo Group’s three truck companies increased 22% through April this year, compared with the year-earlier period. Deliveries from Mack rose 57%, while deliveries from Renault Trucks were up 11%. Deliveries from Volvo Trucks increased 23% during the period.

The Volvo Group is showing a truck equipped with a DME engine for the first time today. DME (dimethylether) is an LPG-like fuel that can be produced from biomass and residual products from paper pulp production. "DME offers major benefits environmentally and we believe that DME can be an excellent fuel for future commercial transports," says Leif Johansson, Volvo's CEO.