Volvo Unveils Proprietary Medium-Heavy Engine

STOCKHOLM, Sweden--(Business Wire)--
Regulatory News:

At Volvo`s (STO:VOLVA) (STO:VOLVB) Capital Market Day in Eskilstuna, Sweden, on
Tuesday, Volvo CEO Leif Johansson announced that the Group had developed its own
medium-heavy engine for trucks and buses scheduled for launch in 2010. Leif
Johansson also said that the focus of the next few years will be on internal
efficiency. Furthermore, he stated that the sales trend in trucks has continued
to weaken in the second quarter, something that can also be discerned from the
truck delivery figures presented by the Group in the spring. Since the Group is
endeavoring to reduce its inventory of new products, capacity utilization in
manufacturing is generally at very low levels in the plants.

In his presentation, Leif Johansson said that after the substantial growth
achieved in recent years through both acquisitions and organic growth, the Group
has now reached the critical mass necessary to become globally competitive. The
focus of the next few years will be directed more toward enhancing internal
efficiency, for example, by taking advantage of synergies.

Leif Johansson said that the Volvo Group is developing an in-house, Group-wide
platform for medium-heavy diesel engines. The first of these new medium-heavy
engines will be launched in 2010. In addition, Leif Johansson said that the
Volvo Group`s investments in research and technology will remain at high levels
in the next few years since new emissions legislation will be introduced for
trucks, buses and construction equipment. In the future, the emissions laws from
the various countries will become more harmonized and by having a global
technology platform in place, the Volvo Group will be able to generate economies
of scale in research and development as well as purchasing and production.

Leif Johansson also spoke of the significance of continuing to develop
additional services and accessories that support products throughout their
entire lifecycles. The trucks and machines in operation require spare parts,
service and maintenance. The Volvo Group possesses a large population of
products in most markets, which is particularly significant in an economic
downturn when sales of new products are low. Sales of, for example, spare parts,
service, financing and other services have also not declined to the same extent
as the sale of new products.

In his presentation, Leif Johansson also commented on market trends: "We have
not yet seen any signs of our primary markets in Europe or North America
recovering, although we may have started seeing indications of trends leveling
out. We are working intently on reducing our stock of trucks and construction
equipment, while striving to defend our price levels. In light of the weak
demand in the market, we have made further reductions to production compared
with the first quarter. We will continue to have low cost coverage until we have
balanced our stocks and costs with demand in the market, and this will impact
profitability," said Leif Johansson.

In addition, Leif Johansson stated that the Volvo Group had noted a slight
upturn in certain countries, such as China, India and Japan, largely due to
government stimulus packages.

In his presentation, Mikael Bratt, CFO of the Volvo Group, described the
measures being implemented throughout the Group to reduce cost levels and
improve cash flow. He also said that the Volvo Group has high liquidity reserves
despite the sharp economic downturn, and that the company has an advantageous
loan structure with few loans maturing in the next two years. Furthermore, with
its global presence, the Group has excellent opportunities for raising loans on
the capital market.

June 16, 2009

For further information visit VolvoGroup.com:
http://www.volvo.com/group/global/en-gb/investors/investor_days_presentations/2009/capitalmarketday.htm

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The Volvo Group is one of the world`s leading manufacturers of trucks, buses and
construction equipment, drive systems for marine and industrial applications,
aerospace components and services. The Group also provides complete solutions
for financing and service. The Volvo Group, which employs about 100,000 people,
has production facilities in 19 countries and sells their products in more than
180 markets. Annual sales of the Volvo Group amount to about SEK 300 billion.
The Volvo Group is a publicly-held company headquartered in Göteborg, Sweden.
Volvo shares are listed on OMX Nordic Exchange Stockholm. Please visit
www.volvogroup.com for more information or visit www.volvogroup.mobi if you are
using your mobile phone.

AB Volvo
Mårten Wikforss,
+46 31 66 11 27 or +46 705 59 11 49
or
Christer Johansson
Investor Relations
Tel +46 31 66 13 34
or
Patrik Stenberg
Tel +46 31 66 13 36
or
Anders Christensson
Tel +46 31 66 11 91

Copyright Business Wire 2009