VOLVO AERO SIGNS ENGINE CONTRACT FOR AIRBUS A380

Volvo has signed a contract with German MTU covering production of
components to the GP7000, one of the engine alternatives to be mounted
on the forthcoming Airbus super jumbo A380. In accordance with the
agreement, Volvo Aero will produce the housing for the low-pressure
turbine to the GP7000 for a period of about 15 years. The order value is
estimated at approximately SEK 1 billion.

Volvo will produce the housing for the engine's low-pressure turbine
(LPT). In total, the contract covers 1,000 engines. In addition, Volvo
Aero will now immediately become involved in the development program for
the GP7000 engine, which is not fully developed, with manufacturing of
development hardware. The first LPT will be delivered as early as
September 1 this year and series production will commence in 2005. As a
result of this new agreement with MTU, Volvo Aero is involved in both
engine alternatives for the A380 aircraft.

The engine is being built in cooperation between two leading aircraft
engine manufacturers, GE Aircraft Engines and Pratt & Whitney, and is
based on the best of the two companies' most successful engines, the
GE90 and PW4000. Volvo Aero produces components for both of these
engines. The Airbus 380 will be the world's largest aircraft and at the
same time the first aircraft with two full-length deck levels and three
aisles between the passenger seats. The aircraft will be able to carry
555 passengers and the first A380 is scheduled to enter traffic during
2006.

For additional information, contact Fredrik Fryklund, +46 520 94401.

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 71,000 people, has production facilities in
25 countries and sells their products in more than 185 markets. Annual
sales of the Volvo Group amount to 18 billion euro. The Volvo Group is a
publicly held company headquartered in Goteborg, Sweden. Volvo shares
are listed on the stock exchanges in Stockholm, London, Brussels and
Frankfurt and on NASDAQ in the US.