Volvo CE acquires dealer L.B. Smith in the United States

Volvo Construction Equipment, Volvo CE, has today announced the purchase
of  the  assets associated with the Volvo distribution business of  L.B.
Smith, Inc., its largest dealer in the United States and distributor for
a majority of the East Coast.

Volvo  CE  takes  over  the  assets, primarily  inventory,  and  certain
liabilities  at fair wholesale market value. No goodwill or real  estate
is included in the deal.

Volvo  CE  intends  to  continue  the operation  from  the  existing  31
locations  in  Florida,  Georgia, Tennessee, Alabama,  North  and  South
Carolina, New Jersey, eastern Pennsylvania and New York. The new company
will be doing business as LB Smith.

Volvo  CE's action is taken in order to ensure that the Volvo  customers
in  these territories continue to receive highest possible standards  of
product support and service.

"More  than  4  years  of  recession  in  the  overall  US  market   for
construction equipment is impacting both manufacturers and  dealers.  We
feel  it's  important to show our customers and the  employees  of  L.B.
Smith  our  strong  commitment  to the  US  market,"  says  Scott  Hall,
Executive  Vice President and responsible for Global Marketing  &  Sales
within Volvo CE.

Volvo's  strategy  to  work  mainly together  with  independent  dealers
remains  and  the  ambition  is to spin off  the  acquired  distribution
business, most likely in a number of smaller pieces compared with today.

"We  have  already been approached by people who have a sincere interest
to  invest  in  the Volvo brand and distribution of our products,"  says
Scott Hall.

For further information, please contact:

Klas Magnusson. Senior Vice President, Corporate Communications, Volvo
Construction Equipment
Tel: +32 2 482 5065, Mobile: +32 475 576214

Christer Johansson, Investor Relations, AB Volvo
Tel: +46 31 66 13 34
May 7, 2003