Volvo invests in U.S. powertrain facility

AB Volvo, one of the world's largest producers of heavy-duty diesel
engines, today announced that Volvo Powertrain will make its U.S.
facility in Hagerstown, Maryland, the Centre of Excellence for the North
American market. A four-year investment program will prepare the
facility for delivering the next generation diesel engine family for the
Volvo Group's two North American truck brands - Mack and Volvo.

"The decision represents an important commitment to the North American
truck market," said Leif Johansson, president and CEO of the Volvo
Group. "Backed by our considerable global resources and expertise,
Hagerstown will ensure that demanding Mack and Volvo customers in this
market can expect industry-leading quality and performance for years to
come."

The Hagerstown plant has been producing Mack engines since 1961 and did
recently deliver its 1.000.000 engine. The Volvo truck engines currently
in operation in North America are built at Volvo Powertrain's plant in
Skovde, Sweden.

"We are very pleased to have reached this final decision after a very
extensive analysis on the best way to deliver products of the highest
quality and performance to the market", said Denis Leblond, senior vice
president of Volvo Powertrain's North American division. "This
investment will further enhance our ability to leverage the high skill
level and commitment of our US workforce to serve the unique needs of
each brand's customers with a full application excellence focus."

Located about 75 miles northwest of Washington, DC, the Hagerstown
facility has a total area under roof of about 1.5 million square feet.
It includes all design functions in addition to manufacturing, has
earned registration of its quality system to the ISO 9000:2000
international standard, and the ISO 14001 international environmental
standard. It currently employs just over 1,200 people.

October 9, 2003


For further information, please contact:
Media Relations:
Marten Wikforss, AB Volvo, +46 31 66 11 27
Jorgen Gustafsson, Volvo Powertrain, +46 31 322 28 49
Jim McNamara, Volvo Trucks North America, +1 336 393 2143
Bob Martin, Mack Trucks, Inc. +1 610 709 2670

Investor Relations:
Fredrik Brunell, AB Volvo, +46 31 66 11 91