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Volvo AB (VOL)

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Thursday 24 October, 2002

Volvo AB

Volvo - nine months ended September 30, 2002


Volvo  - nine months ended September 30, 2002
                                                                    
                                             First nine months
                                                           2002     2001
                                                                        
Net sales, SEK M                                        131 203  131 982
Operating income excluding                                2 014    2 413
restructuring costs, SEK M
Operating income, SEK M                                   2 014    (312)
Income after financial                                    1 276  (1 319)
items, SEK M
Net income, SEK M                                           755    (980)
Sales growth, %                                             (1)       51
Income per share during most                               0.60     0.70
recent 12 months period, SEK
Return on shareholders'                                     0.3      2.4
equity, %
                                                                        



·    Improved earnings within Trucks in the third quarter as a result of
increased deliveries in all markets and to a positive contribution  from
synergies.

·     Operating  income  in the third quarter of 2002  was  SEK  817  M,
compared  with  an  operating loss of SEK 1,618 M  in  the  year-earlier
period.

·    Cash flow in the third quarter was a negative of SEK 0.9 billion.

·     Volvo  Aero  was affected in full by the general downturn  in  the
aviation industry.

·     Asian  markets continue to develop favorably across  all  business
areas, primarily driven by high momentum in China.

·     Lower  operating income in Volvo CE due to weak markets and  price
pressure.

Comments by the Chief Executive Officer

Despite  the difficult business climate, the Group's third - and usually
weakest  quarter - contained a number of positive trends. Most important
is  the  increased contribution from the truck operations, where we  now
see clear effects of synergies.

In  Western  Europe,  the demand for the new Volvo  and  Renault  models
continued  to  be  strong. Both brands gained market shares  and  showed
improved profitability.

We have also noted underlying improvements in North America, even though
the  sales  increase primarily was a result of the peak  linked  to  the
implementation of the new emission standard.

I  am  also  pleased to see that Volvo Penta continues  to  gain  market
shares  and deliver strong financial results. Another positive trend  is
our  strong  growth in Eastern Europe and Asia, particularly  China  and
South  Korea  that  now represents healthy business and  a  considerable
portion of the Group's sales.

On  the  negative  side,  the deep downturn  in  the  aviation  industry
seriously affected our aerospace operations in the third quarter,  which
is reflected in the on-going adjustments of capacity.

Shrinking tourism also impacted Volvo Buses' profitability and demand in
the important coach segment declined.

Volvo CE's major markets continued to decline, in North America for  the
thirteenth consecutive quarter. Combined with introduction costs related
to  the  broadening of the compact segment and a very competitive  North
American market, this resulted in weaker earnings.

As a whole, however, the financial results show significant improvements
compared with the corresponding period last year.

Looking ahead, I see both areas of concern and areas of opportunities.

The  concern consists mainly of the uncertainty of how the world economy
will develop. World political tensions and fear of new terrorist attacks
has  increased  uncertainty  about the  timing  of  a  general  economic
recovery.  With  this uncertain outlook, business cycle management  will
remain in focus.

The opportunities lie in structural improvements that are well under way
and our strong product renewal.

In  North  America, the industrial restructuring continues according  to
plan.  The Winnsboro plant will be closed in November and the operations
transferred to the New River Valley facility. The production ramp-up  of
the   new  and  well-received  Volvo  VN  series  will  be  accomplished
simultaneously, which is good timing since capacity utilization will  be
low  in  the  quarters ahead. The on-going strengthening of  the  dealer
network in North America is in full progress.

The  exit from the US city bus market is now concluded following closure
of  the Schenectady plant in the third quarter and the last bus from the
Roswell  plant was completed in October. Combined with large Mexico  and
Canada  orders and a positive profitability trend in Prevost, the  North
American bus operations are well on the way toward stability.

Our  product renewal program is also proceeding as planned. We have made
several  successful  product introductions during  the  year,  including
EPA02 certified engines that we believe provide the best performance  in
the market and a minimum of environmental impact.



Leif Johansson

Significant events during the third quarter of 2002

Volvo  and  Mack  received engine approvals from  the  US  Environmental
Protection Agency (EPA)
On  September 30, Volvo received a conditional approval from the EPA  in
the  US  to  manufacture and sell trucks with its EPA02-compliant  VED12
diesel  engine after October 1, 2002. Mack's ASET Highway (C-EGR) engine
family  was  certified to the EPA02 standard by EPA in July  and  Mack's
ASET   Vocational  (I-EGR)  engine  family  received  conditional  EPA02
certification in September.

Volvo Trucks introduced the new Volvo VN in the US
On  August  21, Volvo Trucks introduced an entirely new truck range  for
the  North  American  market. Volvo is the  only  manufacturer  to  have
developed an all-new truck to meet the tougher EPA 02 demands that  came
into force in the US on October 1. The new VN truck models equipped with
the  new  EPA-compliant engines will deliver a competitive fuel economy.
The project has been three years in the development and the new truck is
based on the same platform as the recently introduced Volvo FH and Volvo
FM  trucks.  The total investment for the Volvo VN amounts  to  SEK  1.8
billion  (USD 190 M).  To date, more than 3,000 orders have been  placed
for the new Volvo VN, customers include Knight Transportation, US Xpress
and Tyson Food.

New large order from Iran for 1,300 Volvo trucks
In  September, Volvo Trucks secured an order for a total of 1,300  Volvo
FH12 trucks to Iran. The order is valued at a total of about SEK 600  M.
The  new order is part of a co-operation agreement with Saipa Diesel  of
Iran.  The  vehicles  are  assembled with a certain  local  content  and
earlier this year more than 1,000 orders were signed.

New Volvo compact wheel loaders
In  September,  Volvo CE launched the new L20B and  L25B  compact  wheel
loaders;  featuring  new  powertrains, new cabs  and  a  distinct  Volvo
design.

Production start at Volvo CE's new factory in Poland
On  September 13, Volvo CE officially opened its new factory in Wroclaw,
Poland. The factory will serve as a global center for production of  the
new backhoe loader launched at ConExpo, in Las Vegas, earlier this year.

Large order of Volvo city buses to Shanghai
On  August  15,  Volvo Buses' Joint Venture for city buses  in  China  -
Shanghai  Sunwin Bus Corporation - marked a major breakthrough with  the
signing  of  an order for 500 Volvo city buses with one of  the  leading
Shanghai  Operators, the Shanghai Ba-shi (Group) Industrial Co.Ltd.  The
order  is  valued at approximately SEK 500 M. The agreement includes  an
option  for  an  additional 500 Volvo buses, with  deliveries  scheduled
during the second half of 2003 and 2004.

Volvo Buses received an order for 340 coaches in Mexico
On  July  8, Volvo Buses de Mexico received an order for 340 first-class
and  luxury  coaches  in  Mexico from one of the  leading  operators  of
intercity  traffic,  the ADO Group. The value of the  order  amounts  to
approximately  USD  70 M and the deliveries will  take  place  during  a
fourteen-month period, beginning in October 2002.

Volvo Penta received an order for 900 industrial engines
On August 13, Volvo Penta secured an order from Saudi Arabia for a total
of  900 diesel engines, mainly for use in irrigation. The total value of
the order is approximately SEK 200 M.

Volvo Penta introduced telematics
During  the  third  quarter,  Volvo  Penta  introduced  the  first  ever
telematic  solution  for  the  boating industry.   This  satellite-based
communications  network improves security, safety and enjoyment  of  any
size  of boat. When installed onboard, the system connects the boat  and
its   crew   to   Volvo  Action  Service,  which  will  allow   constant
communications  with  mainland.  In  a  first  stage,  Volvo  Penta  has
introduced  telematics  in the U.S, but the service  will  gradually  be
available also in other parts of the world.

Significant events earlier in 2002

New structure for Volvo's truck operations
Since Volvo's acquisition of Renault V.I. (now named Renault Trucks) and
Mack  Trucks,  a  large  part  of the operations  has  been  focused  on
immediate  integration programs and the development of  a  strategy  for
future  product plans for both trucks and engines. Most of this work  is
now  completed and the years immediately ahead will be characterized  by
implementation of approved strategies and product plans. As  of  January
7, 2002, Volvo, Mack and Renault Trucks are separate business areas.

Volvo CE launched new products
In  the  first quarter Volvo CE launched its B-series of excavators  and
the new Volvo E-series of wheel loaders. In the second quarter Volvo  CE
launched the new Volvo B-series of motor graders.

Volvo Aero Engine Services lands major overhaul order from Aeroflot
Volvo  Aero  signed  an  agreement with the  Russian  airline  Aeroflot,
whereby  Volvo Aero will overhaul Aeroflot's JT9D-59A engines,  powering
its DC 10-40 aircraft. The initial value of the contract is about USD 60
M,  making  it the largest overhaul contract signed by Volvo Aero  since
1998. There is also a potential for a total order value of USD 120 M  if
Aeroflot decides to add more DC 10-40's to its fleet.

Volvo Buses chosen as preferred supplier
In June 2002, Volvo Buses was chosen as preferred supplier by two of the
leading bus operator groups in Mexico. The contract gives Volvo Buses  a
leading  position within the upper segments in the Mexican  market.  The
deliveries involve 1,800 buses and are now starting up. Deliveries  will
continue  until  mid-2005.  The  total framework  agreement  amounts  to
approximately SEK 3 billion. This agreement follows an earlier order for
900 units of Volvo 7550, most of which were delivered in 2000 and 2001.

Volvo CE establishes production facility in China
Volvo  CE  has  decided  to  establish a  wholly  owned  subsidiary  and
production  facility, for the manufacture of construction  equipment  in
Shanghai,  China.  The  new  facility is  scheduled  to  be  taken  into
operation  by spring 2003 and will be used for the assembly  of  crawler
excavators. The company will initially have 150 employees.

AB Volvo celebrated its 75th anniversary
On  April 14, 2002, Volvo celebrated its 75th anniversary. On that  day,
it  was  exactly 75 years since the first produced Volvo car, the  Volvo
ÖV4, rolled off the assembly line on the island of Hisingen, Gothenburg.
Since then, Volvo has developed from a small local company to one of the
world's  leading  manufacturers of heavy trucks, buses and  construction
equipment,  with more than 70,000 employees worldwide and a presence  in
over 125 countries.


The Volvo Group - 2002

Net sales
Net  sales of the Volvo Group for the third quarter of 2002 amounted  to
SEK  41,524  M,  compared with SEK 41,134 M in 2001, an increase  of  9%
adjusted for changes in currency rates and group structure. The increase
in  net  sales is largely related to increased truck deliveries in  most
markets.

Net  sales  of  Trucks  amounted to SEK 28,507 M,  an  increase  of  18%
adjusted  for  currency effects compared with the  year-earlier  period.
Deliveries in Europe increased by 7% following the introduction  of  the
new Volvo FH and Volvo FM trucks in combination with high deliveries  of
Renault  trucks in Southern and Eastern Europe. Deliveries  improved  in
North  America to 11,043 vehicles, up 56% compared with the year-earlier
period as a result of high demand for pre EPA02 vehicles.

Net  sales of Buses for the third quarter of 2002 amounted to SEK  2,876
M,  a  decrease of 10% adjusted for currency effects and the  effect  of
consolidating Prévost/Nova Bus using the proportional method as  of  the
fourth quarter 2001. Excluding currency effects, net sales for Volvo  CE
was unchanged. Sales of marine engines remained strong and Volvo Penta's
sales  in the third quarter increased by 4%, excluding currency effects.
As  a  result of the downturn in the airline industry, Volvo Aero's  net
sales declined by 27%, excluding currency effects.

The  Group's net sales in Western Europe increased slightly in the third
quarter mainly due to successful launches of new products. Net sales  in
North  America  were  down  by  2%  due  to  lower  USD  rates  and  the
proportional consolidation of Nova Bus. Sales in South America  declined
26%, while significant growth was noted in Eastern Europe and Asia.

The  distribution  of net sales by market is further  specified  in  the
table below:

Net sales by     Third      First               Change        
market area     quarter  nine months
SEK M             2002    2001    2002    2001    in %    % of
                                                         total
Western Europe  20 292  20 124  67 059  67 445      -1      51
Eastern Europe   1 791   1 328   5 055   3 954     +28       4
North America   13 177  13 381  39 406  42 176      -7      30
South America    1 059   1 439   3 509   4 545     -23       3
Asia             2 940   2 533   8 932   7 230     +24       7
Other markets    2 265   2 329   7 242   6 632      +9       6
Total           41 524  41 134 131 203 131 982     (1)     100

Operating income
Operating income for the third quarter of 2002, amounted to SEK  817  M,
compared with an operating loss, excluding restructuring costs,  of  SEK
212 M in the corresponding period a year earlier.

Trucks'  operating income for the third quarter of 2002 was  SEK  673  M
compared  with  an operating loss of SEK 340 M, excluding  restructuring
costs, in the year-earlier period. Improvements were made in all markets
as a result of increased deliveries and higher margins.

Buses  operating loss declined to SEK 84 M compared with a loss  of  SEK
185 M in the year-earlier period, mainly as a result of positive effects
from  turn-around activities in Europe and in North America. As a result
of  the  weak markets in Europe and North America, Volvo CE's  operating
income declined to SEK 120 M compared with SEK 266 M in the year-earlier
period.  Earnings  for  Volvo Penta continued to be  favorable  with  an
operating  margin  of 6.7% in the third quarter of  2002.  Volvo  Aero's
operating income declined significantly due to weaker demand  and  as  a
result of a weaker USD. Financial Services operating income increased to
SEK 126 M (69). Operating loss for other companies declined to SEK 63  M
in the third quarter of 2002 (loss: 281).

Group  operating  income for the third quarter of 2002 included  a  less
positive effect from capitalization of development costs of SEK  228  M,
compared  with  the  corresponding period in  2001.  These  effects  are
related to new accounting standards, which were applied as of 2001.  The
total   effect  from  capitalization  of  development  costs,   net   of
amortization, was SEK 289 M for the third quarter of 2002, compared with
SEK 517 M in the year-earlier period.

Operating  income  for  the  third quarter was  negatively  affected  by
Swedish  pension costs of SEK 302 M as a result of the weak  development
in the stock market.

Net interest expense
Net interest expense for the third quarter of 2002 improved to SEK 120 M
compared  with  SEK  187 M in the second quarter.  The  improvement  was
mainly  due  to  lower  funding costs in the US combined  with  slightly
higher yield on financial assets in Sweden.

Taxes
During  the  third  quarter of 2002, a tax expense  of  SEK  158  M  was
reported, mainly related to current tax expenses in subsidiaries outside
Sweden.

Consolidated income statements*      Third        First
                                   quarter     nine months
SEK M                                 2002      2001      2002      2001
Net sales                           41 524    41 134   131 203   131 982
Cost of sales                     (34 090)  (34 033) (107 855) (109 156)
Gross income                         7 434     7 101    23 348    22 826
Research and development expenses  (1 335)   (1 279)   (4 213)   (4 030)
Selling expenses                   (3 612)   (3 444)  (11 196)  (10 421)
Administrative expenses            (1 474)   (1 525)   (4 206)   (4 960)
Other operating income and           (378)   (1 063)   (2 430)   (2 574)
expenses
Income from Financial Services         126        69       361       245
Income from investments in              59      (44)        28      (98)
associated companies
Income from other investments          (3)      (27)       322     1 425
Restructuring costs                      -   (1 406)         -   (2 725)
Operating income                       817   (1 618)     2 014     (312)
Interest income and similar            308       466       887     1 265
credits
Interest expenses and similar        (428)     (690)   (1 442)   (2 024)
charges
Other financial income and           (113)      (38)     (183)     (248)
expenses
Income after financial items           584   (1 880)     1 276   (1 319)
Taxes                                (158)       316     (488)       273
Minority interests in net              (5)        29      (33)        66
(income) loss
Net income                             421   (1 535)       755     (980)
                                                                          
Income per share, SEK                 1.00    (3.60)      1.80    (2.30)
 * Financial Services reported in                                       
accordance with the equity method



                                                                         
Key operating ratios, Volvo Group             Third      First
                                             quarter  nine months
%                                               2002  2001    2002  2001
Gross margin                                    17.9  17.3    17.8  17.3
Research and development expenses in % of        3.2   3.1     3.2   3.1
net sales
Selling expenses in % of net sales               8.7   8.4     8.5   7.9
Administrative expenses in % of net sales        3.5   3.7     3.2   3.8
Operating margin*                                2.0 (0.5)     1.5   1.8
Operating margin                                 2.0 (3.9)     1.5 (0.2)
* Excluding restructuring costs

Condensed income statement                 Third   First
- Financial Services                       quarter nine months
SEK M                                        2002    2001    2002   2001
Net sales                                   2 432   2 573   7 315  7 181
Income after financial items                  126      69     361    245
Taxes                                        (40)       9   (102)     63
Net income                                     86      78     259    308
                                                                         
Key ratios - Financial Services                            Sept 30 Dec 31
12 months figures unless otherwise stated                     2002   2001
Return on shareholders' equity, %                              3.8    4.2
Equity ratio at end of period, %                             10.9   10.3
Asset growth first nine months, %                           (6.6)   10.5


Consolidated             Volvo                             Volvo
balance sheets      Group excl                             Group
                     Financial Services    Financial    total            
                             1)             Services
                    Sept 30      Dec 31 Sept 30  Dec 31  Sept 30  Dec 31
SEK M                  2002        2001    2002    2001     2002    2001
Assets                                                                  
Intangible assets    16 895      17 366     136     159   17 031  17 525
Property, plant and  28 017      30 370   2 976   2 864   30 993  33 234
equipment
Assets under         12 135      15 020  12 705  14 060   24 317  27 101
operating leases
Shares and           34 813      35 145     192     203   27 507  27 798
participations
Long-term customer      102          19  25 645  26 256   25 442  26 075
finance receivables
Long-term interest-   4 225       5 627       8       0    4 223   5 554
bearing receivables
Other long-term       8 688       9 017      72      73    8 575   8 902
receivables
Inventories          30 504      30 557     348     518   30 852  31 075
Short-term customer      24          95  22 657  23 732   21 576  22 709
finance receivables
Short-term interest   6 471       6 799       1      82    1 282   2 525
bearing receivables
Other short-term     27 363      29 798   1 802   2 647   28 152  31 044
receivables
Marketable           18 342      12 997     325     517   18 667  13 514
securities
Cash and bank         4 532      11 877   1 835   2 417    6 102  13 869
Total assets        192 111     204 687  68 702  73 528  244 719 260 925
                                                                        
Shareholders'                                                           
equity and
liabilities
Shareholders'        80 014      85 185   7 498   7 550   80 014  85 185
equity
Minority interests      247         391       0       0      247     391
Provision for post-  13 860      14 632      22      15   13 882  14 647
employment benefits
Other provisions     13 527      14 085   3 742   4 342   17 269  18 427
Loans                28 570      29 710  54 248  57 956   76 165  81 568
Other liabilities    55 893      60 684   3 192   3 665   57 142  60 707
Shareholders'       192 111     204 687  68 702  73 528  244 719 260 925
equity and
liabilities
 1) Financial Services reported in accordance with the equity method.

The  Volvo  Group's total assets at September 30, 2002 amounted  to  SEK
244.7  billion, corresponding to a decrease of SEK 16.2 billion compared
with  year-end 2001. Approximately SEK 16.5 billion of the decrease  was
related to currency effects.

Shareholders'  equity amounted to SEK 80.0 billion as of  September  30,
2002,  corresponding  to an equity ratio of 41.8%,  excluding  Financial
Services.  Net  financial  debt on the same date  amounted  to  SEK  8.9
billion.  Net  financial  debt corresponded to  11.0%  of  shareholders'
equity  and  minority interest. The changes in shareholders' equity  and
net financial position since year-end are specified in the tables below.

Change of  Net financial position, SEK bn    Third           First
                                            quarte            nine
                                                 r          months
Beginning of period                                (7.4)           (7.0)
   Cash flow from operating activities         0.8             4.0      
   Investments in fixed assets, net          (1.6)           (4.1)      
   Investments in shares, net                (0.1)           (0.1)      
 Cash-flow after net investments, excluding        (0.9)           (0.2)
                         Financial Services
Debt in acquired and divested operations             0.0           (0.2)
Dividend paid                                        0.0           (3.4)
Change in provision for post employment            (0.3)           (0.8)
benefits
Currency effect                                    (0.2)             3.1
Other                                              (0.1)           (0.4)
Total change                                       (1.5)           (1.9)
Net financial position at end of period            (8.9)           (8.9)
                                                                        
                                                                        
                                                                        


Key ratios                                       Sept 30  Dec 31
     12 month figures                               2002    2001
     unless otherwise
               stated
Sales growth first                                 (0.6)    50.0
nine months, %
Income per share, SEK                               0.60  (3.50)
    Income per share,                               2.60    3.10
            excluding
 restructuring costs,
                  SEK
Return on                                            0.3   (1.7)
shareholders'
equity,%
            Return on                                1.3     1.5
 shareholders' equity
            excluding
 restructuring costs,
                    %
        Net financial                              (8.9)   (7.0)
   position at end of
  period, SEK billion
        Net financial                             (11.0)   (8.2)
   position at end of
 period as percentage
     of shareholders'
  equity and minority
            interests
  Shareholder' equity                               32.8    32.8
         and minority
         interests as
  percentage of total
               assets
 Shareholders' equity                               41.8    41.8
         and minority
  interests excluding
  Financial Services,
     as percentage of
         total assets


Change in shareholders' equity    Jan - Sept
SEK bn                                  2002  2001
Beginning of period                     85.2  88.3
Translation differences                (2.3)   1.5
Repurchase of own shares                   - (8.3)
Issue of shares to Renault SA              -  10.4
Dividend to Volvo's shareholders       (3.4) (3.4)
Net income                               0.8 (1.0)
Other changes                          (0.3)   0.0
Balance at end of period                80.0  87.5
                                                  

                                                          Sept 30 Dec 31
Number of Volvo shares                                       2002   2001
Number of shares outstanding, millions                      419.4  419.4
Average number of shares outstanding during the             419.4  422.4
period, millions
Company shares held by AB Volvo, millions                    22.1   22.1


Cash flow statement                           Third         First
                                            quarter   nine months
SEK bn                                         2002  2001    2002   2001
Operating activities                                                    
Operating income *                              0.7 (1.7)     1.7  (0.6)
Add depreciation and amortization               2.0   1.9     6.1    5.8
Other non-cash items                            0.3   0.5     0.9  (0.1)
Change in working capital                     (1.8)   2.9   (4.1)    3.1
Financial items and income taxes paid         (0.4) (1.3)   (0.6)  (2.1)
Cash flow from operating activities             0.8   2.3     4.0    6.1
                                                                        
Investing activities                                                    
Investments in fixed assets                   (1.5) (1.8)   (4.6)  (5.8)
Investment in leasing vehicles                (0.2)   0.0   (0.3)  (0.3)
Disposals of fixed assets and leasing           0.1   0.2     0.8    0.7
vehicles
Customer Finance receivables, net               0.0   0.7     0.0    0.6
Investments in shares, net                    (0.1) (0.2)   (0.1)    2.8
Acquired and divested operations                0.0 (0.7)     0.0   14.8
Cash-flow after net investments excl          (0.9)   0.5   (0.2)   18.9
Financial Services
                                                                        
Cash-flow after net investments, Financial    (0.4)   0.1   (2.6)  (4.1)
Services
                                                                        
Cash-flow after net investments, Volvo        (1.3)   0.6   (2.8)   14.8
Group total
                                                                        
Financing activities                                                    
Change in other loans, net                    (0.5) (1.7)     2.2    2.5
Loans to external parties, net                  0.6 (0.2)     1.8  (1.3)
Repurchase of own shares                        0.0   0.0     0.0  (8.3)
Dividend to AB Volvo shareholders               0.0   0.0   (3.4)  (3.4)
Other                                           0.0   0.2     0.0    0.0
Change in liquid funds excl translation       (1.2) (1.1)   (2.2)    4.3
differences
Translation difference on liquid funds          0.1   0.0   (0.4)    0.7
Change in liquid funds                        (1.1) (1.1)   (2.6)    5.0
* excluding Financial Services                                          

Condensed cash-flow statement, Financial       Third         First
Services                                     quarter   nine months
SEK bn                                          2002  2001    2002  2001
Cash-flow from operating activities              0.9   2.0     3.5   3.0
Net investments in credit portfolio etc        (1.3) (1.9)   (6.1) (7.1)
Cash-flow after net investments                (0.4)   0.1   (2.6) (4.1)

The Volvo Group's cash flow
Cash  flow  after  net  investments, excluding Financial  Services,  was
negative  in  an amount of SEK 0.9 billion during the third  quarter  of
2002.  The negative cash flow in the quarter was mainly due to a  higher
level   of   working  capital  tied-up  in  inventories   and   customer
receivables.

Cash  flow after net investments within Financial Services was  negative
in an amount of SEK 0.4 billion in the third quarter (positive 0.1).

Net  borrowing  decreased during the third quarter by SEK  0.5  billion.
During  the same period, total liquid funds decreased by SEK 1.1 billion
and amounted to SEK 24.8 billion as of September 30, 2002.

Financial review by business area

Net sales        Third       First                  Change         12
               quarter    nine months                          months
SEK M             2002     2001     2002      2001   in  %     moving
                                                               values
Trucks          28 507   25 611   87 619    83 988       4    120 199
Buses            2 876    4 001   10 183    12 631    (19)     14 227
Construction     5 061    5 388   15 725    16 143     (3)     20 717
Equipment
Volvo Penta      1 735    1 774    5 946     5 486       8      7 840
Volvo Aero       1 961    2 994    6 784     8 661    (22)      9 907
Other            1 384    1 366    4 946     5 073     (3)      6 946
Net sales       41 524   41 134  131 203   131 982     (1)    179 836
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
Operating        Third             First                12  Jan - Dec
income         quarter       nine months            months
SEK M             2002     2001     2002      2001  moving       2001
                                                    values
Trucks             673    (340)      682       449   1 273      1 040
Buses             (84)    (185)    (127)     (293)   (358)      (524)
Construction       120      266      453       755     589        891
Equipment
Volvo Penta        117      141      488       530     616        658
Volvo Aero        (72)      118       46       564     135        653
Financial          126       69      361       245     441        325
Services
Other             (63)    (281)      111       163      91        143
Operating          817    (212)    2 014     2 413   2 787      3 186
income*
Restructuring        -  (1 406)        -   (2 725) (1 137)    (3 862)
costs
Operating          817  (1 618)    2 014     (312)   1 650      (676)
income
*excl                                                                 
restructuring
costs
                                                                     
                                                                     
                                                                     
                                                                      
Operating        Third             First              12 *    Jan-Dec
margin         quarter       nine months            months
%                 2002     2001     2002      2001  moving       2001
                                                    values
Trucks             2.4    (1.3)      0.8       0.5     1.1        0.9
Buses            (2.9)    (4.6)    (1.2)     (2.3)   (2.5)      (3.1)
Construction       2.4      4.9      2.9       4.7     2.8        4.2
Equipment
Volvo Penta        6.7      7.9      8.2       9.7     7.9        8.9
Volvo Aero       (3.7)      3.9      0.7       6.5     1.4        5.5
Operating          2.0    (0.5)      1.5       1.8     1.5        1.8
margin*
Operating          2.0    (3.9)      1.5     (0.2)     0.9      (0.4)
margin
         *excl                                                       
 restructuring
         costs

Trucks
At  the  beginning  of 2002, the Volvo Group changed the  organizational
structure of its truck operations by making the three truck companies  -
Mack  Trucks, Renault Trucks and Volvo Trucks - separate business areas.
The  joint  organization  for Product Planning, Purchasing  and  Product
Development, Volvo 3P, has formed a separate internal business unit.

Net sales by market area   Third       First               Change
                          quarter   nine months
SEK M                        2002   2001     2002    2001    in %
Europe                     15 156 14 098   48 512  47 411      +2
North America               9 181  7 632   26 551  25 107      +6
South America                 789  1 003    2 526   3 021    (16)
Asia                        1 438    954    4 082   2 883     +42
Other markets               1 943  1 924    5 948   5 566      +7
Total                      28 507 25 611   87 619  83 988      +4

Total market
The  total  market for heavy trucks in Western Europe  declined  by  14%
through  August 2002 (through June - 16%). On an annualized  basis,  the
total  market  is expected to decline by approximately  10%  to  215,000
(237,000) units. The demand in Western Europe has improved mainly in the
UK,  France,  Italy  and  Spain while some  countries  show  significant
decline: Germany (-18%) and Portugal (-30%).

In  the  US,  the  total market for class 8 vehicles  through  September
increased by 2% to 108,581 (106,433) units. On an annualized basis,  the
total  market  is  expected  to reach a total of  approximately  142,000
(2001: 140,000). The corresponding figures for North America, comprising
the  US,  Canada  and Mexico, are approximately 172,000  (171,000).  The
recently  enacted  legislation  in the US  governing  exhaust  emissions
(EPA02) and the evaluation of the performance of the new EPA02-compliant
engines  has  generated continued uncertainty in regard to  near  future
demand for heavy trucks.

Deliveries
The  Group's total deliveries during the third quarter of 2002  amounted
to  37,515  vehicles, an increase of 20% compared with the  year-earlier
period.  In  Europe, 20,338 trucks were delivered in the  third  quarter
compared  with 18,993 trucks in 2001. Both Renault and Volvo managed  to
maintain  a  high level of deliveries. Deliveries in North  America  was
positively  affected by EPA02-prebuys, and reached  a  total  of  11,043
vehicles in the third quarter, an increase of 56% compared with the year-
earlier  period. Deliveries in Asia continued to develop  favorably  and
increased by 53% to 2,210 trucks.

Compared  with the preceding year, deliveries of Volvo trucks  increased
by  21% in the third quarter, or 16,944 (14,060) in units. Deliveries in
Western  Europe were unchanged, while Eastern Europe deliveries were  up
29%. North America and Asia deliveries rose 51% and 60%, respectively.

Deliveries  of  Renault  trucks in the third quarter  increased  by  11%
compared  with the same period last year. For the first nine  months  of
2002,  46,507 trucks have been delivered of which 32,055 in  the  medium
and heavy range.

Mack  Trucks delivered a total of 6,926 trucks in the third quarter,  up
46% from the same period in 2001.

Order situation
Order  bookings  for the Group has remained at a high level  during  the
third quarter. In Europe total order bookings for Renault and Volvo  was
stable  at  a  high  level through September. Order bookings  for  Volvo
trucks  in  North America increased by 10% for the first nine months  of
2002.

Several  of Volvo Trucks' markets in Asia, the Middle East and  the  Far
East continued to show a positive trend, with order bookings rising 37%,
45% and 28% for the first nine months respectively.

In  North America, the order backlog for Mack and Volvo decreased by 39%
and 12% respectively.

Market shares
The combined market share in Western Europe for the truck operations  of
the  Volvo Group was 27.3% for heavy trucks, up to August compared  with
the year earlier period.

Volvo  Trucks  is  second  in Europe for trucks  over  16  tons,  behind
Mercedes.  For the period through August, Volvo's market share  declined
to  13.8%  (14.7%).  The decline is due to lower deliveries  during  the
production  ramp  up of the Volvo FH/FM trucks in the beginning  of  the
year.  Increased  deliveries during the second  half  of  the  year  are
expected  to generate a positive effect on the market share at year-end.
Renault  Trucks'  share  of  the heavy truck market  in  Western  Europe
increased  to 13.5% (12.4). Renault Trucks' cumulative market share  for
Europe  in the first eight months 2002 was 13% on vehicles over 6  tons,
up  1.1%, ranking third. The gain is largely attributable to France  and
Spain.

In  North  America, the combined market share in class 8 through  August
fell  to 21.6% (24.5), of which Mack Trucks represented 13.5 (14.1)  and
Volvo Trucks represented 8.0 (10.3) respectively.

In  Brazil,  Volvo is the market leader in the heavy-duty vehicle  class
and its share of the market increased to 32.5% through September.

Financial performance
Net  sales for the third quarter amounted to SEK 28,507 M, compared with
SEK 25,611 M in the year-earlier period, an increase of 18% adjusted for
currency effects. Operating income for the third quarter was SEK 673  M,
compared with an operating loss of SEK 340 M in the year-earlier period.
Earnings  improved on all markets in the third quarter. The  improvement
was  largely  related to increased truck deliveries,  improved  capacity
utilization,  prize  realization and to  a  positive  contribution  from
synergies.

New products
The  new generation Volvo VN, which is designed to meet the new and more
rigorous  EPA  02  emission legislation that  came  into  force  at  the
beginning  of Q4 2002, was introduced in North America during the  third
quarter.  The new Volvo VN was very well received by customers,  dealers
and  the media. To date more than 3,000 orders have been placed for  the
new Volvo VN.

In   September  Renault  Trucks  launched  its  new  automatic  gearbox,
Optidriver, at the IAA in Hanover. Renault Trucks also announced an  EUR
30 M investment in the Blainville plant for a new cataphoresis. The more
modern installation will help to increase the capacity of the plant.

Buses

Net sales by market area   Third     First             Change
                          quarter nine months
SEK M                       2002  2001    2002   2001    in %
Europe                     1 293 1 531   5 034  4 639      +9
North America                975 1 676   2 915  5 863    (50)
South America                 56   140     252    584    (57)
Asia                         431   507   1 397  1 184     +18
Other markets                121   147     585    361     +62
Total                      2 876 4 001  10 183 12 631    (19)

Total market
The  coach market in the US and Canada is on a very low level,  enhanced
by  the  uncertainty  in the tourism industry. The traditionally  strong
Volvo  markets  in  Europe, such as UK and the  Nordic  countries,  have
increased  slightly  this  year but have  been  largely  offset  by  the
developments in Continental Europe, mainly in Germany, Italy and France.
Germany, the leading bus and coach market in Europe, has declined nearly
30  percent. South America showed a significant drop attributable to the
unstable  situation in the region. The markets in Asia Pacific in  which
Volvo Buses is active show a more stable growth.

Order situation
In the third quarter, Volvo was awarded an order for 500 city buses to a
major operator in Shanghai. Volvo has a strong order book in Mexico  due
to  the  orders  received  in the second quarter  of  luxury  inter-city
coaches  to  two of the most important operators in the Mexican  market.
The  deliveries are now starting up. Nova in St Eustache, Canada  gained
already  last year a major city bus order to the Province of Quebec,  of
which deliveries will start during 2003. The favorable developments were
offset  by  fewer orders received in the Middle East, South America  and
the US.

Deliveries
Volvo  delivered 6,307 (7,162) buses and coaches during the  first  nine
months  of  2002.  During the third quarter the  deliveries  were  1,894
(2,318).  The  decline  was mainly attributable to  significantly  lower
volumes  in Mexico and less coaches sold in Europe which was  offset  to
some extent by advantageous volumes in China, Middle East and the Nordic
Countries.  During  the first nine months, 37% of  the  deliveries  were
complete  buses  compared  with 49% in the  preceding  year.  The  lower
percentage  is  largely due to the North American joint  ventures  being
consolidated by the proportional method as of October 1, 2001.

Market shares
Volvo  increased its market shares in Europe as a result of a  favorable
development  in  the traditionally strong Volvo markets  in  the  Nordic
countries  and  the UK and low volumes in the central European  markets.
Given the present market situation, price competition is fierce, but  it
is  Volvo's  intention  to  avoid unprofitable business.  This  affected
market  share negatively in the US, Continental Europe and significantly
in  Brazil.  Positive  development was noted  for  Volvo  in  China  and
Southeast Asia.

Financial performance
Net  sales  reached SEK 10,183 M (12,631) during the first nine  months.
For  the  third quarter, net sales amounted to SEK 2,876  M  (4,001),  a
decline  of  10% adjusted for currency effects and the effect  from  the
proportionate  consolidation of Nova/Prévost. The  decrease  was  mainly
attributable to significantly lower volumes in Mexico as well  as  fewer
coaches sold in Europe. Operating loss in the third quarter amounted  to
SEK  84  M  (185). The year-to-date operating loss was SEK 127 M  (loss:
293).  The improvements compared with the year-earlier period  is  to  a
large  extent  due  to the turn-around activities in North  America  and
Europe which were offset by the lower volumes in Mexico and Europe.

In focus
Volvo Buses is about to conclude the exit of the US city bus market. The
last  buses in the Nova operations in Roswell are completed and will  be
delivered within short. The operations in Schenectady for deliveries  of
the low-floor concept from Canada to the US were closed during the third
quarter.  Efforts  are under way to increase productivity  of  Buses  in
Europe by improving the production efficiency, reducing the product cost
and  securing  a  high  level of quality. The complete  and  competitive
product range provides the base for this progressive development.

Volvo Buses marked a major break through in Shanghai with the order  for
500  buses.  The  operator  has an option for  an  additional  500.  The
contract  is  a  follow up of the successful 200 buses delivered  during
2001 by the newly set up city bus joint venture to several operators  in
the  city  of Shanghai. The annual volume of Volvo buses and coaches  to
China is approximately 1,000 which equals a market share close to 10% in
the segment of heavy buses.

Construction Equipment

Net sales by market area   Third     First             Change
                          quarter nine months
SEK M                       2002   2001   2002    2001   in %
Europe                     2 634  2 624  7 917   8 163    (3)
North America              1 444  1 824  4 605   4 876    (6)
South America                161    179    508     647   (21)
Asia                         689    572  2 197   1 978    +11
Other markets                133    189    498     479     +4
Total                      5 061  5 388 15 725  16 143    (3)

Total market
The  total  combined  world  market for heavy and  compact  construction
equipment,  within  Volvo CE's product range, was unchanged  during  the
third  quarter  compared with the corresponding period in the  preceding
year.  In  North America, the total market declined 9%. In  Europe,  the
decrease was 4%, while the international markets were up 9%.

The market for heavy construction equipment increased 3% compared with a
year  earlier. The North American market was down 5% and, Europe by  6%,
while international markets were up 15%.

The  total market for compact equipment, declined by about 2% during the
quarter. The North American market was down 12%, Europe by 3%, while the
international markets rose 4%.

For the first nine months the combined total market was down 5%, with  a
decrease  in  North  America  of  13%  and  in  Europe  9%,  while   the
international  markets  were  up 4%. The positive  developments  in  the
international markets this year is led by China, up 69%, followed by the
rest of Asia excluding, Japan and China, an increase of 37%, Oceania  up
35% and Eastern Europe a rise of 35%.

Market share
Compared with the third quarter 2001, Volvo CE was able to increase  its
share of the market in several important geographical and product areas,
mainly due to recently launched products backed by a strong brand name.

Order situation
The  value  of  the order book as of September 30 was approximately  40%
higher  than  on  the same date in 2001. Compared with the  end  of  the
second  quarter  this year, the value of the order book was  10%  lower,
however, still historically strong.

Financial performance
Volvo  CE's net sales declined to SEK 5,061 M (5,388) during  the  third
quarter.  Sales declined in most markets with the exception of Asia  and
Eastern Europe. Operating income during the quarter amounted to SEK  120
M  (266). The decrease in sales and operating income was due to the weak
markets  in  Western  Europe and North America combined  with  continued
price  pressure  in  North  America and  to  costs  related  to  product
introductions. Operating margin for the quarter was 2.4% (4.9).

New products
During  the  third  quarter, Volvo CE launched  two  new  compact  wheel
loaders, the L20B and the L25B, equipped with new powertrains, new  cabs
and  a distinct Volvo design. They have been engineered to be user-  and
maintenance  friendly  and  they  are  specially  targeted   to   rental
customers.

The  production  of  the new backhoe loader started in  the  factory  in
Wroclaw, Poland. Volvo CE has invested around USD 5 M in the new  state-
of-the-art production facility that has capacity to meet any foreseeable
customer  demands. The first backhoe loaders have already been delivered
to customers.

Volvo  CE's rental initiative is developing according to plan. To  date,
30 stores have been opened, most of them in North America. Volvo CE will
have opened some 50 rental stores before the end of the year.

Volvo Penta

Net sales by market area   Third     First            Change
                          quarter nine months
SEK M                       2002   2001   2002   2001   in %
Europe                       873    854  3 078  2 857     +8
North America                568    551  1 808  1 683     +7
South America                 19     64     82    142   (42)
Asia                         232    258    848    682    +24
Other markets                 43     47    130    122     +7
Total                      1 735  1 774  5 946  5 486     +8

Total market
The world market for marine and industrial engines continued to decline,
due  to the weak world economy. Nonetheless, total demand in Europe  for
marine  engines remained relatively stable during the first nine months,
although  slightly  lower  than in the year-earlier  period.  The  total
market  for industrial engines declined in Europe and in South  America.
The  decline  in the total US market for marine engines, which  weakened
sharply during 2001 has continued this year, although at a slower  pace.
The  total market for industrial engines in China remained strong, while
the very weak market trend in Japan remained unchanged.

Market share
New  and competitive products enabled Volvo Penta to continue increasing
its  global  market shares in the marine and industrial engine  markets.
For  a long period of time, Volvo Penta has succeeded in offsetting  the
total  market decline by increasing its market shares and its  sales.  A
number  of  new orders for marine engines received during the period  in
Europe  and  North America enhanced Volvo Penta's position  among  major
boat builders. A new large-scale order from Saudi Arabia for a total  of
900  industrial engines confirmed Volvo Penta's strong position in  this
segment of the market.

Order situation
The  order situation for leisure-boat and marine-commercial engines  was
relatively stable during the period. Volvo Penta's order bookings within
these  segments  remained at approximately the  same  level  as  a  year
earlier.  Although a distinct decline was noted in orders  received  for
industrial  engines,  due  to the downturn in the  total  market,  Volvo
Penta's combined order bookings during the first nine months remained at
a historically high level.

Financial performance
Volvo  Penta's total sales during the first nine months of 2002 rose  8%
and  amounted to SEK 5,946 M (5,486), distributed as follows by business
segment: Marine Leisure: SEK 3,694 M (3,409); Marine Commercial: SEK 724
M  (634)  and  Industrial:  SEK 1,528 M (1,443).  As  a  result  of  the
continued  downturn  in the market, partly offset by  increasing  market
shares,  total  net  sales during the third quarter decreased  from  SEK
1,774 M in 2001 to SEK 1,735 M in 2002.

Volvo  Penta's strong earnings trend continued during the third quarter.
Unfavorable exchange rates and pension costs related to the  deficit  in
the  Swedish pension foundation had an adverse impact on earnings during
the  first  three  quarters  of  the year.  Nonetheless,  Volvo  Penta's
operating income during the third quarter amounted to SEK 117 M (141).

Product news
During  the third quarter, Volvo Penta became the first company  in  the
marine-engine industry to launch telematic services. While  the  initial
stage  of the launch was directed at North American boat builders,  this
product  will  also  be gradually launched globally.  During  the  first
phase, the telematic services, which have already generated considerable
interest  in  the US, are aimed primarily at services that increase  the
security  of  boat ownership, although the field of application  can  be
broadened.

The  phasing-in  of  Volvo Penta's new product  program  in  the  Marine
Commercial  business  segment - which has been  broadened  downwards  in
power  classes  through  the launch of new five and  seven-liter  diesel
engines - continued during the quarter. The new engines operate  at  low
revolutions  and  are particularly suitable for various  types  of  non-
planing boats used for marine commercial purposes.

Volvo Aero

Net sales by market area   Third     First            Change
                          quarter nine months
SEK M                       2002  2001    2002  2001    in %
Europe                       781   975   2 730 3 387    (19)
North America                987 1 695   3 447 4 536    (24)
South America                 34    48     129   136     (5)
Asia                         145   252     396   500    (21)
Other markets                 14    24      82   102    (20)
Total                      1 961 2 994   6 784 8 661    (22)

Total market
The  recovery  in  air traffic noted at the beginning of  the  year  has
stagnated. Traffic development remains negative in the US and Europe. In
July, traffic in the US fell 8.4% and in Europe by 11.3%. Moreover, this
was  the eleventh consecutive month with declining passenger figures  in
these markets.

Worldwide, the total decline in air traffic was 7.1% during the January-
July period, compared with the year-earlier period.

Many  of  the  large American airlines are in very difficult  positions,
with major losses. The large European carriers are also affected. The so-
called discount carriers are capturing market share and capitalizing  on
the  possibility  to  purchase  new  aircraft  at  low  prices.  A  weak
improvement  was noted in the airfreight segment, which accounts  for  a
relatively small portion of air traffic.

As  expected, the number of deliveries as well as the volume  of  orders
declined  compared  with  last year. The  number  of  orders  for  large
commercial jets declined 38% during the first eight months of  the  year
and  the  delivery  level by 17%. The order backlog  amounted  to  2,742
aircraft  in  August, corresponding to a decline of 190  since  year-end
2001.   The general opinion is a continued decline in deliveries of  new
aircraft for several years.

The  industrial  capacity  in the aviation industry  is  aligned  to  an
average  annual growth rate in air traffic of about 5%.   The  imbalance
between supply and demand is creating the worst crisis in the history of
the  aviation  industry and there is still no sign of  growth,  compared
with the levels that prevailed prior to September 11, 2001.

Order situation
As  an effect of the aviation industry crisis, the orders for components
for   new   aircraft   engines  declined  sharply  compared   with   the
corresponding  period  a  year earlier. During the  third  quarter,  the
decline impacted on production with full force for the first time,  with
personnel reductions being carried out at the plants in Trollhättan  and
Kongsberg. An upturn for component production is not expected until some
time  during  the second half of 2004 or beginning of 2005. Reduced  air
travel has also affected the spare parts market substantially as well as
engine overhaul requirements. It is expected that the spare parts market
for  Volvo  Aero will turn weakly upward at the end of the  year,  while
order  bookings  for engine overhauls are forecasted to increase  during
2003.

Financial performance
As  a  result of the decline in the aviation industry, net sales in  the
third  quarter fell to SEK 1,961 M (2,994), with all business  units  in
Volvo Aero noting a decline.

The  aftersales  market with engine overhauls and spare parts  sales  is
still  heavily burdened by the decline, although a certain recovery  was
noted  for  spare  parts  sales  in the third  quarter  for  Volvo  Aero
Services.

The  profits  reported within Aerospace Components and Military  Engines
were insufficient to offset the decline in the other operations of Volvo
Aero.

Operating  income  declined during the period to a  loss  of  SEK  72  M
(income:  118)  and the operating margin was a negative 3.7%  (positive:
3.9). A contributing factor to the lower result is costs related to  the
deficit  in  the Swedish pension foundation, due to the decline  on  the
stock market.

New orders
In  the  overhaul segment, the company is working intensively to  secure
orders  in  a continued weakening market. During the period, Volvo  Aero
Engine Services in Bromma has signed two new overhaul contracts for JT9D
engines  with  the  Centurion  Air  Cargo  freight  carrier  and  Sabena
Technics.  Both  contracts  are  one-year  agreements  with  a   rolling
extension of one year at a time.

Financial Services
New financing
Retail  volume during the first nine months was SEK 19.1 billion,  which
was  SEK 4.0 billion higher than in the corresponding period last  year.
Renault  Trucks  and  Mack  Trucks  financing  added  SEK  4.2  billion.
Financing  related  to  Construction Equipment,  Buses  and  Volvo  Aero
increased  by  SEK  0.5  billion while Volvo  Trucks  related  financing
decreased  by  SEK 0.7 billion. In the markets where financial  services
are  offered,  the average year-to-date penetration was  29%  for  Volvo
Trucks,  26%  for Volvo Buses, 21% for Construction Equipment,  11%  for
Renault  Trucks  and 11% for Mack Trucks. Expressed as an  average,  VFS
financed  approximately  19% of the units  sold  in  the  markets  where
financing is offered.

Total assets
Total  assets  as of September 30, 2002 amounted to SEK 69  billion,  of
which  SEK  61  billion was in the credit portfolio.  Adjusted  for  the
effects of year-to-date foreign exchange movements, the credit portfolio
increased by 5%. Financing in the credit portfolio was related to  Volvo
Trucks  (59%), Construction Equipment (16%), Buses (14%), Renault Trucks
(5%)  and Mack Trucks (4%). The remaining 2% are mainly related to Volvo
Aero and Volvo Penta.

Financial performance
Year  to  date  operating income amounts to SEK 361 M  (245).  Operating
income  for  the third quarter amounted to SEK 126 M (69) compared  with
SEK  120  M  (63)  for the second quarter and 115 (113)  for  the  first
quarter 2002.

Write-offs  during the first nine months amounted to SEK  616  M  (627),
which  included 146 (0) of write-offs related to the liquidation of  the
judicial portfolio in Latin America that was fully provided for in prior
periods.  The  write-off ratio during the first nine  months  was  1.28%
(1.28).   Excluding  write-offs  on  the  old  Latin  American  judicial
portfolio,  the  write-off ratio was 0.98% for the  first  nine  months,
which  is  showing  an improving trend. At the end of  September,  total
credit  reserves amounted to 2.7% of the credit portfolio compared  with
2.9% at the end of 2001.

During the third quarter, VFS continued to develop the financial product
offering  for  the  Volvo  Group,  including  establishing  a  financial
operation  in  Austria and also through developing a financial  offering
for  Volvo  Construction Equipment in Germany. The increased volume  and
strengthening relationship with the two new business areas  Renault  and
Mack Trucks continues to be a positive development for VFS, contributing
23%  of  the  retail volume during the first nine months  of  2002.  The
benefits  are  both development toward a more diversified portfolio  and
the potential synergies that can be achieved through the utilization  of
a  common  back-office  while keeping a focus on separate  branding  and
sales  channel  development as Volvo Financial Services, Renault  Trucks
Finance and Mack Commercial Finance.

Number of employees
As of September 30, 2002, the Volvo Group had 71,768 employees, compared
with  70,921 at the end of 2001. The increase is mainly due to increased
production within Volvo Trucks.

Göteborg, October 24, 2002

AB Volvo (publ)

Leif Johansson


This report has not been reviewed by AB Volvo's auditors.

Volvo's report on operations 2002 is to be published on February 7, 2003
and will be available at www.volvo.com. The report can also be ordered
from Celero Support AB, DDC, Dep 64620 ARUN, SE-405 08 Göteborg, Sweden.
Telephone: +46 31-66 10 47. Fax: +46 31-66 20 20. E-mail:
[email protected]


Quarterly figures,                                                   
Volvo Group                                                          
SEK M unless             3/2001    4/2001   1/2002    2/2002   3/2002
otherwise specified
Net sales                41 134    48 633   40 385    49 294   41 524
Cost of sales          (34 033)  (40 321) (33 205)  (40 560) (34 090)
Gross income              7 101     8 312    7 180     8 734    7 434
Research and            (1 279)   (1 361)  (1 505)   (1 373)  (1 335)
development expenses
Selling expenses        (3 444)   (4 242)  (3 797)   (3 787)  (3 612)
Administrative          (1 525)   (1 514)  (1 277)   (1 455)  (1 474)
expenses
Other operating         (1 063)     (497)  (1 094)     (958)    (378)
income and expenses
Income from Financial        69        80      115       120      126
Services*
          Income from      (43)         9       16      (47)       59
       investments in
 associated companies
Income from other          (28)      (14)        0       325      (3)
investments
Restructuring costs     (1 406)   (1 137)        -         -        -
Operating income        (1 618)     (364)    (362)     1 559      817
Interest income and         466       388      266       313      308
similar credits
Interest expenses and     (690)     (629)    (514)     (500)    (428)
similar charges
Other financial            (38)        58      (8)      (62)    (113)
income and expenses
Income after            (1 880)     (547)    (618)     1 310      584
financial items
Taxes                       316        53    (118)     (212)    (158)
Minority interests           29         7     (10)      (18)      (5)
Net income              (1 535)     (487)    (746)     1 080      421
                                                                     
     Depreciation and                                                
amortization included
                above
Volvo Group excl          1 907     1 216    1 950     2 184    1 960
Financial Services
Financial Services          834       691      783       708      712
Total                     2 741     1 907    2 733     2 892    2 672
                                                                     
Income per share, SEK    (3.60)    (1.20)   (1.80)      2.60     1.00
Average number of         419.4     419.4    419.4     419.4    419.4
shares, million
 * Financial Services                                                
          reported in
  accordance with the
       equity method.
 Income per  share is
    calculated as net
income divided by the
     weighted average
     number of shares
   outstanding during
          the period.
                                                                     
                                                                     
                                                                     
                                                                     
Key operating ratios                                                 
%                        3/2001    4/2001   1/2002    2/2002   3/2002
Gross margin               17.3      17.1     17.8      17.7     17.9
         Research and       3.1       2.8      3.7       2.8      3.2
 development expenses
    in % of net sales
Selling expenses in %       8.4       8.7      9.4       7.7      8.7
of net sales
       Administrative       3.7       3.1      3.2       3.0      3.5
 expenses in % of net
                sales
Operating margin          (3.9)     (0.7)    (0.9)       3.2      2.0
Operating margin excl     (0.5)       1.6    (0.9)       3.2      2.0
  restructuring costs



                                                                
Net sales                                                    
SEK M                   3/2001   4/2001  1/2002   2/2002  3/2002
Trucks                  25 611   32 580  26 558   32 554  28 507
Buses                    4 001    4 044   3 165    4 142   2 876
Construction             5 388    4 992   4 476    6 188   5 061
Equipment
Volvo Penta              1 774    1 894   1 962    2 249   1 735
Volvo Aero               2 994    3 123   2 485    2 338   1 961
Other                    1 366    2 000   1 739    1 823   1 384
Net sales               41 134   48 633  40 385   49 294  41 524
                                                                
                                                                
                                                                
Operating income                                             
SEK M                   3/2001   4/2001  1/2002   2/2002  3/2002
Trucks                   (340)      591   (474)      483     673
Buses                    (185)    (231)    (94)       51    (84)
Construction               266      136   (131)      464     120
Equipment
Volvo Penta                141      128     146      225     117
Volvo Aero                 118       89      78       40    (72)
Financial Services          69       80     115      120     126
Other                    (281)     (20)     (2)      176    (63)
Operating income*        (212)      773   (362)    1 559     817
Restructuring costs    (1 406)  (1 137)       -        -       -
Operating income       (1 618)    (364)   (362)    1 559     817
* excluding                                                     
restructuring costs
                                                                
                                                                
Operating margins                                            
%                       3/2001   4/2001  1/2002   2/2002  3/2002
Trucks                   (1.3)      1.8   (1.8)      1.5     2.4
Buses                    (4.6)    (5.7)   (3.0)      1.2   (2.9)
Construction               4.9      2.7   (2.9)      7.5     2.4
Equipment
Volvo Penta                7.9      6.8     7.4     10.0     6.7
Volvo Aero                 3.9      2.8     3.1      1.7   (3.7)
Operating margin*        (0.5)      1.6   (0.9)      3.2     2.0
Operating margin         (3.9)    (0.7)   (0.9)      3.2     2.0

Accounting principles
In  preparing  this report, Volvo has applied the accounting  principles
presented in Note 1, page 57, of the Volvo 2001 Annual Report.

This   report   contains   forward-looking   statements   that   reflect
management's  current views with respect to certain  future  events  and
potential financial performance.  Although the Company believes that the
expectations   reflected   in  such  forward  looking   statements   are
reasonable, no assurance can be given that such expectations will  prove
to have been correct.  Accordingly, results could differ materially from
those  set  out in the forward looking statements as a result of,  among
other   factors,  (i)  changes  in  economic,  market  and   competitive
conditions,  (ii)  success of business and operating initiatives,  (iii)
changes in the regulatory environment and other government actions, (iv)
fluctuations in exchange rates and (v) business risk management.

This  report  does not imply that the company has undertaken  to  revise
these  forward-looking  statements, beyond what is  required  under  the
company's  registration contract with the OM Stockholm Exchange  if  and
when  circumstances arise that will lead to changes compared to the date
when these statements were provided.

Units invoiced                  Third   Third    First    First   Change
Trucks                        quarter quarter     nine     nine     in %
                                 2002    2001   months   months
                                                  2002     2001
Europe                         20,338  18,993   68,086   70,979      (4)
   Western Europe              18,212  17,550   62,135   66,057      (6)
   Eastern Europe
   Eastern Europe               2,126   1,443    5,951    4,922       21
North America                  11,043   7,084   29,077   26,982        8
South America                   1,423   1,420    3,952    4,406     (10)
Asia                            2,210   1,449    6,184    3,955       56
Other markets                   2,501   2,196    7,319    6,904        6
Total, Trucks                  37,515  31,142  114,618  113,226        1
                                                                        
Mack Trucks                     Third   Third    First    First   Change
                              quarter quarter     nine     nine     in %
                                 2002    2001   months   months
                                                  2002     2001
North America                   6,513   4,091   17,543   16,625        6
South America                     133     340      467      925     (50)
Asia                                6      24       10       32     (69)
Other markets                     274     281      715      688        4
Total                           6,926   4,736   18,735   18,270        3
                                                                        
Renault Trucks                  Third   Third    First    First   Change
                              quarter quarter     nine     nine     in %
                                 2002    2001   months   months
                                                  2002     2001
Europe                         11,891  10,859   41,651   40,836        2
   Western Europe              11,003  10,382   39,092   39,011        0
   Eastern Europe                 888     477    2,559    1,825       40
Asia                              134     129      272      405     (33)
Other markets                   1,620   1,358    4,584    4,561        0
Total                          13,645  12,346   46,507   45,802        2
                                                                        
Volvo Trucks                    Third   Third    First    First   Change
                              quarter quarter     nine     nine     in %
                                 2002    2001   months   months
                                                  2002     2001
Europe                          8,446   8,131   26,434   30,140     (12)
   Western Europe               7,208   7,168   23,042   27,046     (15)
   Eastern Europe               1,238     963    3,392    3,094       10
North America                   4,530   2,993   11,534   10,357       11
South America                   1,290   1,080    3,485    3,481        0
Asia                            2,070   1,296    5,902    3,518       68
Other markets                     608     560    2,021    1,658       22
Total                          16,944  14,060   49,376   49,154        0
                                                                        
Units invoiced, buses/bus       Third   Third    First    First   Change
chassies                      quarter quarter     nine     nine     in %
                                 2002    2001   months   months
                                                  2002     2001
Europe                            560     707    2,310    2,261      2.2
   Western Europe                 522     638    2,122    2,141    (0.9)
   Eastern Europe                  38      69      188      120     56.7
North America                     460     781    1,440    2,680   (46.3)
South America                     138     206      348      789   (55.6)
Asia                              662     532    1,750    1,147     52.6
Other markets                      74      92      459      285     61.1
Total, buses/bus chassis        1,894   2,318    6,307    7,162   (11.9)

                                                                                                                                                     

a d v e r t i s e m e n t