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Volvo AB (VOL)

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Wednesday 11 December, 2002

Volvo AB

Volvo Articulated Haulers launches program to incr

VOLVO ARTICULATED HAULERS LAUNCHES PROGRAM TO INCREASE PRODUCTIVITY

Volvo Construction Equipment (Volvo CE) has decided to concentrate the
production of its articulated haulers into two plants instead of three
and at the same time, move and integrate the Volvo Articulated Haulers'
head office in Växjö to the plant in Braås, Sweden, during 2003. The
changes will affect around 90 employees in Asheville, USA, and around 70
employees and another 30 consultants in Växjö/Braås.

"The total market of articulated haulers has not developed as we have
expected. This has created an over-capacity, which must be addressed,"
states Stefan Nordström, President of Volvo Articulated Haulers.
Therefore, an extensive program for capacity adjustment and increased
productivity will be introduced.

"After an in-depth analysis, we have come to the conclusion that the
most cost-efficient way is to concentrate production of articulated
haulers in Braås and Pederneiras, Brazil," states Stefan Nordström. The
assembly operations in Asheville will be utilized for final customer
adaptation with the remaining workload gradually phased out during 2003.
As a result, Braås and Pederneiras will have an increase of its assembly
and fabrication operations.

The Company's support in terms of parts and product availability and
service will remain unchanged for the customers in North America.

Moreover, the articulated hauler phase-out in Asheville makes it easier
to free up capacity for the production of the new Volvo skidsteer loader
and telehandler lines. Both of these products are part of the compact
construction equipment product range. "Production of the Volvo skidsteer
loader has already begun in Asheville," said David Million, Vice
President and General Manager, Volvo CE North America, Inc. "Our
manufacturing facility will be Volvo CE's global center for this
product. Present production capacities will be rapidly expanded as we
free up space and we expect to produce over 1,000 skidsteer loaders
during 2003 and even higher volumes during the years to come. The new
Volvo telehandler production for the North American market will begin
during 2003. We want to retain - and retrain - as many employees as
possible from the articulated hauler operation to work with us on these
new products." Volvo CE also produces six models of the Company's
extensive wheel loader line (ten models) in its Asheville facility. This
operation will not be affected by the change in the articulated hauler
operation.

December 11, 2002

For further information, please contact:
Stefan Nordström, President & CEO, Volvo Articulated Haulers,
Tel: +46 470-77 95 00
Klas Magnusson, Senior Vice President Corporate Communications, Volvo
Construction Equipment
Tel: +32 2 482 5065, Mobile: +32 475 576214
                                                                                                                       

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