Volvo and ArvinMeritor plan strategic alliance on axles

Volvo and ArvinMeritor plan strategic alliance on axles Volvo plans to enter into a Strategic Alliance on axles with ArvinMeritor. A Memorandum of Understanding has been signed between the two companies. Final agreements are planned to be made during first quarter 2004. Axles are a high volume component for specialized companies. The Volvo group would take advantage of ArvinMeritor's expertise and leading volume base. In the future ArvinMeritor would be responsible for the manufacturing and supply of driven and non-driven axles for the Volvo Group's European truck and bus products. "Following the acquisition of Renault VI and Mack Trucks in early 2001, immediate efforts have been made to capture identified synergies and cost saving opportunities. In this respect new consolidated product plans for engines, transmissions and axles have been decided and are currently under implementation", says Lars-Göran Moberg, President and CEO of Volvo Powertrain. "In 1998 Volvo Trucks outsourced driven axles and divested its axle operations in Lindesberg, Sweden, to ArvinMeritor. The Strategic Alliance would be a logic extension of an already successful business model. It would both free resources and result in substantial cost savings". The Volvo Group's axle plant in St Priest and its foundry in Vénissieux, which has specialized on axle housings, would be structured into two joint ventures. ArvinMeritor would acquire the majority ownership in these joint ventures. The manufacturing of non-driven axles at Volvos transmission plant in Köping would be outsourced to ArvinMeritor, who also would acquire all related assets. This would enable Köping to concentrate on its core business becoming a Volvo Group Global Supplier of Transmissions. The finalization of the Strategic Alliance is conditioned to approval from concerned competition authorities and fulfilled negotiations/consultations with involved union representatives. ArvinMeritor, Inc. is a premier $7-billion global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. October 27, 2003 For further information, please contact: Media Relations: Mårten Wikforss, +46 31 66 11 27, +46 705 59 11 49 Volvo Powertrain: Jörgen Gustafsson, +46 31 322 28 49, +46 739 022 849 Renault V.I.: Bernard Lancelot, +33 664 404047 ------------------------------------------------------------ This information was brought to you by Waymaker The following files are available for download:

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The Volvo Group is one of the world’s leading manufacturers of trucks, buses, construction equipment and marine and industrial engines. The Group also provides complete solutions for financing and service. The headquarter is located in Gothenburg, Sweden.