New Volvo Company in Russia

Volvo is establishing a new company in Russia. Named ZAO Volvo Vostok, the new company will have coordination responsibility for Volvo's entire operations in the Russian market. Volvo will also establish a new joint Group office building for Volvo in Russia. The building, located in Moscow, will house all Volvo companies' operations in the Russian market, including dealer functions, training facilities, warehousing and display areas. Russia and other markets in Eastern Europe are a region with major growth potential. Volvo's ambition is to attain a strong market position in the region through successively expanding the service and dealer network as well as local manufacturing. Later this year, bodies will be added to Volvo bus chassis in Omsk, Russia, and the ambition is to establish a further industrial presence in Russia in the years immediately ahead. The value of Volvo's sales in Central and Eastern Europe (including Russia) totaled approximately SEK 3.6 billion in 1997. Volvo's goals in the near future is to increase sales in the region to a total of about SEK 15 billion. June 30, 1998