Volvo in Ukraine

Volvo in Ukraine: *LETTER OF INTENT ON ORDER FOR 200 TRUCKS *VOLVO RECEIVES ORDER FOR 1,000 INDUSTRIAL ENGINES *VOLVO CONSIDERS LOCAL ASSEMBLY OF BUSES Volvo has received an order for a total of 1,000 industrial engines, and is considering starting a local assembly plant for buses in Ukraine. This was revealed today when the Ukrainian President Leonid Kuchma visited Volvo in Gothenburg. In connection with the visit, a letter of intent was signed about the sale of 200 trucks to Ukraine. Volvo regards Ukraine as a strategically important market with great growth potential. Ukraine is Europe's second largest country in terms of territory, with a population of just over 50 million inhabitants. Volvo's sales on the Ukrainian market have increased during recent years. The total sales increased in 1998 to approximately SEK 300 million. Volvo Trucks Corporation is the company within the Volvo Group which has advanced most in the Ukrainian market. In 1998 Volvo Trucks delivered a total of 350 trucks to Ukraine, and it is anticipated that this year's sales will reach just over 500 trucks. Volvo Trucks is the largest importer of heavy trucks in Ukraine with a share of just over 40 percent of the import market. The letter of intent signed today with the Ukrainian transport company Orlan about the sale of 200 heavy trucks implies that Volvo Trucks advances even further in the Ukrainian market. Volvo Trucks has simultaneously taken a decision to strengthen its presence in Ukraine by investing in Kiev in a central dealership with certain import functions. Volvo Trucks is also building up an effective and well-functioning service and after sales network in other parts of the country. Volvo Penta has received an Ukrainian order for 1,000 diesel industrial engines. The order covers a two-year period and the industrial engines will be used in agricultural machinery for Ukrainian agriculture. The order is a significant breakthrough for Volvo Penta which previously has not made any sales of engines for agricultural machinery in Ukraine. The market for agricultural machines in Ukraine amounts to approximately 10,000 units per year. Volvo Penta is also building up its service network in Ukraine with the aim of strengthening its presence in the country. "The interest for our products is great in Ukraine, and against a background of the growing needs within, among other areas, the transport and construction sectors, I see significant potential for business possibilities for us. The breadth of Volvo's product program is in this respect a very important competitive factor," says Leif Johansson, Volvo's chief executive officer. Volvo Bus Corporation is studying at present the conditions for expanding its activity in the Ukrainian market, by establishing local assembly of buses, among other means. Volvo is in the process of advanced discussions with the city of Zhitomir about the establishment of an assembly plant for Volvo buses, based on the same model that was earlier used for the city of Omsk in Russia. Volvo Buses has also conducted similar discussions with other cities in Ukraine, and it is estimated that a decision about an industrial establishment can come later this year. "There is a big need for renewal of the Ukrainian bus fleet and here Volvo has great possibilities to be a part of and to contribute to the development by being able to offer complete transport solutions. In this respect, we look forward with great confidence to presenting a genuinely interesting and competitive alternative," says Leif Johansson. March 25, 1999 For further information, please contact: Mats Edenborg, AB Volvo Tel:+46 31 59 11 26 +46 708 59 11 26 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/03/25/19990325BIT00020/bit0001.doc http://www.bit.se/bitonline/1999/03/25/19990325BIT00020/bit0002.pdf