Volvo to develop new 16-liter engine

VOLVO TO DEVELOP NEW 16-LITER ENGINE Volvo is investing SEK 1.4 billion to develop a new 16-liter engine. This is the first step in the consolidation of Volvo's engine program following the acquisition of Renault VI/Mack. A new engine program accounts for a major share of the long-term synergies in the deal. Development of engines is moving toward reduced emissions and higher demands on fuel economy. This places heavy demands on development resources, which in turn requires the largest production and purchasing volumes possible over which to distribute costs. As a result of the acquisition of Renault VI/Mack, the Volvo Group doubled its total volume of diesel engines to about 200,000 units annually, making Volvo one of the world's largest manufacturer of heavy diesel engines. The Volvo Group's consolidated engine program will account for more than half of the synergy effects of the Renault VI/Mack deal, calculated at SEK 3.5 billion annually from and including 2003. "The acquisition of Renault VI and Mack provides us the necessary volume and base of expertise to develop a proprietary 16-liter diesel engine and manufacture it in-house," says Volvo CEO Leif Johansson. "With new technology, the new engine will meet all currently known emission legislation." The new 16-liter engine will be offered to Volvo's various business areas for trucks, buses, construction equipment as well as marine and industrial engines. The engine is well-suited for mainly heavy transports. for example, timber carriers, heavy construction equipment, heavy-duty industrial engines for operating generators or pumps and for marine applications. The new engine is being developed and will be manufactured by Volvo Powertrain, the unit within Volvo responsible for supplying diesel engines, gearboxes, rear axles and driveline systems to Volvo's business areas. "The 16-liter engine is Volvo's first joint engine project following the acquisition of Renault VI/Mack," comments Lars-Göran Moberg, head of Volvo Powertrain. "The development team will comprise engineers from all development departments. "The 16-liter project will serve as a model for the continuing work with Volvo's new engine program. With a platform concept and joint technology as a base, we will develop an entirely new engine program within a 4-5 year period, from 150 hp and above, adapted for all business areas," states Moberg. May 30, 2001 For additional information, contact Jörgen Gustafsson, Volvo Powertrain Corporation, tel +46 31 66 70 97, or +46 708 40 62 87 ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/30/20010530BIT00500/bit0002.doc http://www.bit.se/bitonline/2001/05/30/20010530BIT00500/bit0002.pdf