The second quarter

Investment in Indian facility for production of excavators
As part of Volvo Construction Equipment’s (Volvo CE) objective of supporting customers in the growing BRIC (Brazil, Russia, India and China) markets, Volvo CE has announced a strategic investment in its existing facility in Bangalore, India. The investment, which totals around SEK 144 M, will allow Volvo CE to produce medium-sized excavators at the plant. These machines will primarily be models for use in the Indian market. Production of the first machines is expected to start by the end of 2011.

Production of new medium-duty engine in India
The Volvo Group’s Indian joint venture company, VE Commercial Vehicles (VECV) is to invest a total of SEK 480 M in the production of the Group’s new global medium-duty engine in India. The investment gives the Volvo Group a complete facility in India for machining and assembling the new medium-duty engine, which will be introduced in the Group’s trucks and buses worldwide in the next few years. Through this investment, it will be possible for the Volvo Group to locate most of its production of medium-duty engines to VECV’s plant in Pithampur, India.

Sale of Volvo Aero's US service business
In July it was announced that Volvo Aero had signed an agreement to sell its US subsidiary Volvo Aero Services. The sale had a negative impact of SEK 538 M on Volvo Aero’s operating income in 2010. The sale of Volvo Aero Services is due to Volvo Aero’s strategy of focusing on its core operations of developing and manufacturing components for aircraft engines, combined with the goal of reducing the company’s tied-up capital.