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Six months ended June 30, 2008

Final agreement with Indian vehicle manufacturer Eicher Motors

In May, the Volvo Group signed a final agreement with the Indian vehicle manufacturer Eicher Motors covering establishment of a new Indian joint-venture company. As announced previously, the joint venture, with the proposed name VE Commercial Vehicles Ltd. comprises Eicher Motors’ entire truck and bus operations and the Volvo Group’s Indian truck sales operations and service network for trucks and buses. In accordance with the agreement, Eicher Motors transfers its entire truck and bus operations and its components business as well as operations within technical consulting services to VE Commercial Vehicles. Eicher Motors’ production of motorcycles will not be included. Volvo will have direct ownership of 45.6% of the joint-venture company. Volvo is also acquiring 8.1% of Eicher Motors Limited from the majority owner and consequently gains a direct and indirect ownership interest of 50% in VE Commercial Vehicles. The objective is to complete the transaction so that Volvo’s 50% interest in the joint-venture company can be consolidated during the third quarter 2008.

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