GOTEBORG, Sweden, Sept. 15, 2004 (PRIMEZONE) -- In accordance with an earlier signed Memorandum of Understanding, Volvo and ArvinMeritor have now signed a Strategic Alliance Agreement for the supply of axles. ArvinMeritor will be responsible for the manufacturing and supply of driven and non-driven axles for the Volvo Group's European truck and bus products.
The powertrain strategy of the Volvo Group includes a consolidation of its global range of truck and bus axles. The Strategic Axle Alliance with ArvinMeritor is an important tool for implementation of the global strategy and meeting related business objectives. The agreement accomplished September 14 covers Europe and International markets. An agreement entered already 2002 covers the North American market.
As a consequence of the Strategic Alliance Agreement for Europe and International markets, the Volvo Group's axle plant in St Priest and its foundry in Venissieux, specialized in axle housings, will be structured into two joint ventures. ArvinMeritor will acquire the majority ownership of these joint ventures, which will be operational by the end of this year. As a result of the above transaction the St. Priest axle plant will become an important part of the Industrial Structure of the world's leading manufacturer of axles for heavy-duty vehicles. The Venissieux foundry will get complementary volumes of axle housings. This will improve the prospects of long-term development and sustainability for both operations.
The manufacturing of non-driven axles at Volvo's transmission plant in Koping will be transferred to the Joint Venture in St Priest and to ArvinMeritors plant in Lindesberg, including the related tools and equipment. This will allow Koping to concentrate on its core business and expand into a global supplier of heavy-duty transmissions for the Volvo Group's Business Areas.
In 1998 Volvo outsourced driven axles and divested its axle operations in Lindesberg, Sweden, to ArvinMeritor. In that respect the Strategic Alliance is a logical extension of an already successful business model. It will both free resources and result in substantial cost savings for the Volvo Group.
The agreement is conditioned to approval by the European Commission's Competition Authority.
September 15, 2004
For further information, please contact: Volvo Group Headquarter: Marten Wikforss, +46 31 66 11 27, +46 705 59 11 49 Renault Trucks: Bernard Lancelot, +33 664 404047
The Volvo Group is one of the world's leading manufacturers of trucks, buses and construction equipment, drive systems for marine and industrial applications, aerospace components and services. The Group also provides complete solutions for financing and service. The Volvo Group, which employs about 76,000 people, has production facilities in 25 countries and sells their products in more than 185 markets. Annual sales of the Volvo Group amount to 18 billion euro. The Volvo Group is a publicly-held company headquartered in Goteborg, Sweden. Volvo shares are listed on the stock exchanges in Stockholm, London and Frankfurt and on NASDAQ in the US.
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