Volvo Buses to close Aabenraa plant

Volvo Buses is to close its bodybuilding plant in Aabenraa, Denmark. The
formal decision was taken yesterday 9 December by the board of Aabenraa
Karosseri A/S. In all, about 200 employees will be affected by the
closure.

Volvo Buses has suffered substantial losses in recent years due to a
severe decline in demand in several markets, not least in Denmark.

As a result, Volvo Buses now has significant overcapacity in its
European production plants. In a move to improve its profitability, the
company is presently restructuring its manufacturing organisation by
concentrating the production of finished buses in a smaller number of
plants and using its Polish plant as a high-volume facility.

The Aabenraa plant is expected to close during the second half of 2004.
Although the workforce of approximately 200 will be made redundant,
opportunities of alternative employment at other Volvo plants will be
examined.

Under the plans, buses for the Danish market will continue to be bodied
mainly by Saffle Karosseri AB, which is already producing vehicles for
markets including Denmark.


Worldwide, Volvo Buses has reduced its workforce by about 800 in 2003 to
date.

December 10, 2003


For further information, please contact Christina Fjellman, Vice
President, Corporate Communication, phone: +46-(0)739-02 42 80