AB Volvo and Navistar discontinue negotiations

12/21/2001 9:00 AM EST

AB VOLVO AND NAVISTAR DISCONTINUE NEGOTIATIONS

In May 2001, AB Volvo's business unit Powertrain signed a Letter of
Intent regarding the supply of 12 litre engines to International Truck
and Engine Corporation, a wholly-owned subsidiary of Navistar
International Corporation.

As it has not been possible to fulfil the conditions outlined in the
Letter of Intent, the parties have decided to cease negotiations.

Volvo Powertrain is one of the world's largest manufacturers of heavy-
duty engines, with an annual production of over 125,000 heavy-duty
engines.

December 21, 2001

For further information, please contact

Mårten Wikforss, Director of media relations, AB Volvo
+46 31 66 11 27, +46 705 59 11 49