Volvo Group introduces fourth-generation hybrid solution

Volvo Group introduces fourth-generation hybrid solution

The Volvo Group is now introducing the fourth-generation hybrid solution on a
broad front in buses, trucks and construction equipment.
“Our hybrid solution for heavy vehicles is completely different from anything
that has existed in the market to date,” says Leif Johansson, President and
Chief Executive Officer of Volvo Group. “As a result of our volumes and
resources, we have succeeded in developing a more standardized platform
solution, which is a prerequisite for the hybrid technology's ability to have a
widespread commercial impact in the market for heavy vehicles."


Volvo has been testing various types of hybrid solutions since the 1980s and
Volvo Group unveiled the first commercially viable hybrid solution for heavy
vehicles in March 2006. Volvo's solution is based on a concept known as I-SAM
(Integrated Starter, Alternator Motor). This solution entails that an electric
motor and a diesel engine work in parallel, whereby each of them can be used in
the areas where they are most effective. This increases the capacity compared
with series hybrids, while reducing fuel consumption and improving driving
characteristics - simultaneously.

Fourth generation

“This is what we call the fourth-generation hybrid technology,” says Leif
Johansson. “In a few years' time, hybrid technology will no longer be a special
solution but a technology found in most new city buses and distribution trucks.
The fourth-generation hybrid technology has the potential to make such a
development possible.”

The favorable commercial prospects for the Volvo Group's hybrid technology
derive from the fact that it is based on a platform solution containing a large
number of standard components. The solutions that have existed in the market to
date, and that the Volvo Group itself has been offering, have been based on a
large proportion of special components. This has impeded volume manufacturing
and led to the vehicles becoming much more expensive than the equivalent
standard vehicles. Another advantage generated from an adaptable platform
solution, such as the one that the Volvo Group has access to, is that it can be
used for a variety of different products and applications, which further
increases the volumes and reduces production costs. 

“Volvo believes that the prospects are favorable for developing hybrid
technology for all heavy vehicle segments, everything from buses and
construction equipment to trucks for distribution and long-haul traffic,” adds
the Volvo President and CEO. 

Volvo Trucks 

During the autumn, a number of the Volvo Group's hybrid vehicles will be
displayed at various trade shows, including IAA in Hanover, Germany, between
September 25 and October 2. Volvo Trucks will showcase the world's first heavy
hybrid refuse truck, the Volvo FE Hybrid. The truck, which was premiered in
April this year, is one of two hybrid refuse trucks tested in operation in
Sweden by the Renova and RagnSells refuse collection companies. The use of these
trucks can result in fuel savings of up to 20 percent and a corresponding
decrease in carbon-dioxide emissions. In addition, the hybrid refuse truck is
totally exhaust-free and silent during electrical powering, a factor that is
important for refuse collection vehicles, which often work in densely built-up
areas early in the morning.

Volvo Buses

Within short, Volvo Buses is launching its new hybrid bus, the Volvo 7700
Hybrid, in Europe. Production of the new bus, which is based on the Volvo
Group's hybrid technology, is scheduled to start in 2009. This hybrid technology
provides fuel savings of up to 30%. Volvo Buses will also be carrying out field
trials with six hybrid-powered double-decker buses in London, an investment that
will be of great importance for the future markets for hybrid buses in London.

Volvo Construction Equipment 

Volvo Construction Equipment is also at the leading edge of development in the
field of hybrid technology. At the Conexpo trade show in Las Vegas in March this
year, Volvo Construction Equipment scored a success with its hybrid wheeled
loader, the first of its kind in the world. Up to 10% lower fuel consumption is
one of the advantages this hybrid system can offer in the market for
construction equipment. Volvo Construction Equipment also expects to be able to
develop the hybrid solution and thus further reduce fuel consumption. Deliveries
of hybrid wheeled loaders, the L220F model, are scheduled to begin in 2010, with
some production expected during 2009.

For more information about the Volvo Group's hybrid technology, visit: 
http://www.volvo.com/group/global/en-gb/volvo+group/ourvalues/environment/hybrid
s/hybrid_technology

For images, search for “hybrid” at: http://imagegallery.volvogroup.volvo.se/ 

For video material, watch the story about the world's first heavy hybrid refuse
truck at: 
http://www.volvo.com/group/global/en-gb/volvo+group/videos/group_videos

September 18, 2008

Reporters who want more information, please contact Mårten Wikforss, +46 31 66
11 27 or +46 705 59 11 49

Visit http://www.thenewsmarket.com/volvogroup to access broadcast-standard video
from Volvo Group. You can preview and request video, and choose to receive as a
MPEG2 file or by Beta SP tape. Registration and video is free to the media.

AB Volvo (publ) may be required to disclose the information provided herein
pursuant to the Securities Markets Act. The information was submitted for
publication at 08.30 a.m. September 18, 2008.


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 100,000 people,
has production facilities in 19 countries and sells their products in more than
180 markets. Annual sales of the Volvo Group amount to about SEK 285 billion.
The Volvo Group is a publicly-held company headquartered in Göteborg, Sweden.
Volvo shares are listed on OMX Nordic Exchange Stockholm.