OFFERING CIRCULAR

VOLVO CAR AB (PUBL) (a public limited liability company incorporated under the laws of the Kingdom of )

EUR3,000,000,000

Euro Medium Term Note Programme

Guaranteed by

VOLVO CAR CORPORATION (a private limited liability company incorporated under the laws of the Kingdom of Sweden)

Volvo Car AB (publ) (the "Issuer") has established a Euro Medium Term Note Programme (the "Programme") for the issuance of up to EUR3,000,000,000 in aggregate principal amount of notes (the "Notes") guaranteed by Volvo Car Corporation (the "Guarantor"). The maximum aggregate principal amount of all Notes from time to time outstanding under the Programme will not exceed EUR3,000,000,000 (or its equivalent in other currencies calculated as described in the Programme Agreement described herein), subject to increase as described herein.

Application has been made to the Stock Exchange, in its capacity as market operator of the Euro MTF market (the "Euro MTF Market") under the Luxembourg law on prospectuses for securities dated July 10, 2005 (the "Prospectus Act 2005") for the Notes issued under the Programme during the period of twelve months from the date of this Offering Circular to be admitted to trading on the Euro MTF Market and admitted to listing on the Official List of the Luxembourg Stock Exchange. The Euro MTF Market is not a regulated market for the purposes of Directive 2004/39/EC on markets in financial instruments. This Offering Circular is a prospectus for the purposes of the Prospectus Act 2005 and for the purposes of the admission to trading of the Notes on the Euro MTF Market in accordance with the rules and regulations of the Luxembourg Stock Exchange. This document does not constitute a prospectus for the purposes of Article 3 of Directive 2003/71/EC, as amended (the "Prospectus Directive") and relevant implementing measures in Luxembourg, and may not be used for any purpose other than the admission to trading of the Notes on the Euro MTF Market.

The Programme has been rated BB+ by Standard & Poor's Credit Market Services Europe Limited ("Standard & Poor's") and (P)Ba2 by Moody's Deutschland GmbH ("Moody's"). Standard & Poor's and Moody's are established in the European Economic Area (the "EEA") and registered under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation"). Tranches of Notes to be issued under the Programme will be rated or unrated. Where a Tranche (as defined herein) of Notes is to be rated, such rating will not necessarily be the same as the rating assigned to the Programme.

A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.

Investing in Notes issued under the Programme involves certain risks. The principal risk factors that may affect the abilities of the Issuer and Guarantor to fulfil their respective obligations under the Notes are discussed under "Risk Factors" below.

The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and Notes in bearer form are subject to U.S. tax law requirements. The Notes may not be offered, sold or (in the case of Notes in bearer form) delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act ("Regulation S")) except in certain transactions exempt from the registration requirements of the Securities Act.

Arranger CITIGROUP Dealers CITIGROUP DEUTSCHE BANK ING J.P. MORGAN

Offering Circular dated 9 November 2017 CONTENTS

Page

IMPORTANT NOTICES ...... 1 FORWARD-LOOKING STATEMENTS ...... 6 RISK FACTORS ...... 8 INFORMATION INCORPORATED BY REFERENCE ...... 30 GENERAL DESCRIPTION OF THE PROGRAMME ...... 31 PRICING SUPPLEMENTS AND DRAWDOWN OFFERING CIRCULARS ...... 35 FORMS OF THE NOTES ...... 36 OVERVIEW OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM ...... 42 TERMS AND CONDITIONS OF THE NOTES ...... 44 FORM OF PRICING SUPPLEMENT ...... 74 USE OF PROCEEDS ...... 83 BUSINESS ...... 84 TAXATION ...... 103 SUBSCRIPTION AND SALE ...... 106 GENERAL INFORMATION ...... 110

IMPORTANT NOTICES

Responsibility for this Offering Circular

Each of the Issuer and the Guarantor accepts responsibility for the information contained in this Offering Circular and declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Offering Circular is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.

Pricing Supplement/Drawdown Offering Circular

Each Tranche of Notes (as defined below) will be issued on the terms set out herein under "Terms and Conditions of the Notes" (the "Conditions") as supplemented, amended or replaced by a document specific to such Tranche called a Pricing Supplement (a "Pricing Supplement") or in a separate drawdown offering circular specific to such Tranche to be approved by the Luxembourg Stock Exchange (a "Drawdown Offering Circular") as described under "Pricing Supplements and Drawdown Offering Circulars" below.

Other Relevant Information

This Offering Circular must be read and construed together with any supplements hereto, with any information incorporated by reference herein and, in relation to any Tranche of Notes which is the subject of Pricing Supplement, must be read and construed together with the relevant Pricing Supplement. In the case of a Tranche of Notes which is the subject of a Drawdown Offering Circular, each reference in this Offering Circular to information being specified or identified in the relevant Pricing Supplement shall be read and construed as a reference to such information being specified or identified in the relevant Drawdown Offering Circular unless the context requires otherwise.

The Issuer and Guarantor have confirmed to the Dealers named under "Subscription and Sale" below that this Offering Circular contains all information which is (in the context of the Programme, the issue, offering and sale of the Notes and the Guarantee of the Notes (as defined in the Conditions)) material; that such information is true and accurate in all material respects and is not misleading in any material respect; that any opinions, predictions or intentions expressed herein are honestly held or made and are not misleading in any material respect; that this Offering Circular does not omit to state any material fact necessary to make such information, opinions, predictions or intentions (in the context of the Programme, the issue, offering and sale of the Notes and the Guarantee of the Notes) not misleading in any material respect; and that all proper enquiries have been made to verify the foregoing.

In the case of any Notes which are to be offered to the public in a Member State of the European Economic Area (an "EEA Member State") in circumstances which would otherwise require the publication of a prospectus under the Prospectus Directive, the minimum specified denomination shall be EUR100,000 (or its equivalent in any other currency as at the date of issue of the Notes).

Unauthorised Information

No person has been authorised to give any information or to make any representation not contained in or not consistent with this Offering Circular or any other document entered into in relation to the Programme or any information supplied by the Issuer or the Guarantor or such other information as is in the public domain and, if given or made, such information or representation should not be relied upon as having been authorised by the Issuer or any Dealer.

Neither the Dealers nor any of their respective affiliates have authorised the whole or any part of this Offering Circular and none of them makes any representation or warranty or accepts any responsibility as to the accuracy or completeness of the information contained in this Offering Circular. Neither the delivery of this Offering Circular or any Pricing Supplement nor the offering, sale or delivery of any Note shall, in any circumstances, create any implication that the information contained in this Offering Circular is true subsequent to the date hereof or the date upon which this Offering Circular has been most recently supplemented or that there has been no adverse change, or any event reasonably likely to involve any adverse change, in the prospects or financial or trading position of the Issuer or the Guarantor since the date thereof or, if later, the date upon which this Offering Circular has been most recently supplemented or that any other information supplied in connection with the Programme is correct at any time

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subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same.

Restrictions on Distribution

The distribution of this Offering Circular and any Pricing Supplement and the offering, sale and delivery of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Circular or any Pricing Supplement comes are required by the Issuer, the Guarantor and the Dealers to inform themselves about and to observe any such restrictions. For a description of certain restrictions on offers, sales and deliveries of Notes and on the distribution of this Offering Circular or any Pricing Supplement and other offering material relating to the Notes, see "Subscription and Sale". In particular, the Notes have not been, and will not be, registered under the Securities Act and are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or, delivered within the United States or to, or for the account or benefit of, U.S. persons.

Neither this Offering Circular nor any Pricing Supplement constitutes an offer or an invitation to subscribe for or purchase any Notes and should not be considered as a recommendation by the Issuer, the Guarantor, the Dealers or any of them that any recipient of this Offering Circular or any Pricing Supplement should subscribe for or purchase any Notes. Each recipient of this Offering Circular or any Pricing Supplement shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuer and the Guarantor.

Programme Limit

The maximum aggregate principal amount of Notes outstanding at any one time under the Programme will not exceed EUR3,000,000,000 and for this purpose, any Notes denominated in another currency shall be translated into euros at the date of the agreement to issue such Notes (calculated in accordance with the provisions of the Dealer Agreement as defined under "Subscription and Sale"). The maximum aggregate principal amount of Notes which may be outstanding at any one time under the Programme may be increased from time to time, subject to compliance with the relevant provisions of the Dealer Agreement.

Use of Proceeds

None of the Dealers will verify or monitor the proposed use of proceeds of Notes issued under the Programme.

Certain Definitions

In this Offering Circular, unless otherwise specified, references to a "Member State" are references to a Member State of the EEA, references to "U.S.$", "U.S. dollars" or "dollars" are to United States dollars, references to "SEK" are to Swedish Kroner, the lawful currency of the Kingdom of Sweden, references to "EUR" or "euro" are to the currency introduced at the start of the third stage of European economic and monetary union, and as defined in Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro, as amended.

In addition, unless otherwise specified or the context requires otherwise in this Offering Circular:

"China Development Bank Facility" means the facilities agreement dated as of 30 November 2012 (as subsequently amended and restated) between, among others, Volvo Car Corporation as borrower, the Issuer as guarantor and China Development Bank Corporation, Bank of China Limited, Luxembourg Branch, Bank of Communications Co., Ltd., Offshore Banking Unit and Industrial and Commercial Bank of China (Europe) S.A., Sucursal En España as original lenders, China Development Bank Corporation as agent and InterTrust CN (Sweden) AB as security agent;

"Chinese Joint Ventures" means the joint ventures Daqing Volvo Car Manufacturing Co., Ltd, Zhangjiakou Volvo Car Engine Manufacturing Co., Ltd. and Shanghai Volvo Car Research and Development Co., Ltd;

"Group" or "" means the Issuer and its consolidated ;

"EBITDA" means income before income tax, financial income, financial expenses, and depreciation and amortisation for the period presented;

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"" means Zhejiang Geely Holding Group Co. Ltd., a Chinese automotive manufacturing company;

"Guarantor" means Volvo Car Corporation (legal name, Volvo Personvagnar Aktiebolag);

"IFRS" means the International Financial Reporting Standards of the International Accounting Standards Board, as adopted by the European Union;

"Issuer" means Volvo Car AB, as the issuer of the Notes;

"Nordic Investment Bank Loan" means the loan agreement dated 1 September 2016 between, among others, Volvo Car Corporation as borrower, the Issuer as guarantor and Nordic Investment Bank as lender;

"Revolving Credit Facility" means the revolving credit facility dated 22 June 2017 between, among others, the Issuer as borrower and Volvo Car Corporation as guarantor; and

"Term Credit Facility" means the term credit facility dated as of 25 June 2015 (as subsequently amended and restated on 4 March 2016), between Volvo Car Corporation as borrower, the Issuer as guarantor and AB Svensk Exportkredit (publ) as lender.

Unless otherwise defined in this Offering Circular, capitalised terms shall have the meanings given to them in the section headed "Glossary".

Rounding

Certain figures included in this Offering Circular have been subject to rounding adjustments; accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.

Ratings

Tranches of Notes issued under the Programme may be rated or unrated. Where a Tranche of Notes is rated, such rating will not necessarily be the same as the rating(s) described above or the rating(s) assigned to Notes already issued. Where a Tranche of Notes is rated, the applicable rating(s) will be specified in the relevant Pricing Supplement. Whether or not each credit rating applied for in relation to a relevant Tranche of Notes will be (1) issued by a credit rating agency established in the EEA and registered under the CRA Regulation, or (2) issued by a credit rating agency which is not established in the EEA but will be endorsed by a CRA which is established in the EEA and registered under the CRA Regulation or (3) issued by a credit rating agency which is not established in the EEA but which is certified under the CRA Regulation will be disclosed in the Pricing Supplement. In general, European regulated investors are restricted from using a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the EEA and registered under the CRA Regulation or (1) the rating is provided by a credit rating agency not established in the EEA but is endorsed by a credit rating agency established in the EEA and registered under the CRA Regulation or (2) the rating is provided by a credit rating agency not established in the EEA which is certified under the CRA Regulation.

Notice to Investors

The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor may wish to consider, either on its own or with the help of its financial and other professional advisers, whether it:

(a) has sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained or incorporated by reference in this Offering Circular or any applicable supplement;

(b) has access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact the Notes will have on its overall investment portfolio;

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(c) has sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including Notes where the currency for principal or interest payments is different from the potential investor's currency;

(d) understands thoroughly the terms of the Notes and is familiar with the behaviour of financial markets; and

(e) is able to evaluate possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Stabilisation

In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the Stabilisation Manager(s) (or persons acting on behalf of any Stabilisation Manager(s)) in the applicable Pricing Supplement may over allot Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, stabilisation may not necessarily occur. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may cease at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation action or over-allotment must be conducted by the relevant Stabilisation Manager(s) (or person(s) acting on behalf of any Stabilisation Manager(s)) in accordance with all applicable laws and rules.

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IMPORTANT – EUROPEAN ECONOMIC AREA RETAIL INVESTORS

If the applicable Pricing Supplement in respect of any Notes includes a legend entitled "Prohibition of Sales to European Economic Area Retail Investors", the Notes are not intended from 1 January 2018 to be offered, sold or otherwise made available to and, with effect from such date, should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU ("MiFID II"); (ii) a customer within the meaning of Directive 2002/92/EC ("IMD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Directive. Consequently no key information document required by Regulation (EU) No 1286/2014 (the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them available to retail investors in the European Economic Area has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the European Economic Area may be unlawful under the PRIIPs Regulation.

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FORWARD-LOOKING STATEMENTS

This Offering Circular includes forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believe," "estimate," "anticipate," "expect," "forecast," "foresee," "aim," "intend," "may," "plan," "project," "seek," "should," "will," "would" or, in each case, similar expressions or the negative thereof, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. Such forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and that may be incapable of being realised. They appear in a number of places throughout this Offering Circular and include statements regarding the Issuer's, the Guarantor's or the Group's intentions, beliefs or current expectations concerning, among other things, statements relating to:

 the Group's strategy, including statements relating to the next phase in its transformation and its next generation of cars, outlook and growth prospects;

 the Group's operational and financial targets and its medium-term and long-term annual sales goals;

 the Group's liquidity, capital resources, capital expenditures and access to funding, or statements relating to pending or contemplated refinancings or capital-raising efforts;

 the Group's planned investments;

 the Group's plans for future operations and facilities;

 expectations as to future demand for the Group's cars;

 general global economic trends and trends in the and the premium passenger car segment in particular;

 the impact of regulations and laws on the Group and its operations; and

 the competitive environment in which the Group operates.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Each of the Issuer and the Guarantor cautions prospective investors that forward-looking statements are not guarantees of future performance and that the actual results of the Group's operations, including its financial condition and liquidity, and the development of the Group's industry may differ materially from those made in or suggested by the forward-looking statements contained in this Offering Circular. In addition, even if the Group's results of operations, financial condition and liquidity, and the development of the Group's industry are consistent with the forward-looking statements contained in this Offering Circular, those results or developments may not be indicative of results or developments in subsequent periods. Factors that could cause these differences include, but are not limited to:

 changes in international, national and local economic, political, regulatory, business, industry, labour and social conditions;

 changes in underlying customer behaviour, including changes in customer buying trends and patterns, customer preference and demand and consumer purchasing power;

 competition in the markets in which the Group operates;

 changes in laws, regulations and governmental policies, including tax law and fiscal policy;

 the Group's ability to successfully develop and implement new products, designs, technologies and innovations;

 changes in technology and automotive trends;

 the Group's ability to forecast customer trends and preferences and demand for its cars;

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 the availability and cost of consumer financing for cars;

 changes in the availability and cost of suppliers, raw materials and key inputs;

 disruptions to the Group's facilities;

 fluctuations in currency exchange rates;

 developments relating to product liability, warranties and recalls with respect to the Group's cars;

 the Group's ability to protect intellectual property;

 the Group's ability to generate the funds needed to service its debt and receive external financing;

 changes regarding the Group's reputation and brand image;

 changes in the Group's business strategy, development and investment plans;

 announcements by the Group's competitors and others as to regulatory and similar matters, compliance with regulations, exposures to litigation and other matters of similar nature which may cause capital markets to downgrade investments in the Group's industry; and

 costs associated with ensuring the Group's facilities meet the requirements of applicable environmental, health and safety laws.

Although the Issuer and the Guarantor believe the expectations reflected in any forward-looking statement are reasonable, the Issuer and the Guarantor cannot give any assurance that they will materialise or prove to be correct.

The Issuer and the Guarantor urge prospective investors to read "Risk Factors" and "Business" sections for a more complete discussion of the factors that could affect the Issuer's and the Guarantor's future performance, their industry and related regulation thereof. In light of these risks, uncertainties and assumptions, the events described or suggested by the forward-looking statements in this Offering Circular may not occur.

These forward looking statements speak only as of the date on which the statements were made. Except as required by law or applicable stock exchange rules or regulations, the Issuer and the Guarantor undertake no obligation to update or revise publicly any forward looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward looking statements attributable to the Issuer or the Guarantor or to persons acting on their behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Offering Circular.

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RISK FACTORS

Any investment in the Notes is subject to a number of risks. Prior to investing in the Notes issued under the Programme, prospective investors should carefully consider risk factors associated with any investment in any Notes, the business of the Issuer, the Guarantor and/or the Group and the industry in which it operates together with all other information contained in this Offering Circular, including, in particular the risk factors described below. Words and expressions defined in the "Terms and Conditions of the Notes" below or elsewhere in this Offering Circular have the same meanings in this section.

The following should be used as guidance only but are the material risks that the Issuer and Guarantor believes to be the most relevant to an assessment by a prospective investor of whether to consider an investment in Notes issued under the Programme. Additional risks and uncertainties relating to the Issuer, the Guarantor and/or the Group that are not currently known to the Issuer or Guarantor at the date of this Offering Circular, or that it currently deems immaterial as at such date, may individually or cumulatively also have a material adverse effect on the business, prospects, results of operations and/or financial position of the Issuer the Guarantor and/or the Group and, if any such risk should occur, the price of the Notes may decline and investors could lose all or part of their investment. Investors should consider carefully whether an investment in Notes issued under the Programme is suitable for them in light of the information in this Offering Circular and their personal circumstances.

This Offering Circular also contains forward-looking statements that involve risks and uncertainties. The actual results of the Group may differ materially from those anticipated in these forward-looking statements as a result of various factors, including the risks described below and elsewhere in this Offering Circular (see "Forward-Looking Statements").

Risks Associated with the Automotive Industry

Global economic conditions could have an adverse impact on the Group's sales and results of operations.

The automotive industry depends on general economic conditions around the world. Economic slowdowns in the past have significantly affected the automotive and related industries. Demand for automobiles is influenced by a variety of factors, including, among other things, the growth rate of the global economy, availability of credit, disposable income of consumers, interest rates, environmental policies, tax policies, safety regulations, freight rates and fuel prices.

The Group's business is focused on the Western European, Chinese and American markets. Economic conditions in each of these markets vary greatly, and are subject to changes from diverse and different causes. As such, the Group's profitability can be adversely affected by market dynamics in any of these regions. While the global economic climate has generally improved in recent years, the prevailing economic environment in some countries or regions continues to be a cause of concern. In the Group's main markets, economic conditions have been impacted by various geopolitical and other events. In Western Europe, limited economic growth coupled with uncertainty about the future relationship between the and the European Union and the impact of the conflicts in the Middle East may have a negative impact on demand. In China, the effects of the recent economic slowdown and stock market volatility may impact demand for the Group's cars in China and wider Asia. In the United States, while the slow economic recovery appears to be sustainable, there is uncertainty as to the Trump administration's policies and its relationship with Congress, and these factors may impact demand for the Group's cars. As a result of the above and other future economic and political events, demand for cars in general, or the Group's cars in particular, may be materially adversely affected.

Deterioration in key economic factors, such as GDP growth rates, interest rates and inflation, as well as the reduced availability of financing for cars at competitive rates, may result in a decrease in demand for automobiles. A decrease in demand would, in turn, cause automobile prices and manufacturing capacity utilisation rates to fall. Such circumstances have in the past materially affected, and may in the future materially affect, the Group's business, results of operations and financial condition.

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A decline in retail consumers' purchasing power or consumer confidence, or in corporate consumers' financial condition and willingness to invest could adversely affect the Group's business.

Demand for cars for personal use generally depends on consumers' net purchasing power, their confidence in future economic developments and changes in fashion and trends, while demand for cars for commercial use by corporate consumers primarily depends on the consumers' financial condition, their willingness to invest (motivated by expected future business prospects) and available financing. A decrease in potential consumers' disposable income or their financial flexibility will generally have a negative impact on demand for the Group's products.

A weak macroeconomic environment, combined with restrictive lending and a low level of consumer sentiment generally, may reduce consumers' net purchasing power and lead existing and potential consumers to refrain from purchasing a new car, defer a purchase further or purchase a smaller model with fewer specifications at a lower price. A deteriorating macroeconomic environment may lead to reluctance by corporate consumers to invest in cars for commercial use and/or to lease cars and thereby leads to a postponement of fleet renewal contracts.

To stimulate demand, the automotive industry has offered consumers and dealers price reductions on cars and services, which has led to increased price pressures and sharpened competition within the industry. As a provider of numerous high-volume models, the Group's profitability and cash flows are significantly affected by the risk of rising competitive and price pressures. Special sales incentives and increased price pressures in the new car business also influence price levels in the used car market, with a negative effect on car resale values. This may have a negative impact on the profitability of the used car business in the Group's dealer organisations.

Intensifying competition could adversely affect the Group's sales and results of operations.

The global automotive industry, including the premium passenger car segment, is highly competitive and competition is likely to further intensify. A range of factors affect the competitive environment, including, among others, design, quality and features of cars, innovation, safety, development time, ability to control costs, pricing, reliability, fuel economy, environmental impact and perception thereof, customer service and financing terms. There is a strong trend among market participants in the premium passenger car segment towards intensifying efforts to retain their competitive position in established markets while also developing a presence in new markets such as China. The Group anticipates that additional competitors will seek to enter these markets and that existing market participants will aggressively try to protect or increase their market share. Increased competition may result in pricing pressures and reduced margins, and the Group may find it difficult to gain or hold market share, which could have a material adverse effect on the Group's results of operations and financial condition.

The Group is exposed to risks relating to public health concerns relating to diesel and petrol engine emissions.

Vehicle emissions standards and test procedures have been under scrutiny in both the U.S. and Europe. The U.S. Environmental Protection Agency (the "EPA") has announced stricter diesel emissions testing, which will include testing diesel cars in on-road situations. The has also published a range of regulations and provisions (in particular, the tightening of the Euro 6 standards and implementing the European Commission Regulations 2016/646 and 2016/427). These regulations and provisions include establishing stricter emissions testing and stricter controls over emission control systems. This includes mandating the use of "Real Driving Emissions" ("RDE") test procedures in addition to current standards, which require that new vehicle models achieve successful RDE test results from 2017 and that all new vehicles achieve successful RDE test results starting in 2019. This new emissions testing includes a gradual phase-in period, with all new vehicles being required to emit a level of nitrogen oxide that is no more than 50% above current limits by 2021. The European Commission is expected to adopt further packages regarding the completion of the framework of RDE test procedures and other measures.

As a general matter, regulators, consumer groups and environmental and social interest groups are now heavily focused on any data that suggests that different testing methods indicate inconsistent emissions results, even where the different methods are each compliant with regulations and considered valid by the industry. Any such inconsistencies yielded in emissions results, could materially affect individual manufacturers, including the Group. Like other manufacturers in the automotive industry, the Group

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expects its internal and external costs to audit and monitor emissions testing to increase as a result of heightened regulatory requirements and enforcement.

In addition, consumers may develop negative perceptions of diesel-engine cars for a variety of reasons, including their potential environmental impact, uncertainty related to their resale value and unresolved questions related to performance. There is also now an emerging trend for private individuals or groups of individuals to advance claims and lawsuits against auto manufacturers even where the manufacturers are not the subject of any regulatory enforcement or scrutiny about their product emissions. The Group cannot exclude the possibility that it could be subject to such claims or lawsuits. There is also a risk that public health concerns relating to diesel engines in particular may influence government policies, leading to economic disincentives toward the production and purchase of diesel vehicles, or more wide-reaching restrictions on the use of certain technologies. The governments of both and the United Kingdom have, for example, indicated a long-term intention to prohibit the sale of all diesel and petrol cars by 2040.

While the Group does not sell diesel-engine cars in the United States, retail sales of diesel-engine cars accounted for approximately 81% of the Group's total retail sales in EMEA in the year ended 31 December 2016. If demand for diesel-engine cars were to decline as a result of negative public perception, increased diesel-engine car prices due to the inclusion of additional emissions equipment, a reduction in tax or other incentives for diesel-engine cars or for any other reason, the Group's business, results of operations and financial condition could be materially adversely affected.

In addition, as emissions regulations and testing procedures are constantly evolving, the Group cannot fully estimate their potential future impact. To comply with such regulations and testing procedures, the Group will likely have to incur additional capital expenditure and research and development expenditure to upgrade products and plants, which would have an impact on the Group's cost of production and results of operations and may be difficult to pass through to consumers.

The Group's competitors may be able to benefit from the cost savings offered by industry consolidation or alliances.

Designing, manufacturing and selling cars is capital intensive and requires substantial investments in manufacturing, machinery, research and development, product design, engineering, technology and marketing in order to meet both consumer preferences and regulatory requirements. If the Group's competitors consolidate or enter into other strategic agreements such as alliances, they may be able to take better advantage of economies of scale and to benefit from the cost savings offered, which could adversely affect the Group's competitiveness with respect to those competitors. Competitors could also use consolidation or alliances as a means of enhancing their competitiveness (including through the acquisition of technology), which could also materially adversely affect the Group's business.

The Group is exposed to the risks of new drive technologies being developed and the resulting effects on the automobile market.

Over the past few years, the global market for automobiles, particularly in established markets, has been characterised by increasing demand for more efficient cars and technologies. This is related, in particular, to the global debate on how to address climate change resulting from activities that emit carbon into the atmosphere through the release of carbon dioxide (CO2) and other high global warming potential gases. The Group endeavours to take account of the ever more-stringent laws and regulations that have been and are likely to be adopted and is researching, developing and producing new technologies, such as hybrid engines and electric cars, with a reduced carbon output. The Group is also investing in programmes to improve fuel economy, such as the successful Drive-E development programme, and in various electronic solutions.

There is a risk that these research and development activities will not achieve their planned objectives, including as a result of unresolved technological barriers, systems failures or human errors in calculating or monitoring the success of the technologies, or that competitors or joint ventures set up by competitors will develop better solutions and will be able to manufacture the resulting products more rapidly, in larger quantities, with a higher quality and/or at a lower cost. This could lead to increased demand for the products of such competitors and result in a loss of market share for the Group. There is also a risk that the money invested in researching and developing new technologies will, to a considerable extent, have been spent in vain if the technologies developed or the products derived therefrom are unsuccessful in the

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market or if competitors have developed better or less expensive products. It is possible that the Group could then be compelled to make new investments in researching and developing other technologies to maintain existing market share or to regain the market share lost to competitors.

In addition, promotion of new technologies aimed at reducing carbon emissions encourages consumers to look beyond standard factors (such as price, design, performance, brand image or comfort/features) to differentiation of the technology used in the vehicle or the manufacturer or provider of this technology. This could lead to shifts in demand and the value-added parameters in the automotive industry at the expense of the Group's products.

New or changing laws, regulations and government policies regarding improved fuel economy, reduced greenhouse gas and other emissions, and car safety may have an adverse effect on the Group's cost of operations and methods of business.

The Group's products are subject to comprehensive and constantly changing laws, regulations and policies throughout the world and the Group expects the number and extent of legal and regulatory requirements and the related costs of changes to its product portfolio to increase significantly in the future. In Europe and the United States, for example, governmental regulation is primarily driven by concerns about the environment (including greenhouse gas emissions), fuel economy, energy security and car safety. Evolving regulatory requirements could significantly affect the Group's product development plans and may result in substantial costs and limit the number and type of cars the Group sells and where it sells them, including the sale of cars, which may affect the Group's revenue. The European Union's introduction of regulations to mandate the use of RDE test procedures creates a compliance challenge for the Group's European operations. The European Union began RDE testing in January 2016, with further phases taking effect in 2017 and 2019 (and then again in 2020 and 2021). Any violations of governmental regulations may result in criminal and civil penalties, including significant monetary fines, third party claims for loss or injury, loss of relevant licences, or requirements for the Group to implement costly corrective actions, as well as damage to the Group's reputation, which could have a material adverse effect on the Group's business, results of operations and financial condition. Violations of these laws may occur, among other ways, from errors in monitoring emissions from the Group's products or production sites into the environment, such as the use of incorrect methodologies or defective or inappropriate measuring equipment, errors in manually capturing results or other mistaken or unauthorised acts of the Group's employees, suppliers or agents.

To comply with current and future environmental regulations, the Group may have to incur additional capital expenditure and research and development expenditure to upgrade products and plants, which would have an impact on its cost of production and results of operations and may be difficult to pass through to its consumers. If the Group is unable to develop commercially viable technologies within the time frames set by the new standards, it could face significant civil penalties or be forced to restrict product offerings drastically to remain in compliance. The Group anticipates that the number and extent of these regulations, and their effect on its cost structure and product portfolio, will increase significantly in the future.

Changes in tax, tariff or fiscal policies could adversely affect the demand for the Group's cars.

The imposition of any additional taxes and levies designed to limit the use of automobiles could adversely affect the industry and potentially demand for the Group's cars and its results of operations. Changes in corporate and other taxation policies as well as changes in export and other incentives given by various governments or import or tariff policies could also adversely affect the Group's results of operations. Such government actions may be unpredictable and beyond the Group's control, and any adverse changes in government policy could have a material adverse effect on the Group's business, results of operations and financial condition.

Privacy concerns relating to the Internet are increasing, which could result in new legislation, negative public perception and/or user behaviour that negatively affect the Group's business.

Some of the Group's cars are designed, and all of the Group's future cars will be designed within the next five years, with built-in data connectivity, such as the Apple CarPlay©, Android Auto© and Volvo On Call© technologies. The Group's collection, use, retention, security and transfer of personal information of its customers is subject to consumer and data protection laws in the jurisdictions in which it operates. The

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interpretation and application of consumer and data protection laws in the United States, Europe and elsewhere often can be uncertain, in conflict or in a state of flux.

The European Union and many countries within the European Union have adopted privacy directives or laws that strictly regulate the collection and use of personally identifiable information of Internet users. Additionally, the United States and other jurisdictions have adopted legislation which governs the collection and use of certain personal information, including the EU General Data Protection Regulation (the "GDPR") which significantly increases the potential penalties which may be imposed in the event of any breach or violation. The Group is subject to these personal data and privacy laws and regulations and related security protocols with respect to the use, transfer and disclosure of personal data. In addition, there are many proposals by lawmakers and the industry in this area that address the collection, maintenance and use of consumer information, Web browsing and geo-location data, and that establish data security and breach notification procedures.

Given that this is an evolving and unsettled area of regulation, any new significant restrictions or technological requirements could subject the Group to potential liability or restrict the Group's present business practices, which, in turn, could have an adverse effect on its business, results of operations and financial condition. In addition, in the event of a security breach of the Group's data management systems affecting consumer information, or in the event of the loss or corruption of consumer information, the Group could face liability, including administrative, civil and criminal liability and the imposition of fines by relevant authorities. Compliance with any applicable laws could also delay or impede the development of new products, result in negative publicity, increase the Group's operating costs, require significant management time and attention, or subject the Group to inquiries or investigations, claims or other remedies, including fines or demands that the Group modifies or ceases existing business practices.

Risks Associated with the Group's Business

The Group's future success depends on its continued ability to introduce its next generation of cars.

The next generation of the Group's model line-up began with the launch of the Volvo XC90 in 2014. In 2016, the Group launched the and the , and in 2017 it launched the Volvo XC60 and Volvo XC40, and the Group plans to renew its remaining product portfolio in the coming years. In order to meet its sales goals, the Group has invested heavily in car and powertrain design, engineering and manufacturing. The Group's ability to realise acceptable returns on these investments will depend in large part on consumers' acceptance of new car offerings, as well as the Group's ability to complete its car launch schedule on the contemplated timeline.

The Group undertakes significant market research and testing prior to developing and launching new cars or upgraded variants of existing models. Nevertheless, market acceptance of the Group's cars depends on a number of factors, many of which are outside of its control and require it to anticipate consumer preferences and competitive products several years in advance. These factors include the market perception of styling, safety, reliability, capability and cost of ownership of the Group's cars as compared to those of its competitors, as well as other factors that affect demand, including price competition and financing or lease programmes. As noted above, environmentally friendly considerations, particularly with respect to technology aimed at reducing carbon emissions, may become a factor in consumer decision-making. If the Group fails to continue introducing new cars or upgraded variants of its existing models that can compete successfully in the market, its results of operations and financial condition could deteriorate.

If the Group's new cars or upgraded variants of its existing models are not received favourably by consumers, its car sales, market share and profitability will suffer. If the Group is required to cut capital expenditures due to insufficient car sales and profitability, or if for any other reason it decides to reduce costs and conserve cash, its ability to continue its program of developing the next generation of cars and keeping pace with product and technological innovations introduced by its competitors would diminish, which could further reduce demand for the Group's cars.

The Group's business is subject to changes in consumer preferences and automotive trends.

The Group's continued success depends in part on its ability to originate and define car and automotive trends, as well as to anticipate and respond promptly to changing consumer demands and automotive trends in the design, styling, technology, production and pricing of its cars. The Group's cars must appeal

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to a customer base whose preferences cannot be predicted with certainty and are subject to rapid change. The Group is under continual pressure to develop new products and improve existing products in increasingly shorter time periods and may be required to presently make significant expenditures in anticipation of future consumer demands and preferences. Evaluating and responding to consumer preferences has become even more complex in recent years, as the Group tries to strengthen its position in the Group's existing markets and continue its expansion into new geographical markets. If the Group misjudges, delays recognition of, or fails to adapt, its products and services to trends and consumer preferences in individual markets or other changes in demand, its sales could drop in the short term, and the Group and its dealers may be faced with excess inventories for some cars and missed opportunities with others. The Group cannot eliminate this risk, even with extensive market research. Further, the significant expenditures necessary to develop, manufacture and sell a car may not generate the anticipated return (if at all). In addition, there can be no assurance that the Group will be able to produce, distribute and market new cars efficiently or that any vehicle category that the Group may expand or introduce will achieve sales levels sufficient to generate profits. Any of these outcomes could have a material adverse effect on the Group's business, results of operations and financial condition.

Additionally, private and commercial users of transportation increasingly use modes of transportation other than the automobile, especially in connection with growing urbanisation and car sharing. Their reasons for doing so may include the rising costs for automotive transport of people and goods, increasing traffic density in major cities and environmental awareness. Although the increased use of car sharing concepts and new city-based car rental schemes create opportunities for new business models in which the Group could potentially participate in the future, they also reduce dependency on private automobiles. A change in consumer preferences away from transport by automobile would have a material adverse effect on the Group's business, results of operations and financial condition.

The Group is more vulnerable to reduced demand for premium cars than automobile manufacturers with a more diversified product range.

The Group operates in the premium car segment, which is a very competitive segment of the passenger car market. Accordingly, its performance is strongly linked to market conditions and consumer demand in this segment. Other premium car manufacturers operate in a broader spectrum of market segments, which makes them comparatively less vulnerable to reduced demand for any specific segment. Any downturn or reduced demand for premium passenger cars, or any reduced demand for the Group's most popular models, in the geographic markets in which it operates could have a more pronounced effect on the Group's performance and earnings than would have been the case if it had operated in a larger number of different market segments.

The Group's inability to identify, understand and adapt to rapid technological change in its industry could impair its ability to remain competitive and adversely affect its results of operations.

The automotive industry is characterised by rapid technological change and evolving government regulation and industry standards. Technological changes, including vehicle connectivity, interactive safety systems, electric cars, autonomous cars and 3-D printed cars, have the potential to significantly change the automotive industry, expanding it into the software business. These technologies will require new expertise, attract competitors from outside the automotive industry and shift supply chains. If the Group is unable to identify, understand and adapt to rapid technological change, it could adversely affect its results of operations and the Group's ability to remain competitive.

Government regulations related to autonomous cars are evolving and unsettled. In the United States, there is a lack of federal guidelines for the testing, certification and regulation of autonomous cars. In Europe, multiple countries have launched national initiatives to support autonomous driving, and these efforts remain ongoing. Many issues related to autonomous driving remain unregulated such as who bears legal liability in the event an autonomous car is involved in a crash or hacked by a criminal third party. As this is a newly evolving industry, the Group is not yet able to evaluate the implications of any new regulations on its business. Any safety concerns identified during the development of autonomous driving initiatives could also have an adverse effect on the Group's reputation and brand.

Additionally, the Group's success depends upon its ability to attract, retain and motivate highly-skilled employees, including those with experience in software engineering, to help the Group adapt to these technological changes. Due to several factors, including the rapid growth of autonomous drive programmes and the increasing number of companies entering the automotive industry, there is

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aggressive competition for experienced engineers. The Group competes intensely with other companies to recruit and hire from this limited pool. If the Group cannot attract, train and retain qualified personnel, it may be unable to expand its business in line with its strategy, compete for new customers or retain existing customers, which could adversely affect its business, results of operations and financial condition.

Reductions in consumer financing could adversely affect the Group's sales and results of operations.

The Group manages consumer finance arrangements and insurance offerings through its Volvo Car Financial Services program, which operates through strategic partnerships and joint ventures with, among others, Volvofinans Bank, Santander, Bank of America, Société Générale, Nordea, CITIC, PAB and BNP Paribas. During the global financial crisis, several providers of consumer finance reduced their supply of consumer financing for the purchase of new cars. Any reduction in the supply of available consumer financing for the purchase of new cars would make it more difficult for some consumers to purchase the Group's cars, which could in turn result in commercial pressure for the Group to offer new (or expand existing) retail or dealer incentives to maintain demand for its cars, thereby materially and adversely affecting its business, results of operations and financial condition.

The Group may face risks associated with its international operations, including unfavourable regulatory, political, tax and labour conditions, which could harm its business.

The Group's cars are exported to a number of geographical markets, and the Group plans to expand its international operations further in the future. Consequently, the Group is subject to various risks associated with conducting its business both within and outside its domestic market and its operations may be subject to political instability, wars, changes in diplomatic relations, terrorism, regional and/or multinational conflicts, natural disasters, fuel shortages/prices, epidemics and labour strikes. In addition, conducting business internationally, especially in emerging markets, exposes the Group to additional risks, including adverse changes in economic and government policies, unpredictable shifts in regulation, inconsistent application of existing laws and regulations, unclear regulatory and taxation systems and divergent commercial and employment practices and procedures. Any significant or prolonged disruptions or delays in the Group's operations related to these risks could adversely impact its results of operations.

The Group's business operations are exposed to uncertainty as a result of the United Kingdom's pending withdrawal from the European Union.

The Group's cars are exported to a number of markets within the European Union, including the United Kingdom. In the nine months ended 30 September 2017 and the year ended 31 December 2016, the Group sold 36,516 cars and 46,722 cars, respectively, in the United Kingdom (approximately 8.9% and 8.7%, respectively, of the Group's total retail sales). On 23 June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union in a national referendum. The referendum was advisory, and the terms of any withdrawal are subject to parliamentary approval and, in any event, a negotiation period that could last two years or longer after the government of the United Kingdom formally initiates a withdrawal process. The referendum and issues relating to the implementation thereof have created significant uncertainty about the future relationship between the United Kingdom and the European Union, and have given rise to calls for the governments of other European Union member states to consider withdrawal.

The Group's business faces uncertainties as a result of the outcome of this referendum. Heightened uncertainty around the economies of the United Kingdom and the greater European Union may have a negative impact on consumer confidence, thereby reducing demand for consumer cars. Lack of clarity about future United Kingdom laws and regulations as the United Kingdom determines, and negotiates with the European Union regarding, which European Union laws will be replaced or replicated in the event of a withdrawal, including financial laws and regulations, tax and free trade agreements, intellectual property rights, environmental, health and safety laws and regulations, immigration laws and employment laws, could increase the Group's costs, depress economic activity and restrict access to capital. If the United Kingdom were to withdraw from the European Union Single Market, it would likely be subject to additional export expenses and increased trade barriers, which may impact the Group's results of operations. Any increased costs may be difficult to pass through to the Group's customers.

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Furthermore, the potential departure from the European Union by the United Kingdom has resulted in a decrease of the value of the British pound sterling. The Group's operations are subject to fluctuations in exchange rates, including such fluctuations in the value of the British pound sterling. Any further decrease in the value of the British pound sterling could have a negative effect on the Group's existing relationships with suppliers or consumers in the United Kingdom, resulting in an adverse impact on its business, financial condition and results of operations. See "—Interest rate, currency and exchange rate fluctuations could adversely affect the Group's results of operations" below.

These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain markets. Asset valuations, currency exchange rates and credit ratings may be especially subject to increased market volatility.

The Group's operations are subject to regulation, supervision and licensing under various laws and regulations.

As a Group with a worldwide business, the Group is required to comply with a wide variety of laws and regulations (including economic sanctions programmes and anti-corruption laws and regulations) that may be costly to adhere to and may affect both the Group's operating results and its financial condition. Compliance with these laws and regulations requires that the Group maintains forms, processes, procedures, controls and infrastructure to support these requirements and these laws and regulations often involve significant compliance costs. The failure to comply with these laws could result in significant statutory civil and criminal penalties for the Group, monetary damages, and damage to the Group's reputation, brand and valued consumer relationships.

Failure to maintain the Group's reputation and brand image could adversely impact its results of operations.

The Group believes that its strong brand is among its most valuable assets, and that its brand image and reputation have contributed significantly to the success of its business. The Group's continued success depends on its ability to maintain, promote and grow its brand image and reputation, including its reputation for providing safe and sustainable mobility which the Group believes is an important part of consumers' identification with the Volvo Cars brand. The Group's results of operations could be adversely impacted if its brand is tarnished or receives negative publicity. In addition, adverse publicity about regulatory or legal action could damage its reputation and brand image, undermine consumer confidence in the Group and reduce long-term demand for its cars, even if the regulatory or legal action is unfounded or not material to the Group's operations, which would have a material adverse effect on the Group's business and results of operations.

Under-performance of the Group's distribution channels may adversely affect the Group's sales and results of operations.

The Group's cars are sold and serviced through a large network of authorised dealers and service centres across Sweden, and a large network of distributors and local dealers in international markets. The Group owns almost no Volvo Cars dealers and instead sells its products to dealers through various supply agreements. The Group monitors the performance of its dealers and distributors and provides them with support to assist them to perform to expectations. There can be no assurance, however, that the Group's expectations will be met by all dealers and distributors. Any under-performance by its dealers, distributors or service centres could adversely affect the Group's business, results of operations and financial condition.

If dealers encounter financial difficulties and the Group's products and services cannot be sold or can be sold only in limited numbers, this would have a direct effect on the sales of such dealers. Additionally, if the Group cannot replace the affected dealers with other franchises, the financial difficulties experienced by such dealers could have an indirect adverse effect on its car deliveries.

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Disruptions to the Group's supply chains or shortages of essential raw materials may adversely affect the Group's production and results of operations.

The Group relies on a global network of suppliers for sourcing raw materials, parts and components used in the manufacture of its cars. At the local level, the Group is at times exposed to reliance on smaller enterprises where the risk of insolvency is greater. Furthermore, for some parts and components, the Group is dependent on a single supplier. The Group's ability to procure supplies in a cost-effective and timely manner or at all is subject to various factors, some of which are not within its control. Additionally, the Group is exposed to disruptions in the supply chain resulting from natural disasters or man-made accidents. Substantial increases in the costs or a significant delay or sustained interruption in the supply of key inputs sourced from areas affected by disasters or accidents could adversely affect the Group's ability to maintain its current and expected levels of production, and therefore negatively affect the Group's revenue and increase its operating expenses. While the Group manages its supply chain as part of its supplier management process, any significant problems with its supply chain or shortages of essential raw materials in the future could affect its results of operations in an adverse manner.

Adverse economic conditions and falling car sales have had a significant financial impact on the Group's suppliers in the past. A deterioration in automobile demand and lack of access to sufficient financial arrangements for the Group's supply chain could impair the timely availability of components. In addition, if one or more of the other global automotive manufacturers were to become insolvent, this would have an adverse impact on the supply chains and may further adversely affect the Group's results of operations.

Increases in input prices may have an adverse impact on the Group's result of operations.

For the nine-month period ended 30 September 2017 and the year ended 31 December 2016, materials cost (including freight and distribution) constituted approximately 61.5% and 64.5%, respectively, of the Group's net revenue. Prices of commodities used in the manufacture of automobiles, including steel, aluminium, copper, zinc, rubber, platinum, palladium and rhodium, have experienced periods of increased volatility in recent years. Furthermore, prices of commodity items such as steel, non-ferrous metals, precious metals, rubber and petroleum products may rise significantly. While the Group continues to pursue cost reduction initiatives, an increase in the price of input materials could impact its profitability to the extent that such increase cannot be absorbed by the market through price increases and/or could have a negative impact on demand. In addition, because of intense price competition and the Group's high level of fixed costs, it may not be able to adequately address changes in commodity prices even if they are foreseeable.

The Group is also exposed to the risk of contraction in the supply, and a corresponding increase in the price of, rare and frequently highly sought-after raw materials, especially those used in car electronics such as rare earths, which are predominantly found in China. Rare earth metal prices and supply remain uncertain. China has, in the past, limited the export of rare earths, including those used in the production of hybrid cars, from time to time. If the Group is unable to find substitutes for such raw materials or pass price increases on to consumers by raising prices, or to safeguard the supply of scarce raw materials, its car production, business and results from operations could be affected.

The Group's business relies on the protection and preservation of its intellectual property and the defence against claims of infringement.

The Group owns or otherwise has rights in respect of a number of patents and trademarks relating to the products it manufactures, which have been obtained over a period of years. Pursuant to an agreement with Volvo Trademark Holding AB, a with AB Volvo, it has a licence to use the Volvo brand name indefinitely for passenger cars and certain other vehicles. Furthermore, as part of its separation from Ford in 2010, a number of bilateral licensing agreements and royalty-free patent assignments and intellectual property licensing agreements remain in place with Ford. See "Business—Intellectual Property—Agreement with Ford" and "Business—Intellectual Property—Agreement with AB Volvo" below. In connection with the design and engineering of new car models and the enhancement of existing models, the Group seeks to regularly develop new technical designs for use in its cars. The Group also uses technical designs which are the intellectual property of third parties with such third parties' consent. Pursuant to an agreement with Ningbo Geely Automobile Research & Development Co., Ltd. ("Ningbo Geely"), the Group has an irrevocable, perpetual licence to use the Compact Modular Architecture ("CMA") technology. See "Business—Intellectual Property—Agreement with Ningbo Geely" below.

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These patents and trademarks have been of value in the growth of the Group's business and may continue to be of value in the future. As the Group continues to work with Ningbo Geely and China Euro Vehicle Technology AB, based in ("CEVT") and to develop technology with other partners in the future, the importance, size, value and complexity of the intellectual property it develops in collaboration with these entities may increase, particularly in relation to software. Although the Group does not regard any of its businesses as being dependent upon any single patent or related group of patents, an inability to protect this intellectual property generally, or the illegal breach of some or a large group of the Group's intellectual property rights, would have a materially adverse effect on its operations, business and/or financial condition. The Group may also be affected by restrictions on the use of intellectual property rights held by third parties, and the Group may be held legally liable for the infringement of the intellectual property rights of others in its products. Moreover, intellectual property laws of some foreign countries may not protect its intellectual property rights to the same extent as Swedish laws.

Furthermore, from time to time the Group has received communications from other parties asserting the existence of patent rights, copyrights, trademark rights or other intellectual property rights which they believe cover certain components used in the Group's cars, as well as technology and/or services that it uses in, or are relevant to, its business. The rate of patent infringement assertions by third party non-practicing entities (sometimes referred to as "patent trolls") is increasing. The Group may be adversely affected by such litigation, other proceedings or claims brought against it alleging infringement of third party proprietary rights. The instigation of legal proceedings or claims, the Group's inability to favourably resolve or settle such proceedings or claims, or the determination of any adverse findings against it in connection with such proceedings or claims could adversely affect the Group's business, financial condition and results of operations, as well as the Group's reputation.

In connection with the Group's leasing business, it is exposed to the risk that the market value of the leased cars will fall below the estimated and guaranteed residual values.

The Group offers residual value guarantees on the purchase of certain leases in some markets. The value of these guarantees is dependent on used car valuations in those markets at the end of the lease, which is subject to change (so-called residual value risk). Residual value risk may be influenced by external factors such as the selection of used cars being offered, consumer confidence and consumer preferences, exchange rates, incentive programs offered by governments and automobile manufacturers and general economic circumstances, which are beyond the Group's control. While the Group closely monitors the secondary market, uncertainties may also exist with respect to the internal methods for calculating residual values, for example owing to estimates or assumptions that prove to have been incorrect. Consequently, the Group may be adversely affected by movements in used car valuations in these markets.

Any disruption in the operations of the Group's manufacturing, design and research and development facilities could adversely affect the Group's business, financial condition or results of operations.

The Group owns and operates eight plants and four research and design centres across the world. The Group could experience disruption to its manufacturing, design and research and development capabilities for a variety of reasons, including, among others, extreme weather, fire, theft, system failures, natural catastrophes, mechanical or equipment failures and similar risks. For example, its plant is in the Sichuan province of China, which is located in a known earthquake zone. If an earthquake or other natural disaster were to occur, it could damage one of the Group's plants and cause the Group to shut down production. Any significant disruptions could adversely affect the Group's ability to design, manufacture and sell its cars and, if any of those events were to occur, the Group cannot be certain that it would be able to shift its design, engineering and manufacturing operations to alternative sites in a timely manner or at all. Any such disruption could therefore materially affect its business, results of operations and financial condition.

Interest rate, currency and exchange rate fluctuations could adversely affect the Group's results of operations.

The Group has both interest-bearing assets (including cash balances) and interest-bearing liabilities, certain of which bear interest at variable rates. The Group is therefore exposed to changes in interest rates. While the Group assesses the appropriateness of these arrangements in light of changes to the size or nature of its operations on an ongoing basis, it may nonetheless be adversely affected by the impact of changes in interest rates.

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The Group's operations are also subject to fluctuations in exchange rates with reference to countries in which it operates. Besides Sweden, the Group sells cars in Western Europe, China, the United States and many other markets around the world and therefore generates revenue in, and has significant exposure to movements of, the Chinese renminbi, U.S. dollar, euro and other currencies relative to the Swedish krona, its reporting currency. Additionally, the Group generates production costs and cost of raw materials in a variety of currencies, in particular euros and Chinese renminbi. As a result, the Group has significant exposure to movements of the Chinese renminbi, U.S. dollar and euro relative to the Swedish krona.

Moreover, the Group has outstanding foreign currency denominated debt and is sensitive to fluctuations in foreign currency exchange rates (e.g., the China Development Bank Facility is denominated partially in euros and partially in U.S. dollars and some of the Group's outstanding bonds are denominated in euros). The Group has experienced, and expects to continue to experience, foreign exchange losses and gains on obligations denominated in foreign currencies in respect of its borrowings and foreign currency assets and liabilities due to currency fluctuations.

The Group seeks to manage its foreign exchange exposure through the use of certain hedging agreements, including options, forwards and other financial instruments. It is, however, exposed to the risk that appropriate hedging lines for the type of risk exposures the Group are subject to may not be available at a reasonable cost or at all. Moreover, there are risks associated with the use of such hedging instruments. Whilst mitigating to some degree its exposure to fluctuations in currency exchange rates, the Group may potentially forgo benefits that might result from market fluctuations in currency exposures. Hedging transactions can also result in substantial losses. Such losses could occur under various circumstances, including, without limitation, any circumstances in which a counterparty does not perform its obligations under the applicable hedging arrangement, the arrangement is imperfect or the Group's internal hedging policies and procedures are not followed or do not work as planned.

The Group is subject to risks associated with product recalls and warranties.

The Group is subject to risks and costs associated with product recalls and warranties in connection with performance, compliance or safety-related issues affecting its cars. The Group may decide to initiate a recall if it concludes that its cars do not or might not comply with applicable standards, or in some circumstances, governmental authorities themselves may initiate a recall as a result of their own investigations into the Group's operations. Further, the Group may initiate voluntary service campaigns if it believes that would be of value to consumers. The Group may expend considerable resources in connection with product recalls and service campaigns, and these resources may typically include the cost of the part being replaced and the labour required to remove and replace the defective part. In addition, product recalls could prevent or delay launch of new model cars or cause consumers to question the safety or reliability of the Group's cars and harm the Group's reputation. Any harm to the reputation of any one of the Group's models could result in a substantial loss of customers.

The Group may become subject to product liability claims, which could harm the Group's financial condition and liquidity if it is not able to successfully defend or insure against such claims.

The Group spends substantial resources to ensure that it complies with governmental safety regulations, mobile source emissions regulations and other standards. Compliance with governmental standards, however, does not necessarily prevent individual or class actions, which can entail significant cost and risk. Accordingly, the Group may become subject to product liability claims, which could harm its business, results of operations and financial condition. The automobile industry experiences significant product liability claims, and the Group has inherent risk of exposure to claims in the event that its cars do not perform as expected or malfunction resulting in personal injury or death. A successful product liability claim against the Group could require the Group to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about the Group's cars and business, thereby adversely affecting the Group's reputation and inhibiting or preventing the commercialisation of future cars, which could have a material adverse effect on the Group's brand, business and results of operations. Furthermore, simply responding to actual or threatened litigation or governmental investigations of the Group's compliance with regulatory standards, whether related to the Group's products or business or commercial relationships, may require significant expenditures of time and other resources. Whilst the Group seeks to insure against product liability risks, insurance may be insufficient to protect against any monetary claims and will not mitigate any reputational harm. Any lawsuit seeking significant monetary damages may have a material adverse effect on the Group's reputation, business and financial condition. The Group may not be able to secure additional product liability insurance coverage

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on commercially acceptable terms or at reasonable costs when needed, particularly if the Group faces liability for its products and is forced to make a significant claim under such a policy.

The Group is exposed to risks in connection with product warranties as well as the provision of services.

A number of the Group's contractual and legal requirements oblige it to provide extensive warranties to its customers, dealers and national distributors. There is a risk that, relative to the guarantees and warranties granted, the calculated product prices and the provisions for the Group's guarantee and warranty risks have been set, or will in the future be set, too low. There is also a risk that the Group will be required to extend the guarantee or warranty originally granted in certain markets for legal reasons, or provide services as a courtesy or for reasons of reputation where it is not legally obliged to do so, and for which it will generally not be able to recover from suppliers or insurance.

The Group's business may be adversely affected by risks associated with joint ventures and partnerships.

The Group is a party to several joint ventures. The Group has pursued and may continue to pursue significant investments in certain strategic development projects with third parties. Joint ventures often require unanimous approval of the parties to the joint venture or their representatives for certain fundamental decisions. If a unanimous decision is not reached when required, it could lead to a deadlock in the operations of the joint venture. Additionally, differences in views among joint venture participants may result in delayed decisions or failures to agree on major issues. The Group does not have majority control over all of its joint ventures and partnerships, thereby increasing the risk that it may not concur with certain actions or decisions and may not be able to control the behaviour of its joint venture partners. Any failure of such joint venture participants to meet their obligations to the Group or to third parties, or any disputes with respect to the parties' respective rights and obligations, could have a material adverse effect on the joint venture and, therefore, could have a material adverse effect on the Group's business, results of operations and financial condition. Furthermore, the Group's joint venture with Autoliv will involve a significant degree of software development. As such, there may be challenges, risks and potential exposures related to software development which are different from the automotive industry risks in general and of which the Group has limited knowledge or experience, each of which could have a material adverse effect on the outcome of the joint venture and on the Group's business, financial condition or results of operations.

The Group may be adversely affected by labour unrest.

A substantial portion of the Group's employees are members of trade unions and are subject to collective bargaining agreements. See "Business—Employees" below. While as a general matter the Group considers labour relations with its employees to be good, it may in the future face labour unrest, at its own facilities or at those of its suppliers, which may delay or disrupt the Group's operations in the affected regions, including the sourcing of raw materials and parts, the manufacture, sales and distribution of cars and the provision of services. If work stoppages or lock-outs at the Group's facilities or at the facilities of its major suppliers occur or continue for a long period of time, the Group's business, financial condition and results of operations may be materially adversely affected.

Additionally, the Group renegotiates the collective bargaining agreement for its Swedish employees on a yearly basis. Breakdowns in these negotiations or any inability to reach an agreement may affect the Group's operations.

The Group could be adversely affected by the loss of one or more key personnel or by an inability to attract and retain highly qualified employees.

The Group believes that its growth and future success depends in large part on the skills of its executive and other senior officers, as well as its senior designers and engineers. The loss of the services of certain of these employees could impair its ability to continue to implement its business strategy. Many of the Group's executive and other senior officers have long-standing ties within its primary lines of business and experience with the Group's operations, and have contributed significantly to the Group's growth. If the Group loses the services of one or more of them, he or she may be difficult to replace the Group's business could be adversely affected.

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Future pension obligations may prove more costly than currently anticipated and the market value of assets in the Group's pension plans could decline.

The Group provides post-retirement and pension benefits to its employees, some of which are defined benefit plans. The Group's pension liabilities are generally funded and its pension plan assets are particularly significant.

Under the arrangements with the trustees of the defined benefit pension schemes, an actuarial valuation of the assets and liabilities of the schemes is undertaken quarterly, with a more extensive report received before the year-end closing. The most recent valuation, as at 31 December 2016, indicated a shortfall in the assets of the schemes as at that date, versus the actuarially determined liabilities as at that date, of SEK 6,348 million.

Lower return on pension fund assets, changes in market conditions, changes in interest rates, changes in inflation rates and adverse changes in other critical actuarial assumptions may impact the Group's pension liabilities or assets and consequently increase funding requirements, which will adversely affect the Group's financial condition and results of operations.

The Group's insurance coverage may not be adequate to protect it against all potential losses to which the Group may be subject, which could have a material adverse effect on the Group's business.

The Group believes that the insurance coverage that it maintains is reasonably adequate to cover normal risks associated with the operation of its business, such as coverage for people, property and assets, including construction and general, auto and product liability, in accordance with treasury policy, but it is not possible to insure fully against all risks. The Group uses a combination of third-party insurance and self-insurance to provide for potential liabilities. The Group has a wholly-owned captive insurance company, Volvo Car Insurance AB, that provides coverage for part of the Group's risks in relation to property damage and business interruption, general and products liability and transport. The reserves of the Group's captive insurance are subject to periodic adjustments based upon actuarial evaluations, which affect its overall results of operations. These periodic adjustments can be favourable or unfavourable. There can be no assurance that any claim under the Group's insurance policies will be honoured fully or timely, the Group's insurance coverage will be sufficient in any respect or that its insurance premiums will not increase substantially. Accordingly, to the extent that the Group suffers loss or damage that is not covered by insurance or which exceeds the Group's insurance coverage, or have to pay higher insurance premiums, the Group's financial condition may be negatively affected.

The Group is exposed to various operational risks, including risks in connection with the use of information technology.

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This includes, among other things, losses that are caused by a lack of controls within internal procedures, violation of internal policies by employees, disruption or malfunction of information technology ("IT") systems, computer networks and telecommunications systems, mechanical or equipment failures, human error, natural disasters, security breaches or malicious acts by third parties (including, for example, hackers). The Group is generally exposed to risks in the field of information technology, since unauthorised access to or misuse of data processed on its IT-systems, human errors associated therewith or technological failures of any kind could disrupt its operations, including the manufacturing, design and engineering processes or result in breaches of regulations such as the GDPR (see "Privacy concerns relating to the Internet are increasing, which could result in new legislation, negative public perception and/or user behaviour that negatively affect the Group's business" above). Like any other business with complex manufacturing, research, procurement, sales and marketing and financing operations, the Group is exposed to a variety of operational risks and, if the protection measures put in place prove insufficient, its results of operations and financial condition can be materially adversely affected.

Unauthorised control or manipulation of cars' systems may cause them to operate improperly or not at all, or compromise their safety and data security, which could result in loss of confidence in the Group and harm the Group's business.

There have been reports of cars of other automobile manufacturers being "hacked" to grant access to and operation of the cars to unauthorised persons and would-be thieves. The Group's cars are technologically

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advanced machines requiring the inter-operation of numerous complex and evolving hardware and software systems. Although the Group has designed, implemented and tested security measures to prevent unauthorised access to its cars and their systems, the Group's information technology networks and communications with the Group's cars may be vulnerable to interception, manipulation, damage, disruption or shutdown due to attacks by hackers or breaches due to errors by personnel who have access to the Group's networks and systems. Any such attacks or breaches could result in unexpected control of or changes to the functionality of the Group's cars, user interface and performance characteristics. Hackers may also use similar means to gain access to data stored in or generated by the car, such as its current geographical position, previous and stored destination address history and web browser "favourites". Any such unauthorised control of cars or access to or loss of information could result in legal claims or proceedings and negative publicity, which would negatively affect the Group's brand and reputation and harm its business, results of operations and financial condition.

The Group's plant are highly regulated, and the Group may incur significant costs to comply with, or address liabilities under, environmental, health and safety laws and regulations.

The Group's plants are subject to a wide range of environmental, health and safety requirements. These requirements address, among other things, air emissions, wastewater discharges, accidental releases into the environment, human exposure to hazardous materials, the storage, treatment, transportation and disposal of waste and hazardous materials, the investigation and clean-up of contamination, chemical regulation, process safety and the maintenance of safe conditions in the workplace. Many of the Group's operations require permits and controls to monitor or prevent pollution. Continuing, modifying or expanding the Group's operations may require the Group to renew, revise or obtain new permits. Further, environmental, health and safety laws and regulations tend to become more stringent over time. The Group has incurred, and will continue to incur, substantial on-going capital expenditures to ensure compliance with current and future environmental, health and safety laws and regulations or their more stringent enforcement. Violations of these laws and regulations could result in the imposition of substantial fines and penalties, the suspension, revocation or non-renewal of the Group's permits, or the closure of plants.

Other environmental, health and safety laws and regulations, such as the European Union Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemical substances (the "REACH Regulation") and similar legislation in existence or being developed in the United States, Japan and elsewhere to identify and reduce adverse health and safety impacts of chemicals and other substances, could impose restrictions or onerous conditions on the availability or the use of raw materials needed for the Group's manufacturing process. In addition, regulations that impose responsibility on vehicle manufacturers to fund the recovery, recycling and disposal of vehicle parts, including lead acid batteries, at the end of their useful life are becoming increasingly more stringent and applicable worldwide, and the Group expects that production costs will increase as a result of these regulations.

Many of the Group's sites have an extended history of industrial activity. The Group is from time to time required to investigate and remediate contamination at those sites, as well as properties it formerly operated, regardless of whether the Group caused the contamination or the activity causing the contamination was legal at the time it occurred. In connection with contaminated properties, as well as the Group's operations generally, the Group could also be subject to claims by government authorities, individuals and other third parties seeking damages for alleged personal injury, property damage or natural resources damage resulting from hazardous substance contamination or exposure caused by the Group's operations, facilities or products. The discovery of previously unknown contamination, or the occurrence of new contamination, or the imposition of new obligations to investigate or remediate known past contamination at the Group's facilities, could result in substantial unanticipated costs. The Group could be required to establish or substantially increase financial reserves for such obligations or liabilities and, if it fails to accurately predict the amount or timing of such costs, the related adverse impact on its business, financial condition or results of operations could be material.

The Group is subject to risks associated with legal proceedings and governmental investigations, including potential adverse publicity as a result thereof.

The Group is and may be involved from time to time in civil, labour, administrative or tax proceedings arising in the ordinary course of business. It is not possible to predict the potential for, or the ultimate outcomes of, such proceedings, some of which may be unfavourable to the Group. In such cases, the Group may incur costs and any mitigating measures (including provisions taken on the Group's balance

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sheet) adopted to protect against the impact of such costs may not be adequate or sufficient. In addition, adverse publicity surrounding legal proceedings, government investigations or allegations may also harm the Group's reputation and .

The Group could be investigated in relation to anti-competition law matters, the outcome of which could result in fines and related damages.

From time to time, the Group may be subject to antitrust scrutiny and/or investigations in the jurisdictions in which it operates, which could potentially result in legal proceedings being brought against it. Any future adverse ruling in any potential proceedings could subject the Group to administrative penalties and could lead to awards for civil damages, which could be substantial depending on the facts and circumstances. In addition to administrative and civil damages, any adverse outcome of future litigation or proceedings could result in reputational damage for the Group's business, restrict the Group's ability to conduct or expand its operations in certain countries or result in the loss of key employees or customer relationships. Any such adverse development could have material adverse effects on the Group's business, results of operations or financial condition.

For example, in 2014, the Chinese antitrust regulator, the Bureau of Price Supervision and Anti-Monopoly of the National Development and Reform Commission (the "NDRC"), launched an investigation into the pricing practices of a number of automotive companies, in some cases resulting in fines, or pricing reviews. While the Group was not subject to and has not been affected by these reviews, it was indirectly affected by the price decrease resulting therefrom and may directly or indirectly be subject to similar regulatory reviews in the future, which may lead to other price reductions on cars sold in China and have a material adverse effect on the revenue and profits generated by the Group's operations in China and hence overall revenue and profits.

Furthermore, any regulatory action taken, or penalties imposed by, the NDRC or other authorities in China or elsewhere, including and where competition authorities have been increasingly active, may have significant adverse financial and reputational consequences on the Group's business and have a material adverse effect on the Group's results of operations and financial condition.

In any of the geographical markets in which the Group operates, it could be subject to additional tax liabilities.

Evaluating and estimating the Group's provisions and accruals for taxes requires significant judgement. As the Group conducts its business, the final tax determination may be uncertain. The Group operates in multiple geographical markets and its operations in each market are susceptible to additional tax assessments and audits. The Group's collaborations with business partners are similarly susceptible to such tax assessments. Authorities may engage in additional reviews, inquiries and audits that disrupt the Group's operations or challenge the Group's conclusions regarding tax matters. Any resulting tax assessment may be accompanied by a penalty or additional fee for failing to make the initial payment.

The Group's tax rates may be affected by earnings estimation errors, losses in jurisdictions that do not grant a related tax benefit, changes in currency rates, acquisitions, investments, or changes in laws, regulations, or practices. Additionally, government fiscal pressures may increase the likelihood of adverse or aggressive interpretations of tax laws or regulations or the imposition of arbitrary or onerous taxes, interest charges and penalties. Tax assessments may be levied even where the Group considers its practices to be in compliance with tax laws and regulations. Although the Group may challenge such taxes or believe them to be without merit, it may nonetheless be required to pay them. These amounts may be materially different from the Group's expected tax assessments and could additionally result in expropriation of assets, attachment of additional securities, liens, imposition of royalties or new taxes and requirements for local ownership or beneficiation.

The Group's shareholder can exert considerable control over the Issuer.

The Issuer is a subsidiary of Geely Sweden Holdings AB, which is owned by Shanghai Geely Zhaoyuan International Investment Co., Ltd., with ultimate ownership held by Geely. As a result of the ownership structure, Geely is able to significantly influence any matter requiring shareholder's approval, including the election of the Group's directors and approval of significant corporate transactions. Geely may also engage in activities that may conflict with the Group's interests or the interests of the holders of the Notes and, in such events, Noteholders could be disadvantaged by these actions.

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The Group's indebtedness could adversely affect its financial health and ability to withstand adverse developments.

The Group has substantial debt service obligations which could have important consequences for the Group's business and Noteholders, including (see "Business – Funding"):

 making it difficult for the Group to satisfy its obligations with respect to the Notes or other indebtedness;

 increasing its vulnerability to, and reducing its flexibility to respond to, general adverse economic and industry conditions;

 requiring the dedication of a portion of the Group's cash flow from operations to make interest and principal payments on the Group's debt, thereby reducing the availability of such cash flow for other purposes;

 limiting the Group's ability to obtain additional financing to fund working capital, capital investments, acquisitions, debt service requirements, business ventures, or other general corporate purposes;

 limiting the Group's flexibility in planning for, or reacting to, changes in its business, the competitive environment and the industry in which it does business; and

 adversely affecting its competitive position if its debt burden is higher than that of its competitors.

Any of these or other consequences or events could have a material adverse effect on the Group's business, financial condition and results of operations and its ability to satisfy its obligations under the Notes.

In addition, a portion of the Group's debt bears interest at variable rates that are linked to changing market interest rates. As a result, an increase in market interest rates would increase the Group's interest expense and debt service obligations, which would exacerbate the risks associated with its capital structure.

The Issuer, the Guarantor and their subsidiaries may also incur additional indebtedness (secured and unsecured) in the future. If additional debt is incurred, the related risks that the Group faces could intensify.

The Group may not be able to refinance its existing or future debt obligations or renew its credit facilities on acceptable terms or at all.

The Group's financial indebtedness includes different types of corporate debt and credit facilities (see "Business – Funding"), including corporate debt incurred by the Issuer or the Guarantor, credit facilities available to the Issuer or its subsidiaries, debt incurred by the Issuer or its subsidiaries, and credit facilities, working capital facilities and other committed facilities or guarantees thereof available to the Issuer or its subsidiaries. In relation to debt that is repayable with a "bullet" payment on maturity, the Group's ability to make such payments at maturity is uncertain and will depend upon its ability to generate sufficient cash from operations, obtain additional equity or debt financing or sell assets. This ability to obtain equity or debt financing on favourable terms or at all will depend on many factors outside the Group's control, including the then prevailing conditions in the international credit and capital markets. The Group's ability to sell assets and use the proceeds for the refinancing of debt obligations coming due will also depend on many factors outside the Group's control, including the existence of willing purchasers and asset values. At the time the refinancing of each of the Group's existing debt obligations is due, it may not be able to raise equity or refinance the repayment of the debt obligation on terms as favourable as the original loan or sell the property at a price sufficient to repay the relevant debt or at all. If the Group is unable to refinance its existing or future debt obligations or renew its existing or future credit facilities on acceptable terms or at all, this could have material adverse effects on its liquidity, financial condition and results of operations.

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Restrictive covenants in the Group's financing agreements may limit its operations and financial flexibility and adversely impact its future results and financial condition.

Some of the Group's financing agreements and debt arrangements set limits on and/or require it to obtain consents before, among other things, pledging assets as security. In addition, certain financial covenants limit the Group's ability to borrow additional funds or to incur additional liens. However, there can be no assurance that the Group will be able to obtain required lender consents for such activities in the future. If the Group's financial or growth plans require such consents and such consents are not obtained, it may be forced to forgo or alter its plans, which could adversely affect its results of operations and financial condition.

In the event that the Group breaches these covenants, the outstanding amounts due under such financing agreements could become due and payable immediately. A default under one of these financing agreements may also result in cross-defaults under other financing agreements and result in the outstanding amounts under such other financing agreements becoming due and payable immediately. Defaults under one or more of the Group's financing agreements could have a material adverse effect on its results of operations and financial condition.

Risks Related to the Structure of a Particular Issue of Notes

If the Issuer has the right to redeem any Notes at its option, this may limit the market value of the Notes concerned and an investor may not be able to reinvest the redemption proceeds in a manner which achieves a similar effective return.

An optional redemption feature of Notes is likely to limit their market value. During any period when the Issuer may elect to redeem Notes, the market value of those Notes generally will not rise substantially above the price at which they can be redeemed. This also may be true prior to any redemption period. The Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate on the Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time.

Zero Coupon Notes may experience price volatility in response to changes in market interest rates.

Zero Coupon Notes do not pay interest but are issued at a discount from their nominal value. Instead of periodic interest payments, the difference between the redemption price and the issue price constitutes interest income until maturity and reflects the market interest rate. A holder of Zero Coupon Notes is exposed to the risk that the price of such Notes falls as a result of changes in the market interest rate. Prices of Zero Coupon Notes are more volatile than the prices of Fixed Rate Notes and are likely to respond to a greater degree to market interest rate changes than interest bearing notes with a similar maturity

Risks related to Notes which are linked to "benchmarks"

The London Interbank Offered Rate ("LIBOR"), the Euro Interbank Offered Rate ("EURIBOR") and other interest rate or other types of rates and indices which are deemed to be "benchmarks" are the subject of ongoing national and international regulatory reform. Following the implementation of any such potential reforms, the manner of administration of benchmarks may change, with the result that they may perform differently than in the past, or benchmarks could be eliminated entirely, or there could be other consequences which cannot be predicted. For example, on 27 July 2017, the UK Financial Conduct Authority announced that it will no longer persuade or compel banks to submit rates for the calculation of the LIBOR benchmark after 2021 (the "FCA Announcement"). The FCA Announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. The potential elimination of the LIBOR benchmark or any other benchmark, or changes in the manner of administration of any benchmark, could require an adjustment to the terms and conditions, or result in other consequences, in respect of any Notes linked to such benchmark (including but not limited to Floating Rate Notes whose interest rates are linked to LIBOR). Any such consequence could have a material adverse effect on the value of and return on any such Notes.

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If the Issuer has the right to convert the interest rate on any Notes from a fixed rate to a floating rate, or vice versa, this may affect the secondary market and the market value of the Notes concerned.

Fixed/Floating Rate Notes may bear interest at a rate that converts from a fixed rate to a floating rate, or from a floating rate to a fixed rate. Where the Issuer has the right to effect such a conversion, this will affect the secondary market and the market value of the Notes since the Issuer may be expected to convert the rate when it is likely to produce a lower overall cost of borrowing. If the Issuer converts from a fixed rate to a floating rate in such circumstances, the spread on the Fixed/Floating Rate Notes may be less favourable than then prevailing spreads on comparable Floating Rate Notes tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Notes. If the Issuer converts from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than then prevailing rates on its Notes.

Notes which are issued at a substantial discount or premium may experience price volatility in response to changes in market interest rates.

The market values of securities issued at a substantial discount or premium to their principal amount tend to fluctuate more in relation to general changes in interest rates than do prices for conventional interest- bearing securities. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest-bearing securities with comparable maturities.

In respect of any Notes issued as Green Bonds, there can be no assurance that such use of proceeds will be suitable for the investment criteria of an investor.

The Pricing Supplement relating to any specific Tranche of Notes may provide that it will be the Issuer's intention to apply the proceeds from an offer of those Notes specifically for projects and activities that promote certain environmental purposes ("Eligible Projects"). Prospective investors should determine for themselves the relevance of such information for the purpose of any investment in such Notes together with any other investigation such investor deems necessary. In particular, no assurance is given by the Issuer or the Guarantor that the use of such proceeds for any Eligible Projects will satisfy, whether in whole or in part, any present or future investor expectations or requirements as regards any investment criteria or guidelines with which such investor or its investments are required to comply, whether by any present or future applicable law or regulations or by its own by-laws or other governing rules or investment portfolio mandates, in particular with regard to any direct or indirect environmental, sustainability or social impact of any projects or uses, the subject of or related to, any Eligible Projects. Furthermore, it should be noted that there is currently no clearly defined definition (legal, regulatory or otherwise) of, nor market consensus as to what constitutes, a "green" or "sustainable" or an equivalently- labelled project or as to what precise attributes are required for a particular project to be defined as "green" or "sustainable" or such other equivalent label nor can any assurance be given that such a clear definition or consensus will develop over time. Accordingly, no assurance is or can be given to investors that any projects or uses the subject of, or related to, any Eligible Projects will meet any or all investor expectations regarding such "green", "sustainable" or other equivalently-labelled performance objectives or that any adverse environmental, social and/or other impacts will not occur during the implementation of any projects or uses the subject of, or related to, any Eligible Projects.

No assurance or representation is given as to the suitability or reliability for any purpose whatsoever of any opinion or certification of any third party (whether or not solicited by the Issuer) which may be made available in connection with the issue of any Notes and in particular with any Eligible Projects to fulfil any environmental, sustainability, social and/or other criteria. For the avoidance of doubt, any such opinion or certification is not, nor shall be deemed to be, incorporated in and/or form part of this Offering Circular. Any such opinion or certification is not, nor should be deemed to be, a recommendation by the Issuer, the Guarantor or any other person to buy, sell or hold any such Notes. Any such opinion or certification is only current as of the date that opinion was initially issued. Prospective investors must determine for themselves the relevance of any such opinion or certification and/or the information contained therein and/or the provider of such opinion or certification for the purpose of any investment in such Notes. Currently, the providers of such opinions and certifications are not subject to any specific regulatory or other regime or oversight.

In the event that any such Notes are listed or admitted to trading on any dedicated "green", "environmental", "sustainable" or other equivalently-labelled segment of any stock exchange or securities market (whether or not regulated), no representation or assurance is given by the Issuer, the Guarantor or

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any other person that such listing or admission satisfies, whether in whole or in part, any present or future investor expectations or requirements as regards any investment criteria or guidelines with which such investor or its investments are required to comply, whether by any present or future applicable law or regulations or by its own by-laws or other governing rules or investment portfolio mandates, in particular with regard to any direct or indirect environmental, sustainability or social impact of any projects or uses, the subject of or related to, any Eligible Projects. Furthermore, it should be noted that the criteria for any such listings or admission to trading may vary from one stock exchange or securities market to another. Nor is any representation or assurance given or made by the Issuer, the Guarantor or any other person that any such listing or admission to trading will be obtained in respect of any such Notes or, if obtained, that any such listing or admission to trading will be maintained during the life of the Notes.

While it is the intention of the Issuer to apply the proceeds of any Notes so specified for Eligible Projects in, or substantially in, the manner described in this Offering Circular, there can be no assurance that the relevant project(s) or use(s) the subject of, or related to, any Eligible Projects will be capable of being implemented in or substantially in such manner and/or accordance with any timing schedule and that accordingly such proceeds will be totally or partially disbursed for such Eligible Projects. Nor can there be any assurance that such Eligible Projects will be completed within any specified period or at all or with the results or outcome (whether or not related to the environment) as originally expected or anticipated by the Issuer. Any such event or failure by the Issuer will not constitute an Event of Default under the Notes.

Any such event or failure to apply the proceeds of any issue of Notes for any Eligible Projects as aforesaid and/or withdrawal of any such opinion or certification or any such opinion or certification attesting that the Issuer is not complying in whole or in part with any matters for which such opinion or certification is opining or certifying on and/or any such Notes no longer being listed or admitted to trading on any stock exchange or securities market as aforesaid may have a material adverse effect on the value of such Notes and also potentially the value of any other Notes which are intended to finance Eligible Projects and/or result in adverse consequences for certain investors with portfolio mandates to invest in securities to be used for a particular purpose.

Risks Related to the Notes Generally

Corporate benefit and financial assistance laws and other limitations may adversely affect the validity and enforceability of the Guarantee of the Notes.

The Guarantee of the Notes provides Noteholders with a right of recourse against the assets of the Guarantor. The Guarantee of the Notes and the amounts recoverable thereunder will be limited to the maximum amount that can be guaranteed in accordance with mandatory provisions of the Swedish Companies Act regulating transfers of value.

Enforcement of the Guarantee of the Notes against the Guarantor may be subject to certain challenges and defences. These may include those that relate to fraudulent conveyance, financial assistance, distribution of assets (Sw. värdeöverföringar), corporate benefit and regulations or defences affecting the rights of creditors generally. If one or more of these laws and defences are applicable, the Guarantee of the Notes may be unenforceable.

The Notes will be structurally subordinated to the liabilities of non-guarantor subsidiaries.

Not all of the Issuer's subsidiaries will guarantee the Notes. Generally, holders of indebtedness of, and trade creditors of, non-guarantor subsidiaries, are entitled to payments of their claims from the assets of such subsidiaries before these assets are made available for distribution to the Guarantor or the Issuer, as direct or indirect shareholders. Accordingly, in the event that any of the non-guarantor subsidiaries becomes insolvent, liquidates or otherwise reorganises:

 the creditors of the Guarantor and the Issuer (including Noteholders) will have no right to proceed against such subsidiary's assets; and

 creditors of such non-guarantor subsidiary, including trade creditors, will generally be entitled to payment in full from the sale or other disposal of the assets of such subsidiary before the Guarantor and the Issuer, as direct or indirect shareholder, will be entitled to receive any distributions from such subsidiary.

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As at 30 September 2017, the Issuer's non-guarantor subsidiaries had SEK 944 million of debt which would have ranked structurally senior to the Notes and the Guarantee. Under the terms of the Notes, there is no restriction on the ability of non-guarantor subsidiaries to incur additional indebtedness and no requirement that any non-guarantor subsidiaries become Guarantors. Consequently, the Notes may become structurally subordinated to substantial additional indebtedness in the future.

Claims of the secured creditors of the Issuer will have priority with respect to their collateral over the claims of unsecured creditors, such as Noteholders, to the extent of the value of the assets securing such indebtedness.

The Notes will not be secured by any of the Issuer's assets. As a result, claims of the secured creditors of the Issuer will have priority with respect to the assets securing their indebtedness over the claims of Noteholders. As such, the Notes will be effectively subordinated to any existing and future secured indebtedness and other secured obligations of the Issuer (including the obligations under the China Development Bank Facility) to the extent of the value of the assets securing such indebtedness or other obligations.

In the event of any foreclosure, dissolution, winding up, liquidation, reorganisation, administration or other bankruptcy or insolvency proceeding of the Issuer at a time when it has secured obligations, holders of secured indebtedness will have priority claims to the assets of the Issuer that constitute their collateral. Noteholders will participate ratably with all holders of the unsecured indebtedness of the Issuer, and potentially with all its other general creditors, based upon the respective amounts owed to each holder or creditor, in the remaining assets of the Issuer. The claims of Noteholders and other unsecured creditors will also depend on whether there is any value left in the bankruptcy estate besides any secured assets. If any of the secured indebtedness of the Issuer becomes due or the creditors thereunder proceed against the operating assets that secure such indebtedness, the Group's assets remaining after repayment of that secured indebtedness may not be sufficient to repay all amounts owing in respect of the Notes.

As of 30 September 2017, the Group had an aggregate principal amount of SEK 22.9 billion of debt outstanding, of which SEK 760 million was secured indebtedness.

The Notes will include a change of control squeeze-out redemption provision.

If 80 per cent. or more in principal amount of the Notes then outstanding have been redeemed pursuant to Condition 9(f) (Change of Control), the Issuer may, on not less than thirty nor more than sixty days' irrevocable notice to the Noteholders in accordance with Condition 19 (Notices) given within thirty days after the Optional Redemption Date (as defined in "Terms and Conditions"), redeem on a date to be specified in such notice at its option, all (but not some only) of the remaining Notes at their principal amount, together with interest accrued to but excluding the date of redemption.

The conditions of the Notes contain provisions which may permit their modification without the consent of all investors.

The Conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to the majority.

The Conditions of the Notes also provide that the Agent and the Issuer may, without the consent of Noteholders agree to the amendment of any of the provisions of the Notes in order to correct a manifest error.

Notes may be redeemed prior to their stated maturity.

If the Issuer or the Guarantor, as the case may be, has or will become obliged to pay any other additional amounts as provided or referred to in Condition 12 (Taxation) as a result of any change in, or amendment to, the laws or regulations of the Kingdom of Sweden or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date of issue of the first Tranche of the Notes, the Issuer may redeem all outstanding Notes in accordance with the Conditions.

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There is no active trading market for the Notes.

Notes issued under the Programme will be new securities which may not be widely distributed and for which there is currently no active trading market (unless in the case of any particular Tranche, such Tranche is to be consolidated with and form a single Series with a Tranche of Notes which is already issued). If the Notes are traded after their initial issuance, they may trade at a discount to their initial offering price, depending upon prevailing interest rates, the market for similar securities, general economic conditions and the financial condition of the Issuer. Although applications have been made for the Notes issued under the Programme to be admitted to listing on the Official List and to trading on the Euro MTF Market of the Luxembourg Stock Exchange, there is no assurance that such applications will be accepted, that any particular Tranche of Notes will be so admitted or that an active trading market will develop. Accordingly, there is no assurance as to the development or liquidity of any trading market for any particular Tranche of Notes.

Because Notes in global form are held by or on behalf of Euroclear and Clearstream, Luxembourg, investors will have to rely on their procedures for transfer and payment with the Issuer and/or the Guarantor.

Notes issued under the Programme may be represented by one or more Global Notes. Such Global Notes will be deposited with a common depositary or common safekeeper for Euroclear and Clearstream, Luxembourg. Except in the circumstances described in the relevant Global Note, investors will not be entitled to receive definitive Notes. Euroclear and Clearstream, Luxembourg will maintain records of the beneficial interests in the Global Notes. While the Notes are represented by one or more Global Notes, investors will be able to trade their beneficial interests only through Euroclear and Clearstream, Luxembourg.

While the Notes are represented by one or more global Notes the Issuer and the Guarantor will discharge their payment obligations under the Notes by making payments to the common depositary or common safekeeper for Euroclear and Clearstream, Luxembourg for distribution to its account holders. A holder of a beneficial interest in a Global Note must rely on the procedures of Euroclear and Clearstream, Luxembourg to receive payments under the relevant Notes. The Issuer and the Guarantor have no responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the Global Notes.

Holders of beneficial interests in the Global Notes will not have a direct right to vote in respect of the relevant Notes. Instead, such holders will be permitted to act only to the extent that they are enabled by Euroclear and Clearstream, Luxembourg to appoint appropriate proxies. Similarly, holders of beneficial interests in the Global Notes will not have a direct right under the Global Notes to take enforcement action against the Issuer or the Guarantor in the event of a default under the relevant Notes but will have to rely upon their rights under the Deed of Covenant.

Notes in New Global Note and New Safekeeping Structure form.

The New Global Note and New Safekeeping Structure form has been introduced to allow for the possibility of debt instruments being issued and held in a manner which will permit them to be recognised as eligible collateral for monetary policy of the central banking system for the euro (the "Eurosystem") and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. However in any particular case such recognition will depend upon satisfaction of the Eurosystem eligibility criteria at the relevant time. Investors should make their own assessment as to whether the Notes meet such Eurosystem eligibility criteria.

Minimum Specified Denomination and higher integral multiples.

In relation to any issue of Notes in bearer form which have a denomination consisting of a minimum Specified Denomination (as defined below) plus a higher integral multiple of another smaller amount, it is possible that such Notes may be traded in amounts in excess of the minimum Specified Denomination that are not integral multiples of such Specified Denomination. In such case a Noteholder who, as a result of trading such amount, holds a principal amount not an integral amount of such Specified Denomination may not receive a Note in definitive form corresponding to such holding (should definitive Notes be printed) and would need to purchase a principal amount of Notes such that its holding amounts to an integral multiple of such Specified Denomination.

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If an investor holds Notes which are not denominated in the investor's home currency, he will be exposed to movements in exchange rates adversely affecting the value of his holding. In addition, the imposition of exchange controls in relation to any Notes could result in an investor not receiving payments on those Notes.

The Issuer will pay principal and interest on the Notes in the Specified Currency. This presents certain risks relating to currency conversions if an investor's financial activities are denominated principally in a currency or currency unit (the "Investor's Currency") other than the Specified Currency. These include the risk that exchange rates may significantly change (including changes due to devaluation of the Specified Currency or revaluation of the Investor's Currency) and the risk that authorities with jurisdiction over the Investor's Currency may impose or modify exchange controls. An appreciation in the value of the Investor's Currency relative to the Specified Currency would decrease (1) the Investor's Currency- equivalent yield on the Notes, (2) the Investor's Currency equivalent value of the principal payable on the Notes and (3) the Investor's Currency equivalent market value of the Notes.

Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate or the ability of the Issuer to make payments in respect of the Notes. As a result, investors may receive less interest or principal than expected, or no interest or principal.

The value of Fixed Rate Notes may be adversely affected by movements in market interest rates.

Investment in Fixed Rate Notes involves the risk that subsequent changes in market interest rates may adversely affect the value of the Fixed Rate Notes.

Credit ratings assigned to the Programme or any Notes may not reflect all the risks associated with an investment in those Notes.

As of the date of this Offering Circular, the Programme has been assigned a rating of BB+ by Standard & Poor's and (P)Ba2 by Moody's. Tranches of Notes to be issued under the Programme may be rated or unrated. Where a Tranche of Notes is rated, the applicable rating(s) will be specified in the relevant Pricing Supplement. Such rating will not necessarily be the same as the rating(s) assigned to the Issuer, the Guarantor or to Notes already issued. One or more independent credit rating agencies may also assign credit ratings to the Notes, which may not necessarily be the same ratings as the Issuer rating described above or any rating(s) assigned to the Guarantor or any Notes already issued. Ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time.

In general, European regulated investors are restricted under the CRA Regulation from using credit ratings for regulatory purposes, unless such ratings are issued by a credit rating agency ("CRA") established in the E.U. and registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to transitional provisions that apply in certain circumstances whilst the registration application is pending. Such general restriction will also apply in the case of credit ratings issued by non-E.U. credit rating agencies, unless the relevant credit ratings are endorsed by an EU registered CRA or the relevant non-E.U. rating agency is certified in accordance with the CRA Regulation (and such endorsement action or certification, as the case may be, has not been withdrawn or suspended). The list of registered and certified rating agencies published by the European Securities and Markets Authority ("ESMA") on its website in accordance with the CRA Regulation is not conclusive evidence of the status of the relevant rating agency included in such list, as there may be delays between certain supervisory measures being taken against a relevant rating agency and the publication of the updated ESMA list. Certain information with respect to the credit rating agencies and ratings is set out on the cover of this Offering Circular.

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INFORMATION INCORPORATED BY REFERENCE

The following information shall be deemed to be incorporated in, and to form part of, this Offering Circular:

1. the audited consolidated financial statements (including the auditors' report thereon and notes thereto) of the Group in respect of the years ended 31 December 2016 and 31 December 2015 (set out on pages 82 to 131 and 59 to 107, respectively, of the 2016 and 2015 annual reports of the Group); and

2. the unaudited consolidated financial statements of the Group in respect of the nine months ended 30 September 2017 and 30 September 2016 (set out on pages: (i) 3, 5 to 11 and 13 to 19 and (ii) 3 and 6 to 17 respectively, of the reports on the third quarter 2017 and 2016 of the Group).

Copies of the documents specified above as containing information incorporated by reference in this Offering Circular may be inspected, free of charge, at http://www.volvocars.com/intl/about/our- company/investor-relations and will be published on the website of the Luxembourg Stock Exchange at www.bourse.lu. Any information contained in any of the documents specified above which is not incorporated by reference in this Offering Circular is either not relevant to investors or is covered elsewhere in this Offering Circular.

Cross Reference Table:

Volvo Car AB annual financial statements

Annual Report 2016 Annual Report 2015

Consolidated Income Statements Page 83 Page 59 Consolidated Balance Sheets Page 85 Page 61 Consolidated Statement of Cash Page 87 Page 63 Flows Notes Pages 88 to 121 Pages 64 to 97 Audit Report Page 130 to 131 Page 106

Volvo Car AB interim financial statements

Third Quarter Report 2017 Third Quarter Report 2016

Consolidated Income Statements Page 13 Page 14 Consolidated Balance Sheets Page 15 Page 15 Consolidated Statement of Cash Page 17 Page 16 Flows

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GENERAL DESCRIPTION OF THE PROGRAMME

The following information is derived from, and should be read in conjunction with, the full text of this Offering Circular. You should read the whole document and not just rely on the overview information, which should be read as an introduction to this Offering Circular. Any decision to invest in Notes issued under the Programme should be based on consideration of this Offering Circular as a whole.

Words and expressions defined in "Terms and Conditions of the Notes" below or elsewhere in this Offering Circular have the same meanings in this overview.

Issuer: ...... Volvo Car AB (publ)

Guarantor: ...... Volvo Car Corporation

Programme Limit: ...... Up to EUR3,000,000,000 (or the equivalent in other currencies at the date of issue) aggregate principal amount of Notes outstanding at any one time.

Risk Factors: ...... Investing in Notes issued under the Programme involves certain risks. The principal risk factors that may affect the ability of the Issuer and the Guarantor to fulfil its obligations under the Notes are discussed under "Risk Factors" below.

Arranger: ...... Citigroup Global Markets Limited

Dealers: ...... Citigroup Global Markets Limited and Deutsche Bank AG, London Branch, ING Bank N.V., London Branch, J.P. Morgan Securities plc and any other Dealer appointed from time to time by the Issuer either generally in respect of the Programme or in relation to a particular Tranche of Notes.

Fiscal Agent: ...... HSBC Bank plc

Registrar: ...... HSBC Bank plc

Paying Agents and HSBC Bank plc Transfer Agents: ......

Pricing Supplement or Notes issued under the Programme may be issued either (1) pursuant to Drawdown Offering this Offering Circular and relevant Pricing Supplement or (2) pursuant to Circular: ...... a Drawdown Offering Circular. The terms and conditions applicable to any particular Tranche of Notes will be the Terms and Conditions of the Notes as completed to the extent described in the relevant Pricing Supplement or, as the case may be, as supplemented, amended and/or replaced to the extent described in the relevant Drawdown Offering Circular.

Listing and Trading: ...... Application has been made to the Luxembourg Stock Exchange for Notes to be admitted to trading on the Luxembourg Stock Exchange's Euro MTF Market and to be listed on the Official List of the Luxembourg Stock Exchange. Application may be made to trade and list Notes on such other stock exchange as may be agreed between the Issuer and the relevant Dealer or Notes may be unlisted, as specified in the relevant Pricing Supplement.

Clearing Systems: ...... Euroclear Bank SA/NV ("Euroclear") and/or Clearstream Banking, S.A. ("Clearstream, Luxembourg") and, in relation to any Tranche, such other clearing system as may be agreed between the Issuer, the Issuing and Paying Agent and the relevant Dealer(s).

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Method of Issue: ...... The Notes will be issued in Series. Each Series may be issued in one or more Tranches on the same or different issue dates. The specific terms of each Tranche (which will be completed, where necessary, with the relevant terms and conditions and, save in respect of the issue date, issue price, first payment of interest and principal amount of the Tranche, will be identical to the terms of other Tranches of the same Series) will be completed in the Pricing Supplement.

Forms of Notes: ...... Notes may be issued in bearer form or in registered form.

Each Tranche of Bearer Notes will initially be in the form of either a Temporary Global Note or a Permanent Global Note, in each case as specified in the relevant Pricing Supplement. Each Global Note which is not intended to be issued in a new global note form (a "Classic Global Note"), as specified in the relevant Pricing Supplement, will be deposited on or around the relevant issue date with a depositary or a common depositary for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and each Global Note which is intended to be issued in new global note form (a "New Global Note"), as specified in the relevant Pricing Supplement, will be deposited on or around the relevant issue date with a common safekeeper for Euroclear and/or Clearstream, Luxembourg. Each Temporary Global Note will be exchangeable for a Permanent Global Note or, if so specified in the relevant Pricing Supplement, for Definitive Notes. If the TEFRA D Rules are specified in the relevant Pricing Supplement as applicable, certification as to non-U.S. beneficial ownership will be a condition precedent to any exchange of an interest in a Temporary Global Note or receipt of any payment of interest in respect of a Temporary Global Note. Each Permanent Global Note will be exchangeable for Definitive Notes in accordance with its terms. Definitive Notes will, if interest-bearing, have Coupons attached.

Each Tranche of Notes represented by a Global Registered Note will either be: (a) in the case of a Note which is not to be held under the new safekeeping structure ("New Safekeeping Structure" or "NSS"), registered in the name of a common depositary (or its nominee) for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and the relevant Global Registered Note will be deposited on or about the issue date with the common depositary; or (b) in the case of a Note to be held under the New Safekeeping Structure, be registered in the name of a common safekeeper (or its nominee) for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and the relevant Global Registered Note will be deposited on or about the issue date with the common safekeeper for Euroclear and/or Clearstream, Luxembourg.

Currencies: ...... Subject to compliance with all relevant laws, regulations and directives, Notes may be issued in any currency agreed between the Issuer and the relevant Dealer(s).

Status: ...... The Notes will constitute direct, unconditional, unsubordinated and (subject to Condition 5 (Negative Pledge)) unsecured obligations of the Issuer which will at all times rank pari passu among themselves and at least pari passu with all other present and future unsecured obligations of the Issuer, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application.

Guarantee: ...... The due and punctual payment of all sums from time to time payable by the Issuer in respect of the Notes will be guaranteed by the Guarantor as set out in a deed of guarantee dated 9 November 2017 (the "Deed of

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Guarantee").

Issue Price: ...... Notes may be issued at any price on a fully paid basis, as specified in the relevant Pricing Supplement. The price and amount of Notes to be issued under the Programme will be determined by the Issuer and the relevant Dealer(s) at the time of issue in accordance with prevailing market conditions.

Maturities: ...... Any maturity, subject, in relation to specific currencies, to compliance with all applicable legal and/or regulatory and/or central bank requirements.

Where Notes have a maturity of less than one year and either (a) the issue proceeds are received by the Issuer in the United Kingdom or (b) the activity of issuing the Notes is carried on from an establishment maintained by the Issuer in the United Kingdom, such Notes must: (i) have a minimum redemption value of £100,000 (or its equivalent in other currencies) and be issued only to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses; or (ii) be issued in other circumstances which do not constitute a contravention of section 19 of the Financial Services and Markets Act 2000, as amended (the "FSMA") by the Issuer.

Redemption: ...... Notes may be redeemable at par or such other Redemption Amount as may be specified in the relevant Pricing Supplement.

Optional Redemption: ...... The Pricing Supplement issued in respect of each issue of Notes will state whether such Notes may be redeemed prior to their stated maturity at the option of the Issuer (either in whole or in part) and/or the Noteholders, and if so the terms applicable to such redemption.

Following the occurrence of a Change of Control, the Noteholders will be entitled to request the Issuer to redeem or, at the Issuer's option, procure the purchase of their Notes, as more fully set out in Condition 9(f) (Redemption and Purchase – Change of Control Put Option).

If specified in the relevant Pricing Supplement, the Issuer will have the option to redeem the Notes, in whole or in part, at any time or from time to time, prior to their Maturity Date, at the Make-Whole Redemption Amount. See Condition 9(c) (Redemption and Purchase – Redemption at the option of the Issuer).

Tax Redemption: ...... Except as described in "Optional Redemption (including Make-Whole Redemption)" above, early redemption will only be permitted for tax reasons as described in Condition 9(b) (Redemption and Purchase— Redemption for tax reasons).

Interest: ...... Notes may be interest-bearing or non-interest bearing. Interest (if any) may accrue at a fixed rate or a floating rate and the method of calculating interest may vary between the issue date and the maturity date of the relevant Series.

Denominations: ...... Notes will be in such denominations as may be specified in the relevant Pricing Supplement save that (i) in the case of any Notes which are to be offered to the public in an EEA Member State in circumstances which would otherwise require the publication of a prospectus under the Prospectus Directive, the minimum specified denomination shall be €100,000 (or its equivalent in any other currency as at the date of issue of

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the Notes). Subject thereto, Notes will be issued in such denominations as may be specified in the relevant Pricing Supplement, subject to compliance with all applicable legal and/or regulatory and/or central bank requirements.

Negative Pledge: ...... The Notes will have the benefit of a negative pledge as described in Condition 5 (Negative Pledge).

Cross Default: ...... The Notes will have the benefit of a cross default provision, as described in Condition 13(c) (Cross-default of the Issuer, Guarantor or Material Subsidiary).

Taxation: ...... All payments of principal and interest in respect of Notes and the Coupons by or on behalf of the Issuer or the Guarantor shall be made free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the Kingdom of Sweden or any political subdivision therein or authority therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the Issuer (or as the case may be) shall (subject as provided in Condition 12 (Taxation)) pay such additional amounts as will result in the receipt by the Noteholders and the Couponholders after such withholding or by them had no such withholding or deduction been required, all as described in "Terms and Conditions of the Notes – Taxation".

Rating: ...... Notes issued under the Programme may be rated or unrated. Where an issue of Notes is rated, its rating will be specified in the applicable Pricing Supplement or Drawdown Offering Circular. A rating is not a recommendation to buy, sell or hold securities and may be subject to supervision, change or withdrawal at any time from the assigning rating agency.

Governing Law: ...... English law

Selling Restrictions: ...... For a description of certain restrictions on offers, sales and deliveries of Notes and on the distribution of offering material in the United States of America, the United Kingdom, the EEA, the Kingdom of Sweden and Japan, see "Subscription and Sale" below.

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PRICING SUPPLEMENTS AND DRAWDOWN OFFERING CIRCULARS

In this section the expression "necessary information" means, in relation to any Tranche of Notes, the information necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer and the Guarantor and of the rights attaching to the Notes. In relation to the different types of Notes which may be issued under the Programme the Issuer and the Guarantor have included in this Offering Circular all of the necessary information except for information relating to the Notes which is not known at the date of this Offering Circular and which can only be determined at the time of an individual issue of a Tranche of Notes.

Any information relating to the Notes which is not included in this Offering Circular and which is required in order to complete the necessary information in relation to a Tranche of Notes will be contained either in the relevant Pricing Supplement or in a Drawdown Offering Circular.

For a Tranche of Notes which is the subject of the Pricing Supplement, the Pricing Supplement will, for the purposes of that Tranche only, complete this Offering Circular and must be read in conjunction with this Offering Circular. The terms and conditions applicable to any particular Tranche of Notes which is the subject of the Pricing Supplement are the Conditions described in the relevant Pricing Supplement as supplemented to the extent described in the relevant Pricing Supplement.

The terms and conditions applicable to any particular Tranche of Notes which is the subject of a Offering Circular will be the Conditions as supplemented, amended and/or replaced to the extent described in the relevant Offering Circular. In the case of a Tranche of Notes which is the subject of a Offering Circular, each reference in this Offering Circular to information being specified or identified in the relevant Pricing Supplement shall be read and construed as a reference to such information being specified or identified in the relevant Offering Circular unless the context requires otherwise.

Each Offering Circular will be constituted either (1) by a single document containing the necessary information relating to the Issuer and the Guarantor and the relevant Notes or (2) by a registration document containing the necessary information relating to the Issuer and the Guarantor, a securities note containing the necessary information relating to the relevant Notes and, if necessary, a summary note.

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FORMS OF THE NOTES

Bearer Notes

Each Tranche of Notes in bearer form ("Bearer Notes") will initially be in the form of either a temporary global note in bearer form (the "Temporary Global Note"), without interest coupons, or a permanent global note in bearer form (the "Permanent Global Note"), without interest coupons, in each case as specified in the relevant Pricing Supplement. Each Temporary Global Note or, as the case may be, Permanent Global Note (each a "Global Note") which is not intended to be issued in new global note ("NGN") form (each, a "CGN"), as specified in the relevant Pricing Supplement, will be deposited on or around the issue date of the relevant Tranche of the Notes with a depositary or a common depositary for Euroclear Bank SA/NV as operator of the Euroclear System ("Euroclear") and/or Clearstream Banking, S.A., Luxembourg ("Clearstream, Luxembourg") and/or any other relevant clearing system and each Global Note which is intended to be issued in NGN form, as specified in the relevant Pricing Supplement, will be deposited on or around the issue date of the relevant Tranche of the Notes with a common safekeeper for Euroclear and/or Clearstream, Luxembourg.

On 13 June 2006 the European Central Bank (the "ECB") announced that Notes in NGN form are in compliance with the "Standards for the use of E.U. securities settlement systems in ESCB credit operations" of the central banking system for the euro (the "Eurosystem"), provided that certain other criteria are fulfilled. At the same time the ECB also announced that arrangements for Notes in NGN form will be offered by Euroclear and Clearstream, Luxembourg as of 30 June 2006 and that debt securities in global bearer form issued through Euroclear and Clearstream, Luxembourg after 31 December 2006 will only be eligible as collateral for Eurosystem operations if the NGN form is used.

Whether or not the Notes are intended to be held in a manner which would allow Eurosystem eligibility will be set out in the relevant Pricing Supplement. Note that the designation "Yes" in the relevant Pricing Supplement means that the Notes are intended upon issue to be deposited with one of the international central securities depositories ("ICSDs") as common safekeeper and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon satisfaction of the Eurosystem eligibility criteria. Where the designation is specified as "No" in the relevant Pricing Supplement, should the Eurosystem eligibility criteria be amended in the future such that the Notes are capable of meeting them, the Notes may then be deposited with one of the ICSDs as common safekeeper. Note that this does not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.

In the case of each Tranche of Bearer Notes, the relevant Pricing Supplement will also specify whether United States Treasury Regulation §1.163-5(c)(2)(i)(C) (the "TEFRA C Rules") or United States Treasury Regulation §1.163 5(c)(2)(i)(D) (the "TEFRA D Rules") are applicable in relation to the Notes or, if the Notes do not have a maturity of more than 365 days, that neither the TEFRA C Rules nor the TEFRA D Rules are applicable.

Temporary Global Note exchangeable for Permanent Global Note

If the relevant Pricing Supplement specifies the form of Notes as being "Temporary Global Note exchangeable for a Permanent Global Note", then the Notes will initially be in the form of a Temporary Global Note which will be exchangeable, in whole or in part, for interests in a Permanent Global Note, without interest coupons, not earlier than 40 days after the issue date of the relevant Tranche of the Notes upon certification as to non-U.S. beneficial ownership. No payments will be made under the Temporary Global Note unless exchange for interests in the Permanent Global Note is improperly withheld or refused. In addition, interest payments in respect of the Notes cannot be collected without such certification of non-U.S. beneficial ownership.

Whenever any interest in the Temporary Global Note is to be exchanged for an interest in a Permanent Global Note, the Issuer shall procure (in the case of first exchange) the delivery of a Permanent Global Note to the bearer of the Temporary Global Note or (in the case of any subsequent exchange) an increase in the principal amount of the Permanent Global Note in accordance with its terms against:

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(i) presentation and (in the case of final exchange) presentation and surrender of the Temporary Global Note to or to the order of the Fiscal Agent; and

(ii) receipt by the Fiscal Agent of a certificate or certificates of non-U.S. beneficial ownership.

The principal amount of Notes represented by the Permanent Global Note shall be equal to the aggregate of the principal amounts specified in the certificates of non-U.S. beneficial ownership provided, however, that in no circumstances shall the principal amount of Notes represented by the Permanent Global Note exceed the initial principal amount of Notes represented by the Temporary Global Note.

If:

(a) the Permanent Global Note has not been delivered or the principal amount thereof increased by 5.00 p.m. (London time) on the seventh day after the bearer of the Temporary Global Note has requested exchange of an interest in the Temporary Global Note for an interest in a Permanent Global Note; or

(b) the Temporary Global Note (or any part thereof) has become due and payable in accordance with the Terms and Conditions of the Notes or the date for final redemption of the Temporary Global Note has occurred and, in either case, payment in full of the amount of principal falling due with all accrued interest thereon has not been made to the bearer of the Temporary Global Note in accordance with the terms of the Temporary Global Note on the due date for payment, then the Temporary Global Note (including the obligation to deliver a Permanent Global Note) will become void at 5.00 p.m. (London time) on such seventh day (in the case of (a) above) or at 5.00 p.m. (London time) on such due date (in the case of (b) above) and the bearer of the Temporary Global Note will have no further rights thereunder (but without prejudice to the rights which the bearer of the Temporary Global Note or others may have under the Deed of Covenant).

The Permanent Global Note will become exchangeable, in whole but not in part only and at the request of the bearer of the Permanent Global Note, for Bearer Notes in definitive form ("Definitive Notes"):

(a) on the expiry of such period of notice as may be specified in the Pricing Supplement; or

(b) at any time, if so specified in the Pricing Supplement; or

(c) if the Pricing Supplement specifies "in the limited circumstances described in the Permanent Global Note", then if either of the following events occurs:

(i) Euroclear or Clearstream, Luxembourg or any other relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business; or

(ii) any of the circumstances described in Condition 13 (Events of Default) occurs.

Whenever the Permanent Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the Pricing Supplement), in an aggregate principal amount equal to the principal amount of Notes represented by the Permanent Global Note to the bearer of the Permanent Global Note against the surrender of the Permanent Global Note to or to the order of the Fiscal Agent within 30 days of the bearer requesting such exchange.

If:

(a) Definitive Notes have not been duly delivered by 5.00 p.m. (London time) on the thirtieth day after the bearer has requested exchange of the Permanent Global Note for Definitive Notes; or

(b) the Permanent Global Note was originally issued in exchange for part only of a Temporary Global Note representing the Notes and such Temporary Global Note becomes void in accordance with its terms; or

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(c) the Permanent Global Note (or any part thereof) has become due and payable in accordance with the Terms and Conditions of the Notes or the date for final redemption of the Permanent Global Note has occurred and, in either case, payment in full of the amount of principal falling due with all accrued interest thereon has not been made to the bearer in accordance with the terms of the Permanent Global Note on the due date for payment, then the Permanent Global Note (including the obligation to deliver Definitive Notes) will become void at 5.00 p.m. (London time) on such thirtieth day (in the case of (a) above) or at 5.00 p.m. (London time) on the date on which such Temporary Global Note becomes void (in the case of (b) above) or at 5.00 p.m. (London time) on such due date ((c) above) and the bearer of the Permanent Global Note will have no further rights thereunder (but without prejudice to the rights which the bearer of the Permanent Global Note or others may have under the Deed of Covenant).

Temporary Global Note exchangeable for Definitive Notes

If the relevant Pricing Supplement specifies the form of Notes as being "Temporary Global Note exchangeable for Definitive Notes" and also specifies that the TEFRA C Rules are applicable or that neither the TEFRA C Rules or the TEFRA D Rules are applicable, then the Notes will initially be in the form of a Temporary Global Note which will be exchangeable, in whole but not in part, for Definitive Notes not earlier than 40 days after the issue date of the relevant Tranche of the Notes.

If the relevant Pricing Supplement specifies the form of Notes as being "Temporary Global Note exchangeable for Definitive Notes" and also specifies that the TEFRA D Rules are applicable, then the Notes will initially be in the form of a Temporary Global Note which will be exchangeable, in whole or in part, for Definitive Notes not earlier than 40 days after the issue date of the relevant Tranche of the Notes upon certification as to non-U.S. beneficial ownership. Interest payments in respect of the Notes cannot be collected without such certification of non-U.S. beneficial ownership.

Whenever the Temporary Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the relevant Pricing Supplement), in an aggregate principal amount equal to the principal amount of the Temporary Global Note to the bearer of the Temporary Global Note against the surrender of the Temporary Global Note to or to the order of the Fiscal Agent within 30 days of the bearer requesting such exchange.

If:

(a) Definitive Notes have not been duly delivered by 5.00 p.m. (London time) on the thirtieth day after the bearer has requested exchange of the Temporary Global Note for Definitive Notes; or

(b) the Temporary Global Note (or any part thereof) has become due and payable in accordance with the Terms and Conditions of the Notes or the date for final redemption of the Temporary Global Note has occurred and, in either case, payment in full of the amount of principal falling due with all accrued interest thereon has not been made to the bearer in accordance with the terms of the Temporary Global Note on the due date for payment, then the Temporary Global Note (including the obligation to deliver Definitive Notes) will become void at 5.00 p.m. (London time) on such thirtieth day (in the case of (a) above) or at 5.00 p.m. (London time) on such due date (in the case of (b) above) and the bearer of the Temporary Global Note will have no further rights thereunder (but without prejudice to the rights which the bearer of the Temporary Global Note or others may have under the Deed of Covenant).

Permanent Global Note exchangeable for Definitive Notes

If the relevant Pricing Supplement specifies the form of Notes as being "Permanent Global Note exchangeable for Definitive Notes", then the Notes will initially be in the form of a Permanent Global Note which will be exchangeable in whole, but not in part, for Definitive Notes:

(a) on the expiry of such period of notice as may be specified in the relevant Pricing Supplement; or

(b) at any time, if so specified in the relevant Pricing Supplement; or

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(c) if the relevant Pricing Supplement specifies "in the limited circumstances described in the Permanent Global Note", then if either of the following events occurs:

(i) Euroclear or Clearstream, Luxembourg or any other relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business; or

(ii) any of the circumstances described in Condition 13 (Events of Default) occurs.

Whenever the Permanent Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the Pricing Supplement), in an aggregate principal amount equal to the principal amount of Notes represented by the Permanent Global Note to the bearer of the Permanent Global Note against the surrender of the Permanent Global Note to or to the order of the Fiscal Agent within 30 days of the bearer requesting such exchange.

If:

(a) Definitive Notes have not been duly delivered by 5.00 p.m. (London time) on the thirtieth day after the bearer has requested exchange of the Permanent Global Note for Definitive Notes; or

(b) the Permanent Global Note (or any part thereof) has become due and payable in accordance with the Terms and Conditions of the Notes or the date for final redemption of the Permanent Global Note has occurred and, in either case, payment in full of the amount of principal falling due with all accrued interest thereon has not been made to the bearer in accordance with the terms of the Permanent Global Note on the due date for payment, then the Permanent Global Note (including the obligation to deliver Definitive Notes) will become void at 5.00 p.m. (London time) on such thirtieth day (in the case of (a) above) or at 5.00 p.m. (London time) on such due date ((b) above) and the bearer of the Permanent Global Note will have no further rights thereunder (but without prejudice to the rights which the bearer of the Permanent Global Note or others may have under the Deed of Covenant).

Rights under Deed of Covenant

Under the Deed of Covenant, persons shown in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system as being entitled to an interest in a Temporary Global Note or a Permanent Global Note which becomes void will acquire directly against the Issuer all those rights to which they would have been entitled if, immediately before the Temporary Global Note or Permanent Global Note became void, they had been the holders of Definitive Notes in an aggregate principal amount equal to the principal amount of Notes they were shown as holding in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system.

Terms and Conditions applicable to the Notes

The terms and conditions applicable to any Definitive Note will be endorsed on that Note and will consist of the terms and conditions set out under "Terms and Conditions of the Notes" below and the provisions of the relevant Pricing Supplement which supplement, amend and/or replace those terms and conditions.

The terms and conditions applicable to any Note in global form will differ from those terms and conditions which would apply to the Note were it in definitive form to the extent described under "Overview of Provisions Relating to the Notes while in Global Form" below.

Legend Concerning United States Persons

In the case of any Tranche of Bearer Notes having a maturity of more than 365 days, the Notes in global form, the Notes in definitive form and any Coupons and Talons appertaining thereto will bear a legend to the following effect:

"Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code."

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Registered Notes

Each Tranche of Notes in registered form ("Registered Notes") will be represented by either individual Note Certificates in registered form ("Individual Note Certificates") or a global Note in registered form (a "Global Registered Note"), in each case as specified in the relevant Pricing Supplement.

In a press release dated 22 October 2008, "Evolution of the custody arrangement for international debt securities and their eligibility in Eurosystem credit operations", the ECB announced that it has assessed the new holding structure and custody arrangements for registered notes which the ICSDs had designed in cooperation with market participants and that Notes to be held under the new structure (the "New Safekeeping Structure" or "NSS") would be in compliance with the "Standards for the use of E.U. securities settlement systems in ESCB credit operations" of the central banking system for the euro (the "Eurosystem"), subject to the conclusion of the necessary legal and contractual arrangements. The press release also stated that the new arrangements for Notes to be held in NSS form will be offered by Euroclear and Clearstream, Luxembourg as of 30 June 2010 and that registered debt securities in global registered form issued through Euroclear and Clearstream, Luxembourg after 30 September 2010 will only be eligible as collateral in Eurosystem operations if the New Safekeeping Structure is used.

Each Note represented by a Global Registered Note will either be: (a) in the case of a Note which is not to be held under the NSS, registered in the name of a common depositary (or its nominee) for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and the relevant Global Registered Note will be deposited on or about the issue date with the common depositary; or (b) in the case of a Note to be held under the New Safekeeping Structure, be registered in the name of a common safekeeper (or its nominee) for Euroclear and/or Clearstream, Luxembourg and the relevant Global Registered Note will be deposited on or about the issue date with the common safekeeper for Euroclear and/or Clearstream, Luxembourg.

Whether or not the Notes are intended to be held in a manner which would allow Eurosystem eligibility will be set out in the relevant Pricing Supplement. Note that the designation "Yes" in the relevant Pricing Supplement means that the Notes are intended upon issue to be deposited with one of the ICSDs as common safekeeper and registered in the name of a nominee of one of the ICSDs acting as common safekeeper, and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon satisfaction of the Eurosystem eligibility criteria. Where the designation is specified as "No" in the relevant Pricing Supplement, should the Eurosystem eligibility criteria be amended in the future such that the Notes are capable of meeting them, the Notes may then be deposited with one of the ICSDs as common safekeeper and registered in the name of a nominee of one of the ICSDs acting as common safekeeper. Note that this does not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.

If the relevant Pricing Supplement specifies the form of Notes as being "Individual Note Certificates", then the Notes will at all times be represented by Individual Note Certificates issued to each Noteholder in respect of their respective holdings.

Global Registered Note Exchangeable for Individual Note Certificates

If the relevant Pricing Supplement specifies the form of Notes as being "Global Registered Note exchangeable for Individual Note Certificates", then the Notes will initially be represented by one or more Global Registered Notes each of which will be exchangeable in whole, but not in part, for Individual Note Certificates:

(i) on the expiry of such period of notice as may be specified in the relevant Pricing Supplement; or

(ii) at any time, if so specified in the relevant Pricing Supplement; or

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(iii) if the relevant Pricing Supplement specifies "in the limited circumstances described in the Global Registered Note", then:

(a) if Euroclear, Clearstream, Luxembourg or any other relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business; and

(b) in any case, if any of the circumstances described in Condition 13 (Events of Default) occurs.

Whenever a Global Registered Note is to be exchanged for Individual Note Certificates, the Issuer shall procure that Individual Note Certificates will be issued in an aggregate principal amount equal to the principal amount of the Global Registered Note within five business days of the delivery, by or on behalf of the registered holder of the Global Registered Note to the Registrar of such information as is required to complete and deliver such Individual Note Certificates against the surrender of the Global Registered Note at the specified office of the Registrar.

Such exchange will be effected in accordance with the provisions of the Agency Agreement and the regulations concerning the transfer and registration of Notes scheduled to the Agency Agreement and, in particular, shall be effected without charge to any holder, but against such indemnity as the Registrar may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such exchange.

Terms and Conditions applicable to the Notes

The terms and conditions applicable to any Individual Note Certificate will be endorsed on that Individual Note Certificate and will consist of the terms and conditions set out under "Terms and Conditions of the Notes" below and the provisions of the relevant Pricing Supplement which complete those terms and conditions.

The terms and conditions applicable to any Global Registered Note will differ from those terms and conditions which would apply to the Note were it in definitive form to the extent described under "Overview of Provisions Relating to the Notes while in Global Form" below.

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OVERVIEW OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM

Clearing System Accountholders

In relation to any Tranche of Notes represented by a Global Note in bearer form, references in the Terms and Conditions of the Notes to "Noteholder" are references to the bearer of the relevant Global Note which, for so long as the Global Note is held by a depositary or a common depositary, in the case of a CGN, or a common safekeeper, in the case of an NGN for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, will be that depositary or common depositary or, as the case may be, common safekeeper.

In relation to any Tranche of Notes represented by one or more Global Registered Notes, references in the Terms and Conditions of the Notes to "Noteholder" are references to the person in whose name the relevant Global Registered Note is for the time being registered in the Register which for so long as the Global Registered Note is held by or on behalf of a depositary or a common depositary or a common safekeeper for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, will be that depositary or common depositary or common safekeeper or a nominee for that depositary or common depositary or common safekeeper.

Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg and/or any other relevant clearing system as being entitled to an interest in a Global Note or a Global Registered Note (each an "Accountholder") must look solely to Euroclear, Clearstream, Luxembourg and/or such other relevant clearing system (as the case may be) for such Accountholder's share of each payment made by the Issuer or the Guarantor, as applicable, to the holder of such Global Note or Global Registered Note and in relation to all other rights arising under such Global Note or Global Registered Note. The extent to which, and the manner in which, Accountholders may exercise any rights arising under a Global Note or Global Registered Note will be determined by the respective rules and procedures of Euroclear and Clearstream, Luxembourg and any other relevant clearing system from time to time. For so long as the relevant Notes are represented by a Global Note or Global Registered Note, Accountholders shall have no claim directly against the Issuer or the Guarantor, as applicable, in respect of payments due under the Notes and such obligations of the Issuer and the Guarantor will be discharged by payment to the holder of such Global Note or Global Registered Note.

Transfers of Interests in Global Notes and Global Registered Notes

Transfers of interests in Global Notes and Global Registered Notes within Euroclear and Clearstream, Luxembourg or any other relevant clearing system will be in accordance with their respective rules and operating procedures. None of the Issuer, the Guarantor, the Registrar, the Dealers or the Agents will have any responsibility or liability for any aspect of the records of any Euroclear and Clearstream, Luxembourg or any other relevant clearing system or any of their respective participants relating to payments made on account of beneficial ownership interests in a Global Note or Global Registered Note or for maintaining, supervising or reviewing any of the records of Euroclear and Clearstream, Luxembourg or any other relevant clearing system or the records of their respective participants relating to such beneficial ownership interests.

For a further description of restrictions on the transfer of Notes, see "Subscription and Sale".

Conditions Applicable to Global Notes

Each Global Note and Global Registered Note will contain provisions which modify the Terms and Conditions of the Notes as they apply to the Global Note or Global Registered Note. The following is a summary of certain of those provisions:

Payments: All payments in respect of the Global Note or Global Registered Note which, according to the Terms and Conditions of the Notes, require presentation and/or surrender of a Note, Note Certificate or Coupon will be made against presentation and (in the case of payment of principal in full with all interest accrued thereon) surrender of the Global Note or Global Registered Note to or to the order of any Paying Agent and will be effective to satisfy and discharge the corresponding liabilities of the Issuer and the Guarantor in respect of the Notes. On each occasion on which a payment of principal or interest is made in respect of the Global Note, the Issuer shall procure that in respect of a CGN the payment is noted in a

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schedule thereto and in respect of an NGN the payment is entered pro rata in the records of Euroclear and Clearstream, Luxembourg.

Payment Business Day: in the case of a Global Note or a Global Registered Note, shall be: if the currency of payment is euro, any day which is a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre; or, if the currency of payment is not euro, any day which is a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre.

Payment Record Date: Each payment in respect of a Global Registered Note will be made to the person shown as the Noteholder in the Register at the close of business (in the relevant clearing system) on the Clearing System Business Day before the due date for such payment (the "Record Date") where "Clearing System Business Day" means a day on which each clearing system for which the Global Registered Note is being held is open for business.

Exercise of put option: In order to exercise the option contained in Condition 9(e) (Redemption at the option of Noteholders) the bearer of a Permanent Global Note or the holder of a Global Registered Note must, within the period specified in the Conditions for the deposit of the relevant Note and put notice, give written notice of such exercise to the Principal Paying Agent specifying the principal amount of Notes in respect of which such option is being exercised. Any such notice will be irrevocable and may not be withdrawn.

Partial exercise of call option: In connection with an exercise of the option contained in Condition 9(c) (Redemption at the option of the Issuer) in relation to some only of the Notes, the Permanent Global Note or Global Registered Note may be redeemed in part in the principal amount specified by the Issuer in accordance with the Conditions and the Notes to be redeemed will not be selected as provided in the Conditions but in accordance with the rules and procedures of Euroclear and/or Clearstream, Luxembourg (to be reflected in the records of Euroclear and/or Clearstream, Luxembourg as either a pool factor or a reduction in principal amount, at their discretion).

Notices: Notwithstanding Condition 19 (Notices), while all the Notes are represented by a Permanent Global Note (or by a Permanent Global Note and/or a Temporary Global Note) or a Global Registered Note and the Permanent Global Note is (or the Permanent Global Note and/or the Temporary Global Note are), or the Global Registered Note is, deposited with a depositary or a common depositary for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system or a common safekeeper, notices to Noteholders may be given by delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and, in any case, such notices shall be deemed to have been given to the Noteholders in accordance with Condition 19 (Notices) on the date of delivery to Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system except that so long as the Notes are listed on the Luxembourg Stock Exchange's Euro MTF Market and the rules of that exchange so require, notices shall also be published either on the website of the Luxembourg Stock Exchange (www.bourse.lu) or in a leading newspaper having general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Whilst any of the Notes held by a Noteholder are represented by a Global Note, notices to be given by such Noteholder may be given by such Noteholder to the Fiscal Agent or Registrar (as applicable) through Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, and otherwise in such manner as the Fiscal Agent or the Registrar, as the case may be, and/or Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, as the case may be, may approve for this purpose.

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TERMS AND CONDITIONS OF THE NOTES

The following is the text of the terms and conditions which, as completed by the relevant Pricing Supplement, will be endorsed on each Note in definitive form issued under the Programme. The terms and conditions applicable to any Note in global form will differ from those terms and conditions which would apply to the Note were it in definitive form to the extent described under "Overview of Provisions Relating to the Notes while in Global Form" above.

1. INTRODUCTION

(a) Programme: Volvo Car AB (publ) (the "Issuer") has established a Euro Medium Term Note Programme (the "Programme") for the issuance of up to EUR3,000,000,000 (or the equivalent in other currencies at the date of issue) in aggregate principal amount of EUR notes (the "Notes") guaranteed by Volvo Car Corporation, the ("Guarantor").

(b) Pricing Supplement: Notes issued under the Programme are issued in series (each a "Series") and each Series may comprise one or more tranches (each a "Tranche") of Notes. Each Tranche is the subject of a pricing supplement (the "Pricing Supplement") which supplements, amends or replaces these terms and conditions (the "Conditions"). The terms and conditions applicable to any particular Tranche of Notes are these Conditions as supplemented, amended and/or replaced by the relevant Pricing Supplement. In the event of any inconsistency between these Conditions and the relevant Pricing Supplement, the relevant Pricing Supplement shall prevail.

(c) Agency Agreement: The Notes are the subject of an issue and paying agency agreement dated 9 November 2017 (the "Agency Agreement") between the Issuer, the Guarantor, HSBC Bank plc as fiscal agent (the "Fiscal Agent", which expression includes any successor fiscal agent appointed from time to time in connection with the Notes), HSBC Bank plc as registrar (the "Registrar", which expression includes any successor registrar appointed from time to time in connection with the Notes), the paying agents named therein (together with the Fiscal Agent, the "Paying Agents", which expression includes any successor or additional paying agents appointed from time to time in connection with the Notes) and the transfer agents named therein (together with the Registrar, the "Transfer Agents", which expression includes any successor or additional transfer agents appointed from time to time in connection with the Notes). In these Conditions references to the "Agents" are to the Paying Agents and the Transfer Agents and any reference to an "Agent" is to any one of them.

(d) Deed of Guarantee: The Notes are the subject of a deed of guarantee dated 9 November 2017 (the "Deed of Guarantee") entered into by the Guarantor.

(e) Deed of Covenant: The Notes may be issued in bearer form ("Bearer Notes"), or in registered form ("Registered Notes"). Registered Notes are constituted by a deed of covenant dated 9 November 2017 (the "Deed of Covenant") entered into by the Issuer.

(f) The Notes: All subsequent references in these Conditions to "Notes" are to the Notes which are the subject of the relevant Pricing Supplement. Copies of the relevant Pricing Supplement are available for viewing, and copies may be obtained from, the registered office of the Issuer at Avd. 50090 HB3S, 405 31 Göteborg, Sweden.

(g) Summaries: Certain provisions of these Conditions are summaries of the Agency Agreement, the Deed of Guarantee and the Deed of Covenant and are subject to their detailed provisions. Noteholders and the holders of the related interest coupons, if any, (the "Couponholders" and the "Coupons", respectively) are bound by, and are deemed to have notice of, all the provisions of the Agency Agreement, the Deed of Guarantee and the Deed of Covenant applicable to them. Copies of the Agency Agreement, the Deed of Guarantee and the Deed of Covenant are available for inspection by Noteholders during normal business hours at the Specified Offices of each of the Agents, the initial Specified Offices of which are set out below.

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2. INTERPRETATION

(a) Definitions: In these Conditions the following expressions have the following meanings:

"Accrual Yield" has the meaning given in the relevant Pricing Supplement;

"Additional Business Centre(s)" means the city or cities specified as such in the relevant Pricing Supplement;

"Additional Financial Centre(s)" means the city or cities specified as such in the relevant Pricing Supplement;

"Benchmark Security" has the meaning given it in Condition 9(c) (Redemption at the option of the Issuer);

"Business Day" means:

(a) in relation to any sum payable in euro, a TARGET Settlement Day and a day on which commercial banks and foreign exchange markets settle payments generally in each (if any) Additional Business Centre; and

(b) in relation to any sum payable in a currency other than euro, a day on which commercial banks and foreign exchange markets settle payments generally in London, in the Principal Financial Centre of the relevant currency and in each (if any) Additional Business Centre;

"Business Day Convention", in relation to any particular date, has the meaning given in the relevant Pricing Supplement and, if so specified in the relevant Pricing Supplement, may have different meanings in relation to different dates and, in this context, the following expressions shall have the following meanings:

(a) "Following Business Day Convention" means that the relevant date shall be postponed to the first following day that is a Business Day;

(b) "Modified Following Business Day Convention" or "Modified Business Day Convention" means that the relevant date shall be postponed to the first following day that is a Business Day unless that day falls in the next calendar month in which case that date will be the first preceding day that is a Business Day;

(c) "Preceding Business Day Convention" means that the relevant date shall be brought forward to the first preceding day that is a Business Day;

(d) "FRN Convention", "Floating Rate Convention" or "Eurodollar Convention" means that each relevant date shall be the date which numerically corresponds to the preceding such date in the calendar month which is the number of months specified in the relevant Pricing Supplement as the Specified Period after the calendar month in which the preceding such date occurred provided, however, that:

(i) if there is no such numerically corresponding day in the calendar month in which any such date should occur, then such date will be the last day which is a Business Day in that calendar month;

(ii) if any such date would otherwise fall on a day which is not a Business Day, then such date will be the first following day which is a Business Day unless that day falls in the next calendar month, in which case it will be the first preceding day which is a Business Day; and

(iii) if the preceding such date occurred on the last day in a calendar month which was a Business Day, then all subsequent such dates will be the last day which is a Business Day in the calendar month which is the

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specified number of months after the calendar month in which the preceding such date occurred; and

(e) "No Adjustment" means that the relevant date shall not be adjusted in accordance with any Business Day Convention;

"Calculation Agent" means the Fiscal Agent or such other Person specified in the relevant Pricing Supplement as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) and/or such other amount(s) as may be specified in the relevant Pricing Supplement;

"Calculation Amount" has the meaning given in the relevant Pricing Supplement;

"Change of Control" has the meaning given to it in Condition 9(f) (Change of Control Put Option);

"Change of Control Period" has the meaning given to it in Condition 9(f) (Change of Control Put Option);

"Change of Control Put Event Notice" has the meaning given to it in Condition 9(f) (Change of Control Put Option);

"Change of Control Put Option Notice" has the meaning given to it in Condition 9(f) (Change of Control Put Option);

"Change of Control Put Period" has the meaning given to it in Condition 9(f) (Change of Control Put Option);

"Coupon Sheet" means, in respect of a Note, a coupon sheet relating to the Note;

"Day Count Fraction" means, in respect of the calculation of an amount for any period of time (the "Calculation Period"), such day count fraction as may be specified in these Conditions or the relevant Pricing Supplement and:

(a) if "Actual/Actual (ICMA)" is so specified, means:

(i) where the Calculation Period is equal to or shorter than the Regular Period during which it falls, the actual number of days in the Calculation Period divided by the product of (1) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year; and

(ii) where the Calculation Period is longer than one Regular Period, the sum of:

(A) the actual number of days in such Calculation Period falling in the Regular Period in which it begins divided by the product of (1) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year; and

(B) the actual number of days in such Calculation Period falling in the next Regular Period divided by the product of (a) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year;

(iii) if "Actual/Actual (ISDA)" is so specified, means the actual number of days in the Calculation Period divided by 365 (or, if any portion of the Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365);

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(iv) if "Actual/365 (Fixed)" is so specified, means the actual number of days in the Calculation Period divided by 365;

(v) if "Actual/360" is so specified, means the actual number of days in the Calculation Period divided by 360;

(vi) if "30/360" is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows

360Y  Y  30M  M  D  D  Day Count Fraction = 2 1 2 1 2 1 360

where:

"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;

"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;

"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;

"M2" is the calendar month, expressed as number, in which the day immediately following the last day included in the Calculation Period falls;

"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and

"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30";

(vii) if "30E/360" or "Eurobond Basis" is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:

360Y  Y  30M  M  D  D  Day Count Fraction = 2 1 2 1 2 1 360

where:

"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;

"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;

"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;

"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;

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"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and

"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31, in which case D2 will be 30; and

if "30E/360 (ISDA)" is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:

360Y  Y  30M  M  D  D  Day Count Fraction = 2 1 2 1 2 1 360

where:

"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;

"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;

"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;

"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;

"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and

"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30,

provided, however, that in each such case the number of days in the Calculation Period is calculated from and including the first day of the Calculation Period to but excluding the last day of the Calculation Period;

"Early Redemption Amount (Tax)" means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Pricing Supplement;

"Early Termination Amount" means, in respect of any Note, its principal amount or such other amount as may be specified in these Conditions or the relevant Pricing Supplement;

"EBITDA" means income before income tax, financial income, financial expenses, and depreciation and amortisation;

"EURIBOR" means, in respect of any specified currency and any specified period, the interest rate benchmark known as the Euro zone interbank offered rate which is calculated and published by a designated distributor (currently Thomson Reuters) in

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accordance with the requirements from time to time of the European Money Markets Institute (or any other person which takes over the administration of that rate);

"Extraordinary Resolution" means a resolution passed at a Meeting duly convened and held in accordance with the provisions for meetings of Noteholders scheduled to the Agency Agreement by a majority of not less than three quarters of the votes cast;

"Final Redemption Amount" means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Pricing Supplement;

"First Interest Payment Date" means the date specified in the relevant Pricing Supplement;

"Fixed Coupon Amount" has the meaning given in the relevant Pricing Supplement;

"Group" means the Issuer and its Subsidiaries taken as a whole;

"Guarantee" means, in relation to any Indebtedness of any Person, any obligation of another Person to pay such Indebtedness including (without limitation):

(a) any obligation to purchase such Indebtedness;

(b) any obligation to lend money, to purchase or subscribe shares or other securities or to purchase assets or services in order to provide funds for the payment of such Indebtedness;

(c) any indemnity against the consequences of a default in the payment of such Indebtedness; and

(d) any other agreement to be responsible for such Indebtedness;

"Guarantee of the Notes" means the guarantee of the Notes given by the Guarantor in the Deed of Guarantee;

"Holder", in the case of Bearer Notes, has the meaning given in Condition 3(b) (Form, Denomination, Title and Transfer—Title to Bearer Notes) and, in the case of Registered Notes, has the meaning given in Condition 3(d) (Form, Denomination, Title and Transfer—Title to Registered Notes);

"IFRS" means the International Financial Reporting Standards as adopted by the European Union;

"Indebtedness" means any indebtedness of any Person for money borrowed or raised including (without limitation) any indebtedness for or in respect of:

(a) amounts raised by acceptance under any acceptance credit facility;

(b) amounts raised under any note purchase facility;

(c) the amount of any liability in respect of leases or hire purchase contracts which would, in accordance with applicable law and generally accepted accounting principles, be treated as finance or capital leases;

(d) the amount of any liability in respect of any purchase price for assets or services the payment of which is deferred for a period in excess of 90 days; and

(e) amounts raised under any other similar transaction (including, without limitation, any forward sale or purchase agreement) having the commercial effect of a borrowing;

"Interest Amount" means, in relation to a Note and an Interest Period, the amount of interest payable in respect of that Note for that Interest Period;

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"Interest Commencement Date" means the Issue Date of the Notes or such other date as may be specified as the Interest Commencement Date in the relevant Pricing Supplement;

"Interest Determination Date" has the meaning given in the relevant Pricing Supplement;

"Interest Payment Date" means the First Interest Payment Date and any other date or dates specified as such in, or determined in accordance with the provisions of, the relevant Pricing Supplement and, if a Business Day Convention is specified in the relevant Pricing Supplement:

(a) as the same may be adjusted in accordance with the relevant Business Day Convention; or

(b) if the Business Day Convention is the FRN Convention, Floating Rate Convention or Eurodollar Convention and an interval of a number of calendar months is specified in the relevant Pricing Supplement as being the Specified Period, each of such dates as may occur in accordance with the FRN Convention, Floating Rate Convention or Eurodollar Convention at such Specified Period of calendar months following the Interest Commencement Date (in the case of the first Interest Payment Date) or the previous Interest Payment Date (in any other case);

"Interest Period" means each period beginning on (and including) the Interest Commencement Date or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date;

"ISDA Definitions" means the 2006 ISDA Definitions (as amended and updated as at the date of issue of the first Tranche of the Notes of the relevant Series (as specified in the relevant Pricing Supplement) as published by the International Swaps and Derivatives Association, Inc.);

"Issue Date" has the meaning given in the relevant Pricing Supplement;

"LIBOR" means, in respect of any specified currency and any specified period, the interest rate benchmark known as the London interbank offered rate which is calculated and published by a designated distributor (currently Thomson Reuters) in accordance with the requirements from time to time of ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate);

"Make Whole Margin" has the meaning given to it in Condition 9(c) (Redemption at the option of the Issuer);

"Make Whole Redemption Amount" has the meaning given to it in Condition 9(c) (Redemption at the option of the Issuer);

"Margin" has the meaning given in the relevant Pricing Supplement;

"Material Subsidiary" means at any relevant time a Subsidiary of the Issuer:

(a) whose total consolidated (or, if applicable, unconsolidated) assets (excluding intercompany loans, intercompany payables, intercompany receivables and intercompany unrealised gains and losses in inventories) represent not less than 5 per cent. of the total consolidated assets of the Issuer, or whose gross consolidated EBITDA (or, if applicable, unconsolidated) represents not less than 5 per cent. of the gross consolidated EBITDA of the Issuer, in each case as determined by reference to the most recent publicly available annual or interim financial statements of the Issuer prepared in accordance with IFRS and the latest financial statements of the Subsidiary determined in accordance with IFRS; or

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(b) to which is transferred all or substantially all of the assets and undertakings of a Subsidiary which immediately prior to such transfer is a Material Subsidiary;

"Maturity Date" has the meaning given in the relevant Pricing Supplement;

"Maximum Redemption Amount" has the meaning given in the relevant Pricing Supplement;

"Meeting" means a meeting of Noteholders (whether originally convened or resumed following an adjournment);

"Minimum Redemption Amount" has the meaning given in the relevant Pricing Supplement;

"Noteholder", in the case of Bearer Notes, has the meaning given in Condition 3(b) (Form, Denomination, Title and Transfer—Title to Bearer Notes) and, in the case of Registered Notes, has the meaning given in Condition 3(d) (Form, Denomination, Title and Transfer—Title to Registered Notes);

"Optional Redemption Amount (Call)" means, in respect of any Note, its principal amount, the Make Whole Redemption Amount, or such other amount as may be specified in the relevant Pricing Supplement;

"Optional Redemption Amount (Put)" means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Pricing Supplement;

"Optional Redemption Date (Call)" has the meaning given in the relevant Pricing Supplement;

"Optional Redemption Date (Put)" has the meaning given in the relevant Pricing Supplement;

"Par Redemption Date" has the meaning given to it in Condition 9(c) (Redemption at the option of the Issuer);

"Participating Member State" means a Member State of the European Union which adopts the euro as its lawful currency in accordance with the Treaty;

"Payment Business Day" means:

(a) if the currency of payment is euro, any day which is:

(i) a day on which banks in the relevant place of presentation are open for presentation and payment of bearer debt securities and for dealings in foreign currencies; and

(ii) in the case of payment by transfer to an account, a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre; or

(b) if the currency of payment is not euro, any day which is:

(i) a day on which banks in the relevant place of presentation are open for presentation and payment of bearer debt securities and for dealings in foreign currencies; and

(ii) in the case of payment by transfer to an account, a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre;

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"Permitted Restructuring" means:

(a) any disposal by any Material Subsidiary of all or any part of its business, undertaking or assets, to the Issuer or any other Subsidiary of the Issuer;

(b) any solvent amalgamation, consolidation or merger of a Material Subsidiary with the Issuer or any other Subsidiary of the Issuer; or

(c) any amalgamation, consolidation, restructuring, merger or reorganisation on terms previously approved by an Extraordinary Resolution;

"Permitted Security Interest" means:

(a) a Security Interest created in connection with any asset-backed securities which are issued in order to finance any vehicle leasing or financing arrangements entered into by the Issuer, the Guarantor or any member of the Group; or

(b) any Security Interest created over any asset of any company which becomes a Subsidiary after the Issue Date of the first Tranche of the Notes, where such Security Interest is created prior to the date on which the company becomes a Subsidiary, provided that:

(i) such Security Interest was not created in contemplation of the acquisition of such company; and

(ii) the principal amount secured was not increased in contemplation of or since the acquisition (or proposed acquisition) of that company;

"Person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality).

"Principal Financial Centre" means, in relation to any currency, the principal financial centre for that currency provided, however, that:

(a) in relation to euro, it means the principal financial centre of such Member State of the European Communities as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent; and

(b) in relation to dollars, it means either Wellington or Auckland as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent;

"Put Option Notice" means a notice which must be delivered to a Paying Agent by any Noteholder wanting to exercise a right to redeem a Note at the option of the Noteholder;

"Put Option Receipt" means a receipt issued by a Paying Agent to a depositing Noteholder upon deposit of a Note with such Paying Agent by any Noteholder wanting to exercise a right to redeem a Note at the option of the Noteholder;

"Rate of Interest" means the rate or rates (expressed as a percentage per annum) of interest payable in respect of the Notes specified in the relevant Pricing Supplement or calculated or determined in accordance with the provisions of these Conditions and/or the relevant Pricing Supplement;

"Rating Event" has the meaning given to it in Condition 9(f) (Change of Control Put Option);

"Rating Agency" means any of Standard & Poor's Credit Market Services Europe Limited, Moody's Deutschland GmbH or Fitch Ratings Limited and their successors and/or any other rating agency of equivalent standing notified by the Issuer to the Noteholders in accordance with Condition 19 (Notices).

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"Redemption Amount" means, as appropriate, the Final Redemption Amount, the Early Redemption Amount (Tax), the Optional Redemption Amount (Call), the Optional Redemption Amount (Put), the Early Termination Amount or such other amount in the nature of a redemption amount as may be specified in the relevant Pricing Supplement;

"Reference Banks" means four major banks selected by the Calculation Agent in the market that is most closely connected with the Reference Rate;

"Reference Price" has the meaning given in the relevant Pricing Supplement;

"Reference Rate" means EURIBOR or LIBOR as specified in the relevant Pricing Supplement in respect of the currency and period specified in the relevant Pricing Supplement;

"Reference Time" has the meaning given to it in Condition 9(c) (Redemption at the option of the Issuer);

"Regular Period" means:

(a) in the case of Notes where interest is scheduled to be paid only by means of regular payments, each period from and including the Interest Commencement Date to but excluding the first Interest Payment Date and each successive period from and including one Interest Payment Date to but excluding the next Interest Payment Date;

(b) in the case of Notes where, apart from the first Interest Period, interest is scheduled to be paid only by means of regular payments, each period from and including a Regular Date falling in any year to but excluding the next Regular Date, where "Regular Date" means the day and month (but not the year) on which any Interest Payment Date falls; and

(c) in the case of Notes where, apart from one Interest Period other than the first Interest Period, interest is scheduled to be paid only by means of regular payments, each period from and including a Regular Date falling in any year to but excluding the next Regular Date, where "Regular Date" means the day and month (but not the year) on which any Interest Payment Date falls other than the Interest Payment Date falling at the end of the irregular Interest Period.

"Relevant Date" means, in relation to any payment, whichever is the later of (a) the date on which the payment in question first becomes due and (b) if the full amount payable has not been received in the Principal Financial Centre of the currency of payment by the Fiscal Agent on or prior to such due date, the date on which (the full amount having been so received) notice to that effect has been given to the Noteholders;

"Relevant Financial Centre" has the meaning given in the relevant Pricing Supplement;

"Relevant Indebtedness" means any Indebtedness which is in the form of or represented by any bond, note, debenture, debenture stock, loan stock, certificate or other instrument which is, or is intended by the Issuer to be, listed, quoted or traded on any stock exchange or in any securities market (including, without limitation, any over- the-counter market);

"Relevant Screen Page" means the page, section or other part of a particular information service (including, without limitation, Reuters) specified as the Relevant Screen Page in the relevant Pricing Supplement, or such other page, section or other part as may replace it on that information service or such other information service, in each case, as may be nominated by the Person providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to the Reference Rate;

"Relevant Time" has the meaning given in the relevant Pricing Supplement;

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"Reserved Matter" means any proposal to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes, to alter the method of calculating the amount of any payment in respect of the Notes or the date for any such payment, to change the currency of any payment under the Notes or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution;

"Security Interest" means any mortgage, charge, pledge, lien or other security interest including, without limitation, anything analogous to any of the foregoing under the laws of any jurisdiction;

"Specified Currency" has the meaning given in the relevant Pricing Supplement;

"Specified Denomination(s)" has the meaning given in the relevant Pricing Supplement;

"Specified Office" has the meaning given in the Agency Agreement;

"Specified Period" has the meaning given in the relevant Pricing Supplement;

"Subsidiary" means a subsidiary within the meaning of Chapter 1, Section 11 of the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551) or its equivalent from time to time).

"Talon" means a talon for further Coupons;

"TARGET2" means the Trans-European Automated Real-Time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007;

"TARGET Settlement Day" means any day on which TARGET2 is open for the settlement of payments in euro;

"Treaty" means the Treaty of the Functioning of the European Union, as amended; and

"Zero Coupon Note" means a Note specified as such in the relevant Pricing Supplement;

(b) Interpretation: In these Conditions:

(i) if the Notes are Zero Coupon Notes, references to Coupons and Couponholders are not applicable;

(ii) if Talons are specified in the relevant Pricing Supplement as being attached to the Notes at the time of issue, references to Coupons shall be deemed to include references to Talons;

(iii) if Talons are not specified in the relevant Pricing Supplement as being attached to the Notes at the time of issue, references to Talons are not applicable;

(iv) any reference to principal shall be deemed to include the Redemption Amount, any additional amounts in respect of principal which may be payable under Condition 12 (Taxation), any premium payable in respect of a Note and any other amount in the nature of principal payable pursuant to these Conditions;

(v) any reference to interest shall be deemed to include any additional amounts in respect of interest which may be payable under Condition 12 (Taxation) and any other amount in the nature of interest payable pursuant to these Conditions;

(vi) references to Notes being "outstanding" shall be construed in accordance with the Agency Agreement;

(vii) if an expression is stated in Condition 2(a) (Definitions) to have the meaning given in the relevant Pricing Supplement, but the relevant Pricing Supplement

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gives no such meaning or specifies that such expression is "not applicable" then such expression is not applicable to the Notes; and

(viii) any reference to the Agency Agreement or the Deed of Guarantee shall be construed as a reference to the Agency Agreement or the Deed of Guarantee, as the case may be as amended and/or supplemented up to and including the Issue Date of the Notes.

3. FORM, DENOMINATION, TITLE AND TRANSFER

(a) Bearer Notes: Bearer Notes are in the Specified Denomination(s) with Coupons and, if specified in the relevant Pricing Supplement, Talons attached at the time of issue. In the case of a Series of Bearer Notes with more than one Specified Denomination, Bearer Notes of one Specified Denomination will not be exchangeable for Bearer Notes of another Specified Denomination.

(b) Title to Bearer Notes: Title to Bearer Notes and the Coupons will pass by delivery. In the case of Bearer Notes, "Holder" means the holder of such Bearer Note and "Noteholder" and "Couponholder" shall be construed accordingly.

(c) Registered Notes: Registered Notes are in the Specified Denomination(s), which may include a minimum denomination specified in the relevant Pricing Supplement and higher integral multiples of a smaller amount specified in the relevant Pricing Supplement.

(d) Title to Registered Notes: The Registrar will maintain the register in accordance with the provisions of the Agency Agreement. A certificate (each, a "Note Certificate") will be issued to each Holder of Registered Notes in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying number which will be recorded in the Register. In the case of Registered Notes, "Holder" means the person in whose name such Registered Note is for the time being registered in the Register (or, in the case of a joint holding, the first named thereof) and "Noteholder" shall be construed accordingly.

(e) Ownership: The Holder of any Note or Coupon shall (except as otherwise required by law) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing thereon or, in the case of Registered Notes, on the Note Certificate relating thereto (other than the endorsed form of transfer) or any notice of any previous loss or theft thereof) and no Person shall be liable for so treating such Holder. No person shall have any right to enforce any term or condition of any Note under the Contracts (Rights of Third Parties) Act 1999.

(f) Transfers of Registered Notes: Subject to paragraphs (i) (Closed periods) and (j) (Regulations concerning transfers and registration) below, a Registered Note may be transferred upon surrender of the relevant Note Certificate, with the endorsed form of transfer duly completed, at the Specified Office of the Registrar or any Transfer Agent, together with such evidence as the Registrar or (as the case may be) such Transfer Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided, however, that a Registered Note may not be transferred unless the principal amount of Registered Notes transferred and (where not all of the Registered Notes held by a Holder are being transferred) the principal amount of the balance of Registered Notes not transferred are Specified Denominations. Where not all the Registered Notes represented by the surrendered Note Certificate are the subject of the transfer, a new Note Certificate in respect of the balance of the Registered Notes will be issued to the transferor.

(g) Registration and delivery of Note Certificates: Within five business days of the surrender of a Note Certificate in accordance with paragraph (f) (Transfers of Registered Notes) above, the Registrar will register the transfer in question and deliver a new Note Certificate of a like principal amount to the Registered Notes transferred to each relevant

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Holder at its Specified Office or (as the case may be) the Specified Office of any Transfer Agent or (at the request and risk of any such relevant Holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant Holder. In this paragraph, "business day" means a day on which commercial banks are open for general business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Transfer Agent has its Specified Office.

(h) No charge: The transfer of a Registered Note will be effected without charge by or on behalf of the Issuer or the Registrar or any Transfer Agent but against such indemnity as the Registrar or (as the case may be) such Transfer Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer.

(i) Closed periods: Noteholders may not require transfers to be registered during the period of 15 days ending on the due date for any payment of principal or interest in respect of the Registered Notes.

(j) Regulations concerning transfers and registration: All transfers of Registered Notes and entries on the Register are subject to the detailed regulations concerning the transfer of Registered Notes scheduled to the Agency Agreement. The regulations may be changed by the Issuer with the prior written approval of the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who requests in writing a copy of such regulations.

4. STATUS AND GUARANTEE

(a) The Notes constitute direct, unconditional, unsubordinated and (subject to Condition 5 (Negative Pledge)) unsecured obligations of the Issuer which will at all times rank pari passu among themselves and at least pari passu with all other present and future unsecured obligations of the Issuer, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application.

(b) Guarantee of the Notes: The Guarantor has in the Deed of Guarantee unconditionally and irrevocably guaranteed the due and punctual payment of all sums from time to time payable by the Issuer in respect of the Notes. This Guarantee of the Notes constitutes direct, general, unsecured, unsubordinated and unconditional obligations of the Guarantor which will at all times rank at least pari passu with all other present and future unsecured obligations of the Guarantor, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application.

5. NEGATIVE PLEDGE

So long as any Note remains outstanding, neither the Issuer nor the Guarantor shall, and the Issuer and the Guarantor shall procure that no Material Subsidiary will, create or permit to subsist any Security Interest, other than a Permitted Security Interest, upon the whole or any part of their present or future business, undertaking, assets or revenues (including any uncalled capital) to secure any Relevant Indebtedness or Guarantee of Relevant Indebtedness without (a) at the same time or prior thereto securing the Notes equally and rateably therewith or (b) providing such other security for the Notes as may be approved by an Extraordinary Resolution of Noteholders.

6. FIXED RATE NOTE PROVISIONS

(a) Application: This Condition 6 (Fixed Rate Note Provisions) is applicable to the Notes only if the Fixed Rate Note Provisions are specified in the relevant Pricing Supplement as being applicable.

(b) Accrual of interest: The Notes bear interest from the Interest Commencement Date at the Rate of Interest payable in arrear on each Interest Payment Date, subject as provided in Condition 10 (Payments—Bearer Notes). Each Note will cease to bear interest from the due date for final redemption unless, upon due presentation, payment of the Redemption Amount is improperly withheld or refused, in which case it will continue to bear interest in accordance with this Condition 6 (after as well as before judgment) until

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whichever is the earlier of (i) the day on which all sums due in respect of such Note up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Fiscal Agent has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment).

(c) Fixed Coupon Amount: The amount of interest payable in respect of each Note for any Interest Period shall be the relevant Fixed Coupon Amount and, if the Notes are in more than one Specified Denomination, shall be the relevant Fixed Coupon Amount in respect of the relevant Specified Denomination.

(d) Calculation of interest amount: The amount of interest payable in respect of each Note for any period for which a Fixed Coupon Amount is not specified shall be calculated by applying the Rate of Interest to the Calculation Amount, multiplying the product by the relevant Day Count Fraction, rounding the resulting figure to the nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards) and multiplying such rounded figure by a fraction equal to the Specified Denomination of such Note divided by the Calculation Amount. For this purpose a "sub-unit" means, in the case of any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, in the case of euro, means one cent.

(e) Notes accruing interest otherwise than a Fixed Coupon Amount: This Condition 6(e) shall apply to Notes which are Fixed Rate Notes only where the Pricing Supplement for such Notes specify that the Interest Payment Dates are subject to adjustment in accordance with the Business Day Convention specified therein. The relevant amount of interest payable in respect of each Note for any Interest Period for such Notes shall be calculated by the Calculation Agent by multiplying the product of the Rate of Interest and the Calculation Amount by the relevant Day Count Fraction and rounding the resultant figure to the nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards). The Calculation Agent shall cause the relevant amount of interest and the relevant Interest Payment Date to be notified to the Issuer, the Paying Agents, the Registrar (in the case of Registered Notes) and the Noteholders in accordance with Condition 19 (Notices) and, if the Notes are listed on a stock exchange and the rules of such exchange so requires, such exchange as soon as possible after their determination or calculation but in no event later than the fourth Business day thereafter or, if earlier in the case of notification to the stock exchange, the time required by the rules of the relevant stock exchange.

7. FLOATING RATE NOTE PROVISIONS

(a) Application: This Condition 7 (Floating Rate Note Provisions) is applicable to the Notes only if the Floating Rate Note Provisions are specified in the relevant Pricing Supplement as being applicable.

(b) Accrual of interest: The Notes bear interest from the Interest Commencement Date at the Rate of Interest payable in arrear on each Interest Payment Date, subject as provided in Condition 10 (Payments—Bearer Notes). Each Note will cease to bear interest from the due date for final redemption unless, upon due presentation, payment of the Redemption Amount is improperly withheld or refused, in which case it will continue to bear interest in accordance with this Condition (after as well as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Note up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Fiscal Agent has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment).

(c) Screen Rate Determination: If Screen Rate Determination is specified in the relevant Pricing Supplement as the manner in which the Rate(s) of Interest is/are to be determined, the Rate of Interest applicable to the Notes for each Interest Period will be determined by the Calculation Agent on the following basis:

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(i) if the Reference Rate is a composite quotation or customarily supplied by one entity, the Calculation Agent will determine the Reference Rate which appears on the Relevant Screen Page as of the Relevant Time on the relevant Interest Determination Date;

(ii) if Linear Interpolation is specified as applicable in respect of an Interest Period in the applicable Pricing Supplement, the Rate of Interest for such Interest Period shall be calculated by the Calculation Agent by straight-line linear interpolation by reference to two rates which appear on the Relevant Screen Page as of the Relevant Time on the relevant Interest Determination Date, where:

(A) one rate shall be determined as if the relevant Interest Period were the period of time for which rates are available next shorter than the length of the relevant Interest Period; and

(B) the other rate shall be determined as if the relevant Interest Period were the period of time for which rates are available next longer than the length of the relevant Interest Period; provided, however, that if no rate is available for a period of time next shorter or, as the case may be, next longer than the length of the relevant Interest Period, then the Calculation Agent shall determine such rate at such time and by reference to such sources as it determines appropriate;

(iii) in any other case, the Calculation Agent will determine the arithmetic mean of the Reference Rates which appear on the Relevant Screen Page as of the Relevant Time on the relevant Interest Determination Date;

(iv) if, in the case of (i) above, such rate does not appear on that page or, in the case of (iii) above, fewer than two such rates appear on that page or if, in either case, the Relevant Screen Page is unavailable, the Calculation Agent will:

(A) request the principal Relevant Financial Centre office of each of the Reference Banks to provide a quotation of the Reference Rate at approximately the Relevant Time on the Interest Determination Date to prime banks in the Relevant Financial Centre interbank market in an amount that is representative for a single transaction in that market at that time; and

(B) determine the arithmetic mean of such quotations; and

(v) if fewer than two such quotations are provided as requested, the Calculation Agent will determine the arithmetic mean of the rates (being the nearest to the Reference Rate, as determined by the Calculation Agent) quoted by major banks in the Principal Financial Centre of the Specified Currency, selected by the Calculation Agent, at approximately 11.00am (local time in the Principal Financial Centre of the Specified Currency) on the first day of the relevant Interest Period for loans in the Specified Currency to leading European banks for a period equal to the relevant Interest Period and in an amount that is representative for a single transaction in that market at that time,

and the Rate of Interest for such Interest Period shall be the sum of the Margin and the rate or (as the case may be) the arithmetic mean so determined; provided, however, that if the Calculation Agent is unable to determine a rate or (as the case may be) an arithmetic mean in accordance with the above provisions in relation to any Interest Period, the Rate of Interest applicable to the Notes during such Interest Period will be the sum of the Margin and the rate or (as the case may be) the arithmetic mean last determined in relation to the Notes in respect of a preceding Interest Period.

(d) ISDA Determination: If ISDA Determination is specified in the relevant Pricing Supplement as the manner in which the Rate(s) of Interest is/are to be determined, the Rate of Interest applicable to the Notes for each Interest Period will be the sum of the

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Margin and the relevant ISDA Rate where "ISDA Rate" in relation to any Interest Period means a rate equal to the Floating Rate (as defined in the ISDA Definitions) that would be determined by the Calculation Agent under an interest rate swap transaction if the Calculation Agent were acting as Calculation Agent for that interest rate swap transaction under the terms of an agreement incorporating the ISDA Definitions and under which:

(i) the Floating Rate Option (as defined in the ISDA Definitions) is as specified in the relevant Pricing Supplement;

(ii) the Designated Maturity (as defined in the ISDA Definitions) is a period specified in the relevant Pricing Supplement;

(iii) the relevant Reset Date (as defined in the ISDA Definitions) is either (A) if the relevant Floating Rate Option is based on LIBOR for a currency, the first day of that Interest Period or (B) in any other case, as specified in the relevant Pricing Supplement; and

(iv) if Linear Interpolation is specified as applicable in respect of an Interest Period in the applicable Pricing Supplement, the Rate of Interest for such Interest Period shall be calculated by the Calculation Agent by straight-line linear interpolation by reference to two rates based on the relevant Floating Rate Option, where:

(A) one rate shall be determined as if the Designated Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period; and

(B) the other rate shall be determined as if the Designated Maturity were the period of time for which rates are available next longer than the length of the relevant Interest Period provided, however, that if there is no rate available for a period of time next shorter than the length of the relevant Interest Period or, as the case may be, next longer than the length of the relevant Interest Period, then the Calculation Agent shall determine such rate at such time and by reference to such sources as it determines appropriate.

(e) Maximum or Minimum Rate of Interest: If any Maximum Rate of Interest or Minimum Rate of Interest is specified in the relevant Pricing Supplement, then the Rate of Interest shall in no event be greater than the maximum or be less than the minimum so specified.

(f) Calculation of Interest Amount: The Calculation Agent will, as soon as practicable after the time at which the Rate of Interest is to be determined in relation to each Interest Period, calculate the Interest Amount payable in respect of each Note for such Interest Period. The Interest Amount will be calculated by applying the Rate of Interest for such Interest Period to the Calculation Amount, multiplying the product by the relevant Day Count Fraction, rounding the resulting figure to the nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards) and multiplying such rounded figure by a fraction equal to the Specified Denomination of the relevant Note divided by the Calculation Amount. For this purpose a "sub-unit" means, in the case of any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, in the case of euro, means one cent.

(g) Publication: The Calculation Agent will cause each Rate of Interest and Interest Amount determined by it, together with the relevant Interest Payment Date, and any other amount(s) required to be determined by it together with any relevant payment date(s) to be notified to the Paying Agents and each competent authority, stock exchange and/or quotation system (if any) by which the Notes have then been admitted to listing, trading and/or quotation as soon as practicable after such determination but (in the case of each Rate of Interest, Interest Amount and Interest Payment Date) in any event not

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later than the first day of the relevant Interest Period. Notice thereof shall also promptly be given to the Noteholders. The Calculation Agent will be entitled to recalculate any Interest Amount (on the basis of the foregoing provisions) without notice in the event of an extension or shortening of the relevant Interest Period. If the Calculation Amount is less than the minimum Specified Denomination the Calculation Agent shall not be obliged to publish each Interest Amount but instead may publish only the Calculation Amount and the Interest Amount in respect of a Note having the minimum Specified Denomination.

(h) Notifications etc: All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of this Condition by the Calculation Agent will (in the absence of manifest error) be binding on the Issuer, the Guarantor, the Paying Agents, the Noteholders and the Couponholders and (subject as aforesaid) no liability to any such Person will attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions for such purposes.

8. ZERO COUPON NOTE PROVISIONS

(a) Application: This Condition 8 (Zero Coupon Note Provisions) is applicable to the Notes only if the Zero Coupon Note Provisions are specified in the relevant Pricing Supplement as being applicable.

(b) Late payment on Zero Coupon Notes: If the Redemption Amount payable in respect of any Zero Coupon Note is improperly withheld or refused, the Redemption Amount shall thereafter be an amount equal to the sum of:

(i) the Reference Price; and

(ii) the product of the Accrual Yield (compounded annually) being applied to the Reference Price on the basis of the relevant Day Count Fraction from (and including) the Issue Date to (but excluding) whichever is the earlier of (i) the day on which all sums due in respect of such Note up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Fiscal Agent has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment).

9. REDEMPTION AND PURCHASE

(a) Scheduled redemption: Unless previously redeemed, or purchased and cancelled, the Notes will be redeemed at their Final Redemption Amount on the Maturity Date, subject as provided in Condition 10 (Payments— Bearer Notes) or Condition 11 (Payments— Registered Notes), as applicable.

(b) Redemption for tax reasons: The Notes may be redeemed at the option of the Issuer in whole, but not in part:

(i) at any time (unless the Floating Rate Note Provisions are specified in the relevant Pricing Supplement as being applicable); or

(ii) on any Interest Payment Date (if the Floating Rate Note Provisions are specified in the relevant Pricing Supplement as being applicable);

on giving not less than 30 nor more than 60 days' notice to the Noteholders, or such other period(s) as may be specified in the relevant Pricing Supplement, (which notice shall be irrevocable), at their Early Redemption Amount (Tax), together with interest accrued (if any) to the date fixed for redemption, if on the occasion of the next payment due in respect of the Notes:

(A) (1) the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 12 (Taxation) as a result of any change in, or

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amendment to, the laws or regulations of the Kingdom of Sweden or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date of issue of the first Tranche of the Notes; and (2) such obligation cannot be avoided by the Issuer taking reasonable measures available to it; or

(B) (1) the Guarantor has or (if a demand was made under the Guarantee of the Notes) would become obliged to pay additional amounts as provided or referred to in Condition 12 (Taxation) the Guarantee of the Notes as a result of any changes in, or amendment to, the laws or regulations of the Kingdom of Sweden or any political subdivision or any authority thereof or therein having power to tax, or any change in the application of official interpretation of such laws or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective on or after the date of issue of the first Tranche of the Notes and (2) such obligation cannot be avoided by the Guarantor taking reasonable measures available to it,

provided, however, that no such notice of redemption shall be given earlier than:

(1) where the Notes may be redeemed at any time, 90 days (or such other period as may be specified in the relevant Pricing Supplement) prior to the earliest date on which the Issuer or the Guarantor would be obliged to pay such additional amounts if a payment in respect of the Notes were then due or (as the case may be) a demand under the Guarantee of the Notes were then made; or

(2) where the Notes may be redeemed only on an Interest Payment Date, 60 days (or such other period as may be specified in the relevant Pricing Supplement) prior to the Interest Payment Date occurring immediately before the earliest date on which the Issuer or the Guarantor would be obliged to pay such additional amounts if a payment in respect of the Notes were then due or (as the case may be) a demand under the Guarantee of the Notes were then made.

Prior to the publication of any notices of redemption pursuant to this paragraph, the Issuer shall deliver or procure that there is delivered to the Fiscal Agent (i) a certificate signed by two directors of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred; and (ii) an opinion of independent legal advisers of recognised standing to the effect that the Issuer or, as the case may be, the Guarantor has or will become obliged to pay such additional amounts as a result of such change or amendment. Upon the expiry of any such notice as is referred to in this Condition 9(b), the Issuer shall be bound to redeem the Notes in accordance with this Condition 9(b).

(c) Redemption at the option of the Issuer: If the Call Option is specified in the relevant Pricing Supplement as being applicable, the Notes may be redeemed at the option of the Issuer in whole or, if so specified in the relevant Pricing Supplement, in part on any Optional Redemption Date (Call) at the relevant Optional Redemption Amount (Call) on the Issuer's giving not less than 30 nor more than 60 days' notice to the Noteholders, or such other period(s) as may be specified in the relevant Pricing Supplement (which notice shall be irrevocable and shall oblige the Issuer to redeem the Notes or, as the case may be, the Notes specified in such notice on the relevant Optional Redemption Date (Call) at the relevant Optional Redemption Amount (Call) plus accrued interest (if any) to such date).

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If the Optional Redemption Amount (Call) specified in the relevant Pricing Supplement is the "Make-Whole Redemption Amount", the Optional Redemption Amount (Call) will be the higher of:

(i) 100 per cent. of the principal amount of the Notes to be redeemed; and

(ii) the sum of the then present values of each of the remaining scheduled payments of principal and interest on such Notes (from but excluding the Optional Redemption Date (Call) up to, and including, the Maturity Date) discounted to the relevant Optional Redemption Date (Call) on an annual basis (based on the actual number of days elapsed divided by 365 (or, in the case of a leap year, 366)) at a rate equal to the sum of (x) the current yield to maturity (determined by reference to the Benchmark Security Price) at the Reference Time on the Reference Date of the relevant Benchmark Security(ies) plus (y) the Make- Whole Margin, as determined by the Financial Adviser,

provided however that, if the Optional Redemption Date occurs on or after the Par Redemption Date (if specified in the relevant Pricing Supplement), the Make-Whole Redemption Amount will be the principal amount of the Notes.

The "Benchmark Security", the "Reference Time", the "Make-Whole Margin" and the "Par Redemption Date" will be specified in the relevant Pricing Supplement, provided however that, if "Linear Interpolation" is specified as applicable in the relevant Pricing Supplement, the current yield of the Benchmark Security shall be determined by linear interpolation (calculated to the nearest one twelfth of a year) of the yield of the two Benchmark Securities specified in the Pricing Supplement.

If the Benchmark Security is not specified in the relevant Pricing Supplement, or is not outstanding at the relevant time, the Benchmark Security shall be the FA Selected Bond.

"Benchmark Security Price" means, with respect to the relevant Optional Redemption Date (Call), (a) the arithmetic average of the Benchmark Security Dealer Quotations for such date of redemption, after excluding the highest and lowest such quotations, or (b) if the Financial Adviser obtains fewer than four such quotations, the arithmetic average of all such quotations;

"Benchmark Security Dealer" means each of five banks selected by the Issuer, or their affiliates, which are (a) primary government securities dealers, and their respective successors, or (b) market makers in pricing corporate bond issues;

"Benchmark Security Dealer Quotations" means, with respect to each Benchmark Security Dealer and the relevant Optional Redemption Date (Call), the arithmetic average, as determined by the Financial Adviser, of the bid and offered prices for the Benchmark Security (expressed in each case as a percentage of its nominal amount) at the Reference Time specified in the applicable Pricing Supplement on the Reference Date quoted in writing to the Financial Adviser by such Benchmark Security Dealer;

"FA Selected Bond" means a government security or securities selected by the Financial Adviser as having an actual or interpolated maturity comparable with the remaining term of the Notes that would be utilised, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities denominated in the same currency as the Notes and of a comparable maturity to the remaining term of the Notes; and

"Financial Adviser" means an independent and internationally recognised financial adviser selected by the Issuer at its own expense;

The "Reference Date" means the date which is the third London Business Day prior to the date fixed for redemption.

(d) Partial redemption: If the Notes are to be redeemed in part only on any date in accordance with Condition 9(c) (Redemption at the option of the Issuer), in the case of

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Bearer Notes, the Notes to be redeemed shall be selected by the drawing of lots in such place as the Fiscal Agent approves and in such manner as the Fiscal Agent considers appropriate, subject to compliance with applicable law, the rules of each competent authority, stock exchange and/or quotation system (if any) by which the Notes have then been admitted to listing, trading and/or quotation and the notice to Noteholders referred to in Condition 9(c) (Redemption at the option of the Issuer) shall specify the serial numbers of the Notes so to be redeemed, and, in the case of Registered Notes, each Note shall be redeemed in part in the proportion which the aggregate principal amount of the outstanding Notes to be redeemed on the relevant Optional Redemption Date (Call) bears to the aggregate principal amount of outstanding Notes on such date. If any Maximum Redemption Amount or Minimum Redemption Amount is specified in the relevant Pricing Supplement, then the Optional Redemption Amount (Call) shall in no event be greater than the maximum or be less than the minimum so specified.

(e) Redemption at the option of Noteholders: If the Put Option is specified in the relevant Pricing Supplement as being applicable, the Issuer shall, at the option of the Holder of any Note redeem such Note on the Optional Redemption Date (Put) specified in the relevant Put Option Notice at the relevant Optional Redemption Amount (Put) together with interest (if any) accrued to such date. In order to exercise the option contained in this Condition 9(e), the Holder of a Note must, not less than 30 nor more than 60 days before the relevant Optional Redemption Date (Put) (or such other period(s) as may be specified in the relevant Pricing Supplement), deposit with any Paying Agent such Note together with all unmatured Coupons relating thereto and a duly completed Put Option Notice in the form obtainable from any Paying Agent. The Paying Agent with which a Note is so deposited shall deliver a duly completed Put Option Receipt to the depositing Noteholder. No Note, once deposited with a duly completed Put Option Notice in accordance with this Condition 9(e), may be withdrawn; provided, however, that if, prior to the relevant Optional Redemption Date (Put), any such Note becomes immediately due and payable or, upon due presentation of any such Note on the relevant Optional Redemption Date (Put), payment of the redemption moneys is improperly withheld or refused, the relevant Paying Agent shall mail notification thereof to the depositing Noteholder at such address as may have been given by such Noteholder in the relevant Put Option Notice and shall hold such Note at its Specified Office for collection by the depositing Noteholder against surrender of the relevant Put Option Receipt. For so long as any outstanding Note is held by a Paying Agent in accordance with this Condition 9(e), the depositor of such Note and not such Paying Agent shall be deemed to be the Holder of such Note for all purposes.

(f) Change of Control Put Option: If at any time while any Note remains outstanding, (A) there occurs a Change of Control (as defined below), and (B) within the Change of Control Period, a Rating Event in respect of that Change of Control occurs (such Change of Control and Rating Event not having been cured prior to the expiry of the Change of Control Period, together, a "Change of Control Put Event"), each Noteholder will have the option (the "Change of Control Put Option") (unless, prior to the giving of the Change of Control Put Event Notice (as defined below), the Issuer gives notice to redeem the Notes under Condition 9(b) or 9(c)) to require the Issuer to redeem or, at the Issuer's option, to procure the purchase of, all or part of its Notes, on the Optional Redemption Date (as defined below) at the principal amount outstanding of such Notes together with (or where purchased, together with an amount equal to) interest accrued to, but excluding, the Optional Redemption Date.

Where:

"acting in concert" means a group of persons who, pursuant to an agreement or understanding (whether formal or informal) actively co-operate through acquisition of shares in the Issuer by any of them, either directly or indirectly, to obtain or consolidate control of the Issuer.

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"Change of Control" means:

(i) prior to an Initial Public Offering (a) the Issuer ceasing to be the beneficial and legal owner directly or indirectly through wholly-owned Subsidiaries of the entire issued share capital of Volvo Car Corporation; or (b) other than pursuant to or in connection with an Initial Public Offering, Zhejiang Geely Holding Group Co. Ltd. (the "Existing Shareholder") ceasing to be the beneficial and legal owner directly or indirectly through wholly-owned Subsidiaries of at least 50.1 per cent. of the issued share capital of the Issuer; or

(ii) following an Initial Public Offering, any person or group of persons acting in concert (other than the Existing Shareholder) gaining control over the Issuer.

"Change of Control Period" means the period beginning on the date (the "Relevant Announcement Date") that is the earlier of (A) the first public announcement by or on behalf the Issuer, the Guarantor or any bidder or any designated advisor, of the relevant Change of Control; and (B) the date of the earliest Potential Change of Control Announcement, and ending 120 days after the Relevant Announcement Date (such 120th day, the "Initial Longstop Date"); provided that, unless any other Rating Agency has on or prior to the Initial Longstop Date effected a Rating Event in respect of its rating of the Issuer or the Guarantor, if a Rating Agency publicly announces, at any time during the period commencing on the date which is 60 days prior to the Initial Longstop Date and ending on the Initial Longstop Date, that it has placed its rating of the Issuer or Guarantor under consideration for rating review either entirely or partially as a result of the relevant public announcement of the Change of Control or Potential Change of Control Announcement, the Change of Control Period shall be extended to the date which falls 60 days after the date of such public announcement by such Rating Agency.

"control" means acquiring more than 50 per cent. of the issued share capital or the voting rights of the Issuer.

"Initial Public Offering" means a listing and/or public offering of the shares in the Issuer on any recognised investment exchange or on any exchange or market replacing the same or any other exchange or market in any country.

"Potential Change of Control Announcement" means any public announcement or statement by the Issuer, the Guarantor, any actual or potential bidder or any designated adviser thereto relating to any specific and near-term potential Change of Control (where "near-term" shall mean that such potential Change of Control is reasonably likely to occur, or is publicly stated by the Issuer, the Guarantor, any such actual or potential bidder or any such designated adviser to be intended to occur, within 120 days of the date of such announcement of statement).

A "Rating Event" shall be deemed to have occurred in respect of a Change of Control if (within the Change of Control Period) either (i) (A) the rating previously assigned to the Notes or to the Issuer or Guarantor by any Rating Agency solicited by (or with the consent of) the Issuer or the Guarantor is (x) withdrawn or (y) changed from an investment grade rating (BBB-/Baa3 or its equivalent for the time being, or better) to a non-investment grade rating (BB+/Ba1 or its equivalent for the time being, or worse) or (z) (if the rating previously assigned to the Notes or to the Issuer or Guarantor by any Rating Agency solicited by the Issuer or the Guarantor was below an investment grade rating (as described above)), lowered by at least one full rating notch (for example, from BB+ to BB, or their respective equivalents) and (B) such rating is not within the Change of Control Period subsequently upgraded (in the case of a downgrade) or reinstated (in the case of a withdrawal) either to an investment grade credit rating (in the case of (x) and (y)) or to its earlier credit rating or better (in the case of (z)) by such Rating Agency or (ii) the Notes or the Issuer or the Guarantor have not been previously assigned a credit rating solicited by the Issuer, or the Guarantor and no Rating Agency assigns the Issuer or the Notes an investment grade rating solicited by the Issuer, or the Guarantor within the Change of Control Period, provided that the Rating Agency making the reduction in rating or deciding not to assign an investment grade rating announces or publicly

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confirms or, having been so requested by the Issuer, or the Guarantor informs the Issuer or Guarantor in writing that the lowering or failure to assign an investment grade rating was the result, in whole or in part, of any event or circumstance comprised in or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Rating Event). If on the Relevant Announcement Date the Issuer, the Guarantor or the Notes carry a credit rating from more than one Rating Agency, at least one of which is an investment grade rating, then sub-paragraph (z) above will not apply.

Promptly upon the Issuer or the Guarantor becoming aware that a Change of Control Put Event has occurred, the Issuer or the Guarantor shall give notice (a "Change of Control Put Event Notice") to the Noteholders in accordance with Condition 19 (Notices) specifying the nature of the Change of Control Put Event and the circumstances giving rise to it and the procedure for exercising the Change of Control Put Option contained in this Condition 9(f).

To exercise the Change of Control Put Option, a Noteholder must transfer or cause to be transferred its Notes to be so redeemed or purchased to the account of the Fiscal Agent specified in the Change of Control Put Option Notice (as defined below) for the account of the Issuer within the period (the "Change of Control Put Period") of forty-five (45) days after a Change of Control Put Event Notice is given together with a duly signed and completed notice of exercise in the then current form obtainable from the Fiscal Agent (a "Change of Control Put Option Notice") and in which the Noteholder may specify a bank account to which payment is to be made under this Condition 9(f).

A Change of Control Put Option Notice once given shall be irrevocable. The Issuer shall redeem or, at the option of the Issuer procure the purchase of, the Notes in respect of which the Change of Control Put Option has been validly exercised as provided above, and subject to the transfer of such Notes to the account of the Fiscal Agent for the account of the Issuer as described above by the date which is the fifth Business Day following the end of the Change of Control Put Period (the "Optional Redemption Date"). Payment in respect of such Notes will be made on the Optional Redemption Date by transfer to the bank account specified in the Change of Control Put Option Notice.

For the avoidance of doubt, the Issuer shall have no responsibility for any cost or loss of whatever kind (including breakage costs) which the Noteholder may incur as a result of or in connection with such Noteholder's exercise or purported exercise of, or otherwise in connection with, any Change of Control Put Option (whether as a result of any purchase or redemption arising therefrom or otherwise).

If 80 per cent. or more in principal amount of the Notes then outstanding have been redeemed pursuant to this Condition 9(f), the Issuer may, on not less than thirty (30) nor more than sixty (60) days' irrevocable notice to the Noteholders in accordance with Condition 19 (Notices) given within thirty (30) days after the Optional Redemption Date, redeem on a date to be specified in such notice at its option, all (but not some only) of the remaining Notes at their principal amount, together with interest accrued to but excluding the date of redemption.

(g) No other redemption: The Issuer shall not be entitled to redeem the Notes otherwise than as provided in paragraphs (a) to (f) above.

(h) Early redemption of Zero Coupon Notes: Unless otherwise specified in the relevant Pricing Supplement, the Redemption Amount payable on redemption of a Zero Coupon Note at any time before the Maturity Date shall be an amount equal to the sum of:

(i) the Reference Price; and

(j) the product of the Accrual Yield (compounded annually) being applied to the Reference Price from (and including) the Issue Date to (but excluding) the date fixed for

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redemption or (as the case may be) the date upon which the Note becomes due and payable.

Where such calculation is to be made for a period which is not a whole number of years, the calculation in respect of the period of less than a full year shall be made on the basis of such Day Count Fraction as may be specified in the Pricing Supplement for the purposes of this Condition 9(h) or, if none is so specified, a Day Count Fraction of 30E/360.

(k) Purchase: The Issuer, the Guarantor or any of their respective Subsidiaries may at any time purchase Notes in the open market or otherwise and at any price, provided that all unmatured Coupons are purchased therewith.

(l) Cancellation: All Notes so redeemed or purchased by the Issuer, the Guarantor or any of their Subsidiaries and any unmatured Coupons attached to or surrendered with them may at the option of the Issuer be cancelled and all Notes so cancelled may not be reissued or resold.

10. PAYMENTS—BEARER NOTES

This Condition 10 is only applicable to Bearer Notes.

(a) Principal: Payments of principal shall be made only against presentation and (provided that payment is made in full) surrender of Bearer Notes at the Specified Office of any Paying Agent outside the United States by cheque drawn in the currency in which the payment is due on, or by transfer to an account denominated in that currency (or, if that currency is euro, any other account to which euro may be credited or transferred) and maintained by the payee with, a bank in the Principal Financial Centre of that currency.

(b) Interest: Payments of interest shall, subject to paragraph (h) below, be made only against presentation and (provided that payment is made in full) surrender of the appropriate Coupons at the Specified Office of any Paying Agent outside the United States in the manner described in paragraph (a) above.

(c) Payments in New York City: Payments of principal or interest may be made at the Specified Office of a Paying Agent in New York City if (i) the Issuer has appointed Paying Agents outside the United States with the reasonable expectation that such Paying Agents will be able to make payment of the full amount of the interest on the Notes in the currency in which the payment is due when due, (ii) payment of the full amount of such interest at the offices of all such Paying Agents is illegal or effectively precluded by exchange controls or other similar restrictions and (iii) payment is permitted by applicable United States law.

(d) Payments subject to fiscal laws: All payments in respect of the Notes are subject in all cases to any applicable fiscal or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 12 (Taxation).

(e) Deductions for unmatured Coupons: If the relevant Pricing Supplement specifies that the Fixed Rate Note Provisions are applicable and a Bearer Note is presented without all unmatured Coupons relating thereto:

(i) if the aggregate amount of the missing Coupons is less than or equal to the amount of principal due for payment, a sum equal to the aggregate amount of the missing Coupons will be deducted from the amount of principal due for payment; provided, however, that if the gross amount available for payment is less than the amount of principal due for payment, the sum deducted will be that proportion of the aggregate amount of such missing Coupons which the gross amount actually available for payment bears to the amount of principal due for payment;

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(ii) if the aggregate amount of the missing Coupons is greater than the amount of principal due for payment:

(A) so many of such missing Coupons shall become void (in inverse order of maturity) as will result in the aggregate amount of the remainder of such missing Coupons (the "Relevant Coupons") being equal to the amount of principal due for payment; provided, however, that where this sub-paragraph would otherwise require a fraction of a missing Coupon to become void, such missing Coupon shall become void in its entirety; and

(B) a sum equal to the aggregate amount of the Relevant Coupons (or, if less, the amount of principal due for payment) will be deducted from the amount of principal due for payment; provided, however, that, if the gross amount available for payment is less than the amount of principal due for payment, the sum deducted will be that proportion of the aggregate amount of the Relevant Coupons (or, as the case may be, the amount of principal due for payment) which the gross amount actually available for payment bears to the amount of principal due for payment.

Each sum of principal so deducted shall be paid in the manner provided in paragraph (a) above against presentation and (provided that payment is made in full) surrender of the relevant missing Coupons.

(f) Unmatured Coupons void: If the relevant Pricing Supplement specifies that this Condition 10(f) is applicable or that the Floating Rate Note Provisions are applicable, on the due date for final redemption of any Note or early redemption in whole of such Note pursuant to Condition 9(b) (Redemption for tax reasons), Condition 9(e) (Redemption at the option of Noteholders), Condition 9(f) (Change of Control Put Option), Condition 9(c) (Redemption at the option of the Issuer) or Condition 13 (Events of Default), all unmatured Coupons relating thereto (whether or not still attached) shall become void and no payment will be made in respect thereof.

(g) Payments on business days: If the due date for payment of any amount in respect of any Bearer Note or Coupon is not a Payment Business Day in the place of presentation, the Holder shall not be entitled to payment in such place of the amount due until the next succeeding Payment Business Day in such place and shall not be entitled to any further interest or other payment in respect of any such delay.

(h) Payments other than in respect of matured Coupons: Payments of interest other than in respect of matured Coupons shall be made only against presentation of the relevant Bearer Notes at the Specified Office of any Paying Agent outside the United States (or in New York City if permitted by paragraph (c) above).

(i) Partial payments: If a Paying Agent makes a partial payment in respect of any Bearer Note or Coupon presented to it for payment, such Paying Agent will endorse thereon a statement indicating the amount and date of such payment.

(j) Exchange of Talons: On or after the maturity date of the final Coupon which is (or was at the time of issue) part of a Coupon Sheet relating to the Bearer Notes, the Talon forming part of such Coupon Sheet may be exchanged at the Specified Office of the Fiscal Agent for a further Coupon Sheet (including, if appropriate, a further Talon but excluding any Coupons in respect of which claims have already become void pursuant to Condition 14 (Prescription). Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating to such Note shall become void and no Coupon will be delivered in respect of such Talon.

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11. PAYMENTS—REGISTERED NOTES

This Condition 11 is only applicable to Registered Notes.

(a) Principal: Payments of principal shall be made by cheque drawn in the currency in which the payment is due drawn on, or, upon application by a Holder of a Registered Note to the Specified Office of the Fiscal Agent not later than the fifteenth day before the due date for any such payment, by transfer to an account denominated in that currency (or, if that currency is euro, any other account to which euro may be credited or transferred) and maintained by the payee with, a bank in the Principal Financial Centre of that currency (in the case of a sterling cheque, a town clearing branch of a bank in the City of London) and (in the case of redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of any Paying Agent.

(b) Interest: Payments of interest shall be made by cheque drawn in the currency in which the payment is due drawn on, or, upon application by a Holder of a Registered Note to the Specified Office of the Fiscal Agent not later than the fifteenth day before the due date for any such payment, by transfer to an account denominated in that currency (or, if that currency is euro, any other account to which euro may be credited or transferred) and maintained by the payee with, a bank in the Principal Financial Centre of that currency (in the case of a sterling cheque, a town clearing branch of a bank in the City of London) and (in the case of interest payable on redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of any Paying Agent.

(c) Payments subject to fiscal laws: All payments in respect of the Registered Notes are subject in all cases to any applicable fiscal or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 12 (Taxation). No commissions or expenses shall be charged to the Noteholders in respect of the payments.

(d) Payments on business days: Where payment is to be made by transfer to an account, payment instructions (for value the due date, or, if the due date is not Payment Business Day, for value the next succeeding Payment Business Day) will be initiated and, where payment is to be made by cheque, the cheque will be mailed (i) (in the case of payments of principal and interest payable on redemption) on the later of the due date for payment and the day on which the relevant Note Certificate is surrendered (or, in the case of part payment only, endorsed) at the Specified Office of a Paying Agent and (ii) (in the case of payments of interest payable other than on redemption) on the due date for payment. A Holder of a Registered Note shall not be entitled to any interest or other payment in respect of any delay in payment resulting from (A) the due date for a payment not being a Payment Business Day or (B) a cheque mailed in accordance with this Condition 11 arriving after the due date for payment or being lost in the mail.

(e) Partial payments: If a Paying Agent makes a partial payment in respect of any Registered Note, the Issuer shall procure that the amount and date of such payment are noted on the Register and, in the case of partial payment upon presentation of a Note Certificate, that a statement indicating the amount and the date of such payment is endorsed on the relevant Note Certificate.

(f) Record date: Each payment in respect of a Registered Note will be made to the person shown as the Holder in the Register at the opening of business in the place of the Registrar's Specified Office on the fifteenth day before the due date for such payment (the "Record Date"). Where payment in respect of a Registered Note is to be made by cheque, the cheque will be mailed to the address shown as the address of the Holder in the Register at the opening of business on the relevant Record Date.

12. TAXATION

(a) Gross up: All payments of principal and interest in respect of the Notes and the Coupons by or on behalf of the Issuer or the Guarantor shall be made free and clear of,

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and without withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the Kingdom of Sweden or any political subdivision therein or any authority therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments, or governmental charges is required by law. In that event, the Issuer or (as the case may be) the Guarantor shall pay such additional amounts as will result in receipt by the Noteholders and the Couponholders after such withholding or deduction of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable in respect of any Note or Coupon

(i) held by or on behalf of a Holder which is liable to such taxes, duties, assessments or governmental charges in respect of such Note or Coupon by reason of its having some connection with the Kingdom of Sweden other than the mere holding of the Note or Coupon;

(ii) where the relevant Note or Coupon or Note Certificate is presented or surrendered for payment more than 30 days after the Relevant Date except to the extent that the Holder of such Note or Coupon would have been entitled to such additional amounts on presenting or surrendering such Note or Coupon or Note Certificate for payment on the last day of such period of 30 days;

(iii) in respect of taxes, duties, assessments or governmental charges that would not have been imposed, assessed, levied or collected had the Holder or beneficial owner of the Notes complied to the extent it is legally entitled to do so, on a timely basis, with a written request (at least 90 days prior to the Relevant Date) of the Issuer or Guarantor for any applicable information, documentation or certification concerning the nationality, residence or identity or connection with the Kingdom of Sweden of the Holder or beneficial owner, which if provided on a timely basis, would have permitted the payment to be made without withholding or deduction (or with a reduced rate of withholding or deduction); or

(iv) required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986 (the "Code") or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or any law implementing an intergovernmental approach thereto.

(b) Taxing jurisdiction: If the Issuer or the Guarantor becomes subject at any time to any taxing jurisdiction other than the Kingdom of Sweden, references in these Conditions to Issuer's taxing jurisdiction or Guarantor's taxing jurisdiction shall be construed as references to the Kingdom of Sweden.

13. EVENTS OF DEFAULT

If any of the following events occurs and is continuing:

(a) Non-payment: the Issuer fails to pay any amount of principal in respect of the Notes on the due date for payment thereof or fails to pay any amount of interest in respect of the Notes on the due date for payment thereof and such default continues for a period of 15 days; or

(b) Breach of other obligations: the Issuer or the Guarantor defaults in the performance or observance of any of its other obligations under or in respect of the Notes or the Guarantee of the Notes and such default remains unremedied for at least 60 days after written notice thereof, addressed to the Issuer and the Guarantor by any Noteholder, has been delivered to the Issuer and the Guarantor or to the Specified Office of the Fiscal Agent; or

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(c) Cross-default of Issuer, Guarantor or Material Subsidiary:

(i) any Indebtedness of the Issuer, the Guarantor or any Material Subsidiary is not paid when due or (as the case may be) within any originally applicable grace period;

(ii) any Indebtedness of the Issuer, the Guarantor or any Material Subsidiary becomes due and payable prior to its stated maturity by reason of an event of default, howsoever described; or

(iii) the Issuer, the Guarantor or any Material Subsidiary fails to pay when due any amount payable by it under any Guarantee of any Indebtedness;

provided that the amount of Indebtedness referred to in sub-paragraph (i) and/or sub- paragraph (ii) above and/or the amount payable under any Guarantee referred to in sub- paragraph (iii) above individually or in the aggregate exceeds EUR 40,000,000 (or its equivalent in any other currency or currencies); or

(d) Unsatisfied judgment: one or more judgment(s) or order(s) (not covered by insurance) from which no further appeal or judicial review is permissible under applicable law for the payment of an aggregate amount in excess of EUR 40,000,000 (or its equivalent in any other currency or currencies) is rendered against the Issuer, the Guarantor or any Material Subsidiary and continue(s) unsatisfied and unstayed for a period of 60 days after the date(s) thereof or, if later, the date therein specified for payment; or

(e) Security enforced: a secured party takes possession, or a receiver, manager or other similar officer is appointed, of the whole or any substantial part of the undertaking, assets and revenues of the Issuer, the Guarantor or any Material Subsidiary; or

(f) Insolvency etc: (i) the Issuer, the Guarantor or any Material Subsidiary becomes insolvent or is unable to pay its debts as they fall due, (ii) an administrator or liquidator is appointed (or application for any such appointment is made) in respect of the Issuer, the Guarantor or any Material Subsidiary or the whole or any substantial part of the undertaking, assets and revenues of the Issuer, the Guarantor or any Material Subsidiary, unless the petition to commence such proceedings or procedure is discharged, stayed or dismissed within 60 days of such commencement, (iii) the Issuer, the Guarantor or any Material Subsidiary takes any action for a readjustment or deferment of any of its obligations or makes a general assignment or an arrangement or composition with or for the benefit of its creditors or declares a moratorium in respect of any of its Indebtedness or any Guarantee of any Indebtedness given by it or (iv) the Issuer, the Guarantor or any Material Subsidiary ceases or threatens to cease to carry on all or substantially all of its business otherwise than, in the case of a Material Subsidiary, for the purposes of a Permitted Restructuring; or

(g) Winding up etc: an order is made or an effective resolution is passed for the winding up, liquidation or dissolution of the Issuer, the Guarantor or any Material Subsidiary otherwise than, in the case of a Material Subsidiary, for the purposes of a Permitted Restructuring; or

(h) Analogous event: any event occurs which under the laws of the Kingdom of Sweden has an analogous effect to any of the events referred to in paragraphs (d) to (g) above; or

(i) Unlawfulness: it is or will become unlawful for the Issuer or the Guarantor to perform or comply with any of its obligations under or in respect of the Notes or the Deed of Guarantee; or

(j) Guarantee not in force: the Guarantee of the Notes is not (or is claimed by the Guarantor not to be) in full force and effect. then any Note may, by written notice addressed by the Holder thereof to the Issuer and the Guarantor and delivered to the Issuer and the Guarantor or to the Specified Office of the Fiscal Agent, be declared immediately due and payable, whereupon it shall become immediately due

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and payable at its Early Termination Amount together with accrued interest (if any) without further action or formality.

14. PRESCRIPTION

Claims for principal in respect of Bearer Notes shall become void unless the relevant Bearer Notes are presented for payment within ten years of the appropriate Relevant Date. Claims for interest in respect of Bearer Notes shall become void unless the relevant Coupons are presented for payment within five years of the appropriate Relevant Date. Claims for principal and interest on redemption in respect of Registered Notes shall become void unless the relevant Note Certificates are surrendered for payment within ten years of the appropriate Relevant Date.

15. REPLACEMENT OF NOTES AND COUPONS

If any Note, Note Certificate or Coupon is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Fiscal Agent, in the case of Bearer Notes, or the Registrar, in the case of Registered Notes (and, if the Notes are then admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system which requires the appointment of a Paying Agent or Transfer Agent in any particular place, the Paying Agent or Transfer Agent having its Specified Office in the place required by such competent authority, stock exchange and/or quotation system), subject to all applicable laws and competent authority, stock exchange and/or quotation system requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Issuer may reasonably require. Mutilated or defaced Notes, Note Certificates or Coupons must be surrendered before replacements will be issued.

16. AGENTS

In acting under the Agency Agreement and in connection with the Notes and the Coupons, the Agents act solely as agents of the Issuer and the Guarantor and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders or Couponholders.

The initial Agents and their initial Specified Offices are listed below. The initial Calculation Agent (if any) is specified in the relevant Pricing Supplement. The Issuer and the Guarantor reserves the right at any time to vary or terminate the appointment of any Agent and to appoint a successor fiscal agent or registrar or Calculation Agent and additional or successor paying agents; provided, however, that:

(a) the Issuer and the Guarantor shall at all times maintain a fiscal agent and a registrar; and

(b) if a Calculation Agent is specified in the relevant Pricing Supplement, the Issuer and the Guarantor shall at all times maintain a Calculation Agent; and

(c) if and for so long as the Notes are admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system which requires the appointment of a Paying Agent and/or a Transfer Agent in any particular place, the Issuer and the Guarantor shall maintain a Paying Agent and/or a Transfer Agent having its Specified Office in the place required by such competent authority, stock exchange and/or quotation system.

Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Noteholders.

17. MEETINGS OF NOTEHOLDERS; MODIFICATION AND WAIVER

(a) Meetings of Noteholders: The Agency Agreement contains provisions for convening meetings of Noteholders to consider matters relating to the Notes, including the modification of any provision of these Conditions. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Issuer and the Guarantor (acting together) and shall be convened by them upon the request in writing of Noteholders holding not less than one-tenth of the aggregate principal amount of the outstanding Notes. The quorum at any meeting convened to vote

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on an Extraordinary Resolution will be two or more Persons holding or representing one more than half of the aggregate principal amount of the outstanding Notes or, at any adjourned meeting, two or more Persons being or representing Noteholders whatever the principal amount of the Notes held or represented; provided, however, that Reserved Matters may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which two or more Persons holding or representing not less than three- quarters or, at any adjourned meeting, one quarter of the aggregate principal amount of the outstanding Notes form a quorum. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders and Couponholders, whether present or not.

In addition, a resolution in writing signed by or on behalf of all Noteholders who for the time being are entitled to receive notice of a meeting of Noteholders will take effect as if it were an Extraordinary Resolution. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders.

(b) Modification: The Notes, these Conditions, the Deed of Guarantee and the Deed of Covenant may be amended without the consent of the Noteholders or the Couponholders to correct a manifest error. In addition, the parties to the Agency Agreement may agree to modify any provision thereof, but the Issuer and the Guarantor shall not agree, without the consent of the Noteholders, to any such modification unless it is of a formal, minor or technical nature or it is made to correct a manifest error or it is, in the opinion of such parties, not materially prejudiced to the interests of the noteholders.

18. FURTHER ISSUES

The Issuer may from time to time, without the consent of the Noteholders or the Couponholders, create and issue further notes having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest) so as to form a single series with the Notes.

19. NOTICES

(a) Bearer Notes: Notices to the Holders of Bearer Notes shall be valid if published in a leading English language daily newspaper published in London (which is expected to be the Financial Times) and, if the Bearer Notes are admitted to trading on the Luxembourg Stock Exchange and it is a requirement of applicable law or regulations, a leading newspaper having general circulation in Luxembourg (which is expected to be Luxemburger Wort) or published on the website of the Luxembourg Stock Exchange (www.bourse.lu) or in either case, if such publication is not practicable, in a leading English language daily newspaper having general circulation in Europe. Any such notice shall be deemed to have been given on the date of first publication (or if required to be published in more than one newspaper, on the first date on which publication shall have been made in all the required newspapers). Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the Holders of Bearer Notes.

(b) Registered Notes: Notices to the Holders of Registered Notes shall be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register and, if the Registered Notes are admitted to trading on the Luxembourg Stock Exchange and it is a requirement of applicable law or regulations, notices to Noteholders will be published on the date of such mailing in a leading newspaper having general circulation in Luxembourg (which is expected to be Luxemburger Wort) or published on the website of the Luxembourg Stock Exchange (www.bourse.lu) or in either case, if such publication is not practicable, in a leading English language daily newspaper having general circulation in Europe. Any such notice shall be deemed to have been given on the fourth day after the date of mailing.

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20. ROUNDING

For the purposes of any calculations referred to in these Conditions (unless otherwise specified in these Conditions or the relevant Pricing Supplement), (a) all percentages resulting from such calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with 0.000005 per cent. being rounded up to 0.00001 per cent.), (b) all United States dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one half cent being rounded up), (c) all Japanese Yen amounts used in or resulting from such calculations will be rounded downwards to the next lower whole Japanese Yen amount, and (d) all amounts denominated in any other currency used in or resulting from such calculations will be rounded to the nearest two decimal places in such currency, with 0.005 being rounded upwards.

21. GOVERNING LAW AND JURISDICTION

(a) Governing law: The Notes and any non-contractual obligations arising out of or in connection with the Notes are governed by English law.

(b) English courts: The courts of England have exclusive jurisdiction to settle any dispute (a "Dispute") arising out of or in connection with the Notes (including any non- contractual obligation arising out of or in connection with the Notes).

(c) Appropriate forum: The Issuer agrees that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that it will not argue to the contrary.

(d) Rights of the Noteholders to take proceedings outside England: Notwithstanding Condition 21(b) (English courts), any Noteholder may take proceedings relating to a Dispute ("Proceedings") in any other courts with jurisdiction. To the extent allowed by law, Noteholders may take concurrent Proceedings in any number of jurisdictions.

(e) Service of process: The Issuer agrees that the documents which start any Proceedings and any other documents required to be served in relation to those Proceedings may be served on it by being delivered to Volvo Car UK Limited at its registered office at Scandinavia House, Norreys Drive, Maidenhead, SL6 4FL, or to such other person with an address in England or Wales and/or at such other address in England or Wales as the Issuer may specify by notice in writing to the Noteholders. Nothing in this paragraph shall affect the right of any Noteholder to serve process in any other manner permitted by law. This Condition applies to Proceedings in England and to Proceedings elsewhere.

(f) Waiver of immunity: To the extent that the Issuer has any immunity from the jurisdiction of any court or from any process, the Issuer hereby irrevocably agrees not to claim, and hereby waives, any such immunity.

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FORM OF PRICING SUPPLEMENT

Set out below is the form of Pricing Supplement which will be completed for each Tranche of Notes issued under the Programme.

[PROHIBITION OF SALES TO EEA RETAIL INVESTORS—The Notes are not intended, [from 1 January 2018], to be offered, sold or otherwise made available to and [with effect from such date], should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU ("MiFID II"); (ii) a customer within the meaning of Directive 2002/92/EC ("IMD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II or (iii) not a qualified investor as defined in Directive 2003/71/EC (as amended, the "Prospectus Directive"). Consequently no key information document required by Regulation (EU) No 1286/2014 (the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.][Include unless the Pricing Supplement specifies "Prohibition of Sales to EEA Retail Investors" as "Not Applicable"]

Pricing Supplement dated [•]

VOLVO CAR AB (PUBL)

(a public limited liability company incorporated in the Kingdom of Sweden)

Issue of [Aggregate Principal Amount of Tranche][Title of Notes]

Guaranteed by VOLVO CAR CORPORATION

(a private limited liability company incorporated in the Kingdom of Sweden)

under the EUR3,000,000,000 Euro Medium Term Note Programme

PART A—CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Notes (the "Conditions") set forth in the Offering Circular dated 9 November 2017 [and the supplemental Offering Circular dated [•]]. This document constitutes the Pricing Supplement relating to the issue of Notes described herein. This Pricing Supplement contains the Pricing Supplement of the Notes and must be read in conjunction with such Offering Circular [as so supplemented].

Full information on the Issuer, the Guarantor and the offer of the Notes described herein is only available on the basis of the combination of this Pricing Supplement and the Offering Circular [as so supplemented]. The Offering Circular [and the supplemental Offering Circular] [is] [are] available for viewing [at [website]] [and] during normal business hours at [address] [and copies may be obtained from [address]].

[Include whichever of the following apply or specify as "Not Applicable" (N/A). Note that the numbering should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or sub- paragraphs. Italics denote guidance for completing the Pricing Supplement.]

[When completing a pricing supplement, or adding any other Pricing Supplement or information, consideration should be given as to whether such terms or information constitute "significant new factors" and consequently trigger the need for a supplement to the Offering Circular in accordance with the rules of the Luxembourg Stock Exchange]

1. (i) Issuer: Volvo Car AB (publ)

(ii) Guarantor: Volvo Car Corporation

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2. (i) Series Number: [•]

[(ii) Tranche Number: [•]

[(iii) Date on which the Notes [Not Applicable/The Notes shall be consolidated, form a become fungible: single series and be interchangeable for trading purposes with the [•] on [[•]/the Issue Date/exchange of the Temporary Global Note for interests in the Permanent Global Note, as referred to in paragraph [22] below [which is expected to occur on or about [•]].]

3. Specified Currency or [•] Currencies:

4. Aggregate Principal Amount: [•]

[(i)] Series: [•]

[(ii) Tranche: [•]]

5. Issue Price: [•] per cent. of the Aggregate Principal Amount [plus accrued interest from [•]]

6. (i) Specified [•] [and integral multiples of [•] in excess thereof up to and Denominations: including [•]. No notes in definitive form will be issued with a denomination above [•]]

(ii) Calculation Amount: [•]

7. (i) Issue Date: [•]

(ii) Interest Commencement [Specify/Issue Date/Not Applicable] Date:

8. Maturity Date: [•]

9. Interest Basis: [[•] per cent. Fixed Rate]

[•] [•] [EURIBOR]/[LIBOR]] +/– [•] per cent. Floating Rate]

[Zero Coupon]

(further particulars specified below in paragraph(s) [14/15/16])

10. Redemption/Payment Basis: Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at [[•]/[100]] per cent. of their principal amount.

11. Change of Interest or [Applicable/Not Applicable] Redemption/Payment Basis:

12. Put/Call Options: [Not Applicable]

[Investor Put]

[Change of Control Put]

[Issuer Call]

(See paragraph(s) [17/18/19] below)

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13. [(i)] Status of the Notes: Senior

[(ii)] Status of the Guarantee: Senior

[(iii)] [Date [Board] approval [•] for issuance of Notes [and Guarantee] [respectively] obtained]:

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

14. Fixed Rate Note Provisions [Applicable/Not Applicable]

(i) Rate[(s)] of Interest: [•] per cent. per annum payable in arrear on each Interest Payment Date

(ii) Interest Payment [[•] [and [•]] in each year up to and including the Maturity Date(s): Date]

(iii) Fixed Coupon [•] per Calculation Amount Amount[(s)]:

(iv) Broken Amount(s): [•] per Calculation Amount, payable on the Interest Payment Date falling [in/on] [•]/[Not Applicable]

(v) Day Count Fraction: [Actual/Actual (ICMA)/Actual/Actual (ISDA)/Actual/365 (Fixed)/Actual/360/30/360/30E/360]

(vi) Determination Dates: [[•] in each year/Not Applicable]

(vii) Business Day [Floating Rate Convention/Following Business Day Convention: Convention/Modified Following Business Day Convention/Preceding Business Day Convention/No Adjustment]

15. Floating Rate Note Provisions [Applicable/Not Applicable]

(i) Specified Period [•]

(ii) Specified Interest [•] in each year Payment Dates:

(iii) First Interest Payment [•] Date:

(iv) Business Day [Floating Rate Convention/Following Business Day Convention: Convention/Modified Following Business Day Convention/Preceding Business Day Convention/No Adjustment]

(v) Additional Business [Not Applicable/[•]] Centre(s):

(vi) Manner in which the [Screen Rate Determination/ISDA Determination] Rate(s) of Interest is/are to be determined:

(vii) Party responsible for [[•] shall be the Calculation Agent] [name and address of calculating the Rate(s) Calculation Agent to be inserted]] Amount(s) (if not the of Interest and/or Fiscal Agent): Interest Amount(s) (if not the [Fiscal Agent])

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(viii) Screen Rate [•] [•] [EURIBOR]/[LIBOR]] Determination:

 Reference Rate: [•]

 Interest [•] Determination Date(s):

 Relevant Screen [•] Page:

 Relevant Time [•]

 Relevant [•] Financial Centre

(ix) ISDA Determination: [•]

 Floating Rate [•] Option:

 Designated [•] Maturity:

 Reset Date: [•]

(x) [Linear Interpolation: Not Applicable / Applicable – the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated using Linear Interpolation]

(xi) Margin(s): [+/-][•] per cent. per annum

(xii) Minimum Rate of [•] per cent. per annum Interest:

(xiii) Maximum Rate of [•] per cent. per annum Interest:

(xiv) Day Count Fraction: [Actual/Actual (ICMA)/Actual/Actual (ISDA)/Actual/365 (Fixed)/Actual/360/30/360/30E/360]

16. Zero Coupon Note Provisions [Applicable/Not Applicable]

(i) Accrual Yield: [•] per cent. per annum

(ii) Reference Price: [•]

(iii) Day Count Fraction in [Actual/Actual (ICMA/Actual/Actual/(ISDA)/Actual/365 relation to early (Fixed)/Actual/360/30/360/30E/360] Redemption Amounts:

PROVISIONS RELATING TO REDEMPTION

17. Call Option [Applicable/Not Applicable]

(i) Optional Redemption [•] Date(s) (Call):

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(ii) Optional Redemption [•] per Calculation Amount/Make-Whole Amount] Amount(s) (Call) of each Note:

[(a) Benchmark [•] Security(ies):

[(b) Reference Time: [•]

[(c) Make-Whole [•] per cent. Margin:

[(d) Par Redemption [[•] [Not Applicable]] Date:

[(e) Linear [Applicable/Not Applicable] Interpolations:

(iii) If redeemable in part:

(a) Minimum [•] per Calculation Amount Redemption Amount:

(b) Maximum [•] per Calculation Amount Redemption Amount

(iv) Notice period: [•]

18. Put Option [Applicable/Not Applicable]

(i) Optional Redemption [•] Date(s) (Put):

(ii) Optional Redemption [•] per Calculation Amount Amount(s) (Put) of each Note and method, if any, of calculation of such amount(s):

(iii) Notice period: [•]

19. Final Redemption Amount of [[•] per Calculation Amount/Not Applicable] each Note

20. Early Redemption Amount [[•] per Calculation Amount/Not Applicable] (Tax)

21. Early Termination Amount [[•] per Calculation Amount/Not Applicable]

GENERAL PROVISIONS APPLICABLE TO THE NOTES

22. Form of Notes [Bearer Notes:]

[Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes on [•] days' notice/at any time/in the limited circumstances specified in the Permanent Global Note]

[Temporary Global Note exchangeable for Definitive Notes on [•] days' notice]

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[Permanent Global Note exchangeable for Definitive Notes on [•] days' notice/at any time/in the limited circumstances specified in the Permanent Global Note]

(N.B. The exchange upon notice/at any time options should not be expressed to be applicable if the Specified Denomination of the Notes includes language substantially to the following effect: "EUR100,000 and integral multiples of EUR1,000 in excess thereof up to and including EUR199,000". Furthermore, such Specified Denomination construction is not permitted in relation to any issuance of Notes which is to be represented on issue by Permanent Bearer Global Notes exchangeable for Definitive Notes.)

[Registered Notes:]

Global Registered Note registered in the name of a nominee for [a common depositary for Euroclear and Clearstream, Luxembourg/a common safekeeper for Euroclear and Clearstream, Luxembourg (that is, held under the New Safekeeping Structure (NSS))]

23. New Global Note: [Yes] [No] [Not Applicable]

24. Additional Financial Centre(s): [Not Applicable/[•]]

25. Talons for future Coupons to be [Yes/No. As the Notes have more than 27 coupon attached to Definitive Notes (and payments, talons may be required if, on exchange into dates on which such Talons definitive form, more than 27 coupon payments are left.] mature):

THIRD PARTY INFORMATION

[[•] has been extracted from [•].] The Issuer and the Guarantor confirm that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by [•], no facts have been omitted which would render the reproduced information inaccurate or misleading.

Signed on behalf of Volvo Car AB

By: ………………………………… By: ………………………………… (duly authorised) (duly authorised)

Signed on behalf of Volvo Car Corporation

By: ………………………………… By: ………………………………… (duly authorised) (duly authorised)

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PART B – OTHER INFORMATION

1. LISTING AND ADMISSION TO TRADING

(i) Listing: [Official List of the Luxembourg Stock Exchange/[•]/None]

(ii) Admission to Trading: [Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange with effect from [•].] [Not Applicable.]

[Application has been made for the Notes to be displayed on the Luxembourg Green Exchange (LGX]

(iii) Estimate of total expenses [•] related to admission to trading:

2. RATINGS [The Notes to be issued [have been/are expected to be] rated]/[are unrated]

Ratings: [Standard & Poor's: [•]]

[Moody's: [•]]

[•]

[[•] is established in the EEA and registered under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation").]

[[•] is established in the EEA and has applied for registration under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation"), although notification of the corresponding registration decision has not yet been provided by the [relevant competent authority]/[European Securities and Markets Authority].]

[[•] is established in the EEA and is neither registered nor has it applied for registration under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation").]

[[•] is not established in the EEA but the rating it has given to the Notes is endorsed by [•], which is established in the EEA and registered under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation").]t

[[•] is not established in the EEA but is certified under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation").]

[[•] is not established in the EEA and is not certified under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation") and the rating it has given to the Notes is not endorsed by a credit rating agency established in the EEA and registered under the CRA Regulation.]

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3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER

[Save for any fees payable to the [Dealers], so far as the Issuer and the Guarantor are aware, no person involved in the offer of the Notes has an interest material to the offer. The [Dealers] and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform other services for, the Issuer, the Guarantor and their affiliates in the ordinary course of business.]/[•]/[Not Applicable]

4. R EASONS FOR THE OFFER

[See "Use of Proceeds" wording in Offering Circular.] [The Notes are intended to be issued as Green Bonds, [further particulars to be provided].] [The Issuer will allocate the net proceeds towards the financing and/or refinancing of eligible green projects (see “Use of Proceeds” section in the Offering Circular)/[specify other uses for the green bond proceeds]]

5. [Fixed Rate Notes only – YIELD [Applicable/Not Applicable]

Indication of yield: [•]

[The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]

6. Floating Rate Notes only – [Applicable/Not Applicable] HISTORIC INTEREST RATES

7. OPERATIONAL INFORMATION

ISIN: [•]

Common Code: [•]

Delivery Delivery [against/free of] payment

Names and addresses of additional [•] Paying Agent(s) (if any):

Intended to be held in a manner which would allow Eurosystem eligibility:

8. DISTRIBUTION

[Intended to be held in a manner [Yes. Note that the designation "yes" simply means that which would allow Eurosystem the Notes are intended upon issue to be deposited with eligibility: one of the ICSDs as common safekeeper [[, and registered in the name of a nominee of one of the ICSDs acting as common safekeeper,] [include this text for registered notes]] and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.] /

[No. Whilst the designation is specified as "no" at the date of this Pricing Supplement, should the Eurosystem eligibility criteria be amended in the future such that the Notes are capable of meeting them the Notes may then be deposited with one of the ICSDs as common safekeeper [[and registered in the name of a nominee of one of the

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ICSDs acting as common safekeeper,][include this text for registered notes]]. Note that this does not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.]

(i) Method of distribution: [Syndicated/Non-syndicated]

(ii) If syndicated: [Not Applicable/give names]

(a) Names of Dealers: [•]

(b) Date of subscription [•] agreement:

(c) Stabilising [Not Applicable/[•]] Manager(s) (if any):

(iii) If non-syndicated, name of [Not Applicable/give name] Dealer:

(iv) Prohibition of Sales to EEA [Applicable/Not Applicable] Retail Investors: (If the offer of the Notes is concluded prior to 1 January 2018, or on and after that date the Notes clearly do not constitute "packaged" products, "Not Applicable" should be specified. If the offer of the Notes will be concluded on or after 1 January 2018 and the Notes may constitute "packaged" products and no KID will be prepared, "Applicable" should be specified.)

(v) US Selling Restrictions [Reg. S Compliance Category 2]; [TEFRA C/TEFRA D/TEFRA not applicable]

9. PROVISIONS RELATING TO GREEN BONDS

Green Bonds: [Yes/No]

[Reviewer(s):] [Name of sustainability rating agency(ies)[ and name of third party assurance agent] and [give details of compliance opinion(s) and availability]]

[Date of Third Party Opinion(s):] [Not Applicable/give details]

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USE OF PROCEEDS

The Issuer will use the net proceeds from the issue of each Series of Notes for its general corporate purposes or as may otherwise be disclosed in the Pricing Supplement.

Notes may be issued as green bonds ("Green Bonds") on the basis of a framework to be established by the Issuer and the relevant Pricing Supplement will indicate whether or not the Notes are intended to constitute Green Bonds and will provide additional information in relation to the intended use of proceeds in respect of any Green Bonds. Any use of proceeds in connection with an issue of Green Bonds may be subject to third party review, as further described in the relevant Pricing Supplement.

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BUSINESS

History and Overview

Founded in 1927, the Group is a global automotive brand focused on the design, engineering, manufacture, distribution and sale of premium cars, as well as related parts and services. The Group's long heritage is underpinned by a reputation for safety, and it is credited with industry-leading innovations such as the introduction of the three-point safety belt, the rear-facing child safety seat and the child booster cushion.

Headquartered in Gothenburg, Sweden, the Group designs, develops, manufactures, markets and sells a range of premium cars, including sedans, wagons, cross country vehicles and SUVs. The Group's range of premium cars is recognised for its design, safety and technological innovation. In 2016, the Group sold 534,332 cars in more than 100 countries around the world, of which 14% comprised S Series models (sedans), 34% V Series models (wagons) and 52% XC Series Models (SUVs) (see "The Group's Cars" below). In the nine months ended 30 September 2017, the Group sold 413,472 cars, with the XC Series representing 48% of retail sales, the V Series representing 35% of retail sales and the S Series representing 17% of retail sales.

The Group's product ranges are headlined by the Group's Volvo XC90, which was launched in 2014 and is the first model to be built on the Group's new proprietary vehicle platform, the in-house developed Scalable Product Architecture ("SPA"), and equipped with Drive-E powertrain from the Group's Vehicle Engine Architecture ("VEA"). In 2016, the Group launched the Volvo S90 and the Volvo V90, followed by the new Volvo XC60 and Volvo XC40 in 2017, with the new S/V 60 scheduled for 2018.

The Group has a global manufacturing footprint with an integrated third-party supply chain that allows for production flexibility, responsiveness to market demand and cost optimisation. The Group owns and operates four car plants, two engine plants, and one body component plant across Europe and Asia, with an additional car plant under construction in Charleston, South Carolina, USA, planned to commence production of the next generation S60 in 2018 and the next generation XC90 in 2021. The Group has also contracted with the Geely-owned Luqiao plant in China as a contract manufacturer to which the Group will provide management and operational support. Additionally, the Group operates an assembly plant in Malaysia and will start assembly operations in India before the end of 2017. The Group has research and design centres in Europe, Asia and North America.

Following the acquisition by Geely of Volvo Car Corporation from ("Ford") in 2010, the Group implemented a strategic transformation, from a division within a large automobile group into a standalone premium car manufacturer. Between 2010 and 2015, the Group made significant investments in technology, its geographical footprint and its internal organisation to establish the foundation for future growth. With this first period of significant investment ("Phase 1") complete, the Group is now building on this foundation in the second phase of its strategic transformation ("Phase 2") and will substantially refresh its product portfolio while expanding its three-pillar geographic strategy focused on Europe, Asia-Pacific and the Americas.

The following table presents the Group's total retail sales, including retail sales in its key markets as a percentage of total retail sales, net revenue, and EBITDA for the years ended 31 December 2015 and 2016 and the nine months ended 30 September 2016 and 2017.

Nine months Nine months ended ended 30 (SEK millions, except retail sales) Year ended 31 December 30 September September

2015 2016 2016 2017

Retail Sales ...... 503,127 534,332 379,331 413,472 Europe ...... 56.0% 54.4% 54.6% 53.2% US ...... 13.9% 15.5% 15.4% 13.8% China ...... 16.2% 17.0% 16.7% 19.9% Other ...... 13.9% 13.1% 13.3% 13.1% Net Revenue ...... 164,043 180,902 125,519 149,250 EBITDA ...... 16,019 21,541 15,506 19,312 ______Other Markets includes markets such as Japan, Russia and South Korea, among others.

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Group Structure

The Issuer's principal activity is to act as the holding company of the Guarantor and the Group. The Issuer was incorporated on 7 June 2010 as a public limited liability company of indefinite duration. The registered share capital of the Issuer consists of 50,000,000 fully paid ordinary A-shares of SEK 1 in nominal value, all of which are owned by Geely Sweden Holdings AB, and 500,000 fully paid preference P-shares of SEK 1 in nominal value which are owned by institutional investors.

The Guarantor was incorporated on 11 October 1960 as a private limited liability company of indefinite duration. The Guarantor's registered share capital consists of 723,530 fully paid ordinary shares of SEK 1,000 in nominal value.

The operating activities of the Group are conducted wholly through the Guarantor and its wholly-owned subsidiaries and joint venture interests, and the Issuer has no other material activities or assets. A structure diagram for the Group is set out below. The financial statements of the Guarantor are fully consolidated in the financial statements of the Issuer.

Shanghai Geely Zhao Yuan International Investment Guarantor of Co., Ltd Issuer Volvo Car Group the Notes

100%

Geely Sweden Holdings AB

99%

Volvo Car AB Bond?

100%

Volvo Car Corporation Existing bank debt

100%

Volvo Cars (China) Investment Co Ltd Other Subsidiaries and Joint Ventures

50%

Chinese Joint Ventures

Competitive Strengths

The New Premium

Differentiated premium brand—Company with an established heritage and modern values

The Group has a long-standing history as a leader in and technological innovation. The Group's cars are currently sold in more than 100 countries worldwide. The Group believes that the long history and global appeal of the Volvo brand lies at the heart of the Group's commercial success.

The Group has been a leading innovator in safety for decades, and the Volvo brand is synonymous with leadership in passenger safety. The Group introduced the first three-point safety belt in 1959, the first rear-facing child safety seat in 1964, the first side impact protection and protection in 1991 and 1998, respectively, and the first demonstration of in 2013. The Group believes its excellence in technological innovations related to safety has also enabled it to become an early leader in autonomous driving technology, as evidenced by its participation in what, to the Group's knowledge, is the first large-scale autonomous driving pilot project on public roads, the Drive Me project in Sweden, with consumers in self-driving cars.

The Volvo brand has also long been associated with efficiency and environmental leadership. The Group launched the world's first plug-in diesel hybrid car in 2012, launched its Drive-E powertrain in 2013, and introduced, in 2015, the twin engine concept, combining an electrical motor and 4-cylinder petrol engine.

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The Group also believes that it is the first car manufacturer to commit to a 3- and 4-cylinder strategy across the Group's entire product portfolio. These innovations strengthen the quality and commercial appeal of its brand and products.

The Group's new generation of cars reflects a modern human-centric Scandinavian design focusing on increasing the premium and emotional appeal of the products, while leveraging on its safety heritage. The XC90 has been met with market and critical acclaim, winning, among others, the "Best of the Best" Product Design Award by Red Dot in 2015, Auto Express' 2015 "Car of the Year", SUV of the Year at the UK Car of the Year Awards 2016, Auto Lider's "Automotive Launch of the Year", Auto Moto & Sport's "Best Big SUV" and Automotive Innovations' "Most Innovative Car of 2015". The S90 was awarded Red Dot's Product Design Award in 2016. The new XC60 and XC40, both launched in 2017, have already received most favourable reviews and reactions. In June 2017, the XC60 was awarded "The 2017 Auto Express Premium SUV of the year" by the British auto magazine Auto Express. The strength of the Group's brand and design achievements were recognised by the international Car Design Award jury, who awarded Volvo Cars the 2016 Brand Design Language Award.

Non-complex and fully invested base modular architecture—Cost efficiencies and rapid product renewals

In 2015, the Group produced its first car on the new advanced modular architecture, SPA, which marked the completion of several years of research and development investment. SPA is highly flexible and forms the basis of all the Group's new generation mid-sized and large sedans, wagons, cross-overs and SUVs (i.e., the 60 and 90 models), substantially reducing the incremental costs associated with future models.

SPA is a modular architecture that facilitates the uses of shared modules and scalable systems and components. This allows for a wide range of cars and technologies of different complexities to be built on the same architecture. Material and component costs can be shared across different models. By maximising the number of models and units produced on the same architecture, the Group is able to reduce unit costs. SPA increases the Group's ability to leverage the increased scale of shared components across models, reduce new car development costs and the time it takes to bring new models to market and increase the flexibility of the Group's production lines.

Compact Modular Architecture ("CMA") is also a modular architecture that allows for the development of different cars with different performance levels to be fitted on the same flexible architecture, ensuring tailor-made solutions for the Geely and Volvo brands. With CMA, Volvo Cars and Geely Auto are able to cost share across models of smaller cars with different levels of performance. CMA allows Volvo Cars to offer consumers of compact cars the same type of premium engineering benefits as owners of its larger cars built on SPA. CMA has been designed from the outset to embrace electrification – offering a new Twin Engine plug-in hybrid variant designed especially for the new architecture. See further "Technology – Vehicle Architecture – Scalable Product Architecture" and – "Compact Modular Architecture" below.

Technology is shared between SPA and CMA, including powertrains and the infotainment, climate and data network and safety systems.

The platform architecture approach is mirrored in the Group's powertrain architecture, which consolidates several separate architectures into a single, proprietary architecture, VEA, launched in 2013 and consisting of a petrol and a diesel 4-cylinder engine, and a 3-cylinder engine which will be available on the XC40, together called the Drive-E powertrain. The design of these engines allows for great flexibility in terms of variants and power outputs. This flexibility also enables cost savings due to the high component commonality between individual engines (including the engine block) and production efficiencies due to increased economies of scale and easier installation. The increased commonality between engines in the range also enables greater flexibility to adapt production to changes in demand for different car models and engines.

Delivering Growth

Delivering results and positioned for growth—product launches delivering profitable growth

The Group has a diverse product portfolio to cater for different types of consumer demand. The Group's retail sales performance reflects the full diversity of this portfolio, with a balance of sales between

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different models and car sizes. For example, in the nine months ended 30 September 2017, 48% of retail sales were SUVs and cross-over models (XC series), 35% were wagons (V Series) and 17% were sedans (S Series).

The 90 models (XC, S and V) have been met with market and critical acclaim. In March 2017, the Group unveiled the new XC60 model at the , which has also been very well received. The 60 series line-up will be further renewed with the upcoming launch of the new S and V60 models. With the launch of the XC40 in September 2017, Volvo Cars expands its market presence further, positioning itself in the fast growing compact SUV segment. From 2019, every Volvo car launched will have an electric motor. This will expand the model range with the introduction of a portfolio of electrified cars, embracing fully electric cars, plug in hybrid cars and mild hybrid cars. The Group will launch five fully electric cars between 2019 and 2021, three of which will be Volvo Cars and two of which will be high performance cars from .

Three "home markets" strategy—Industrial presence, natural hedging and local product insight

The Group markets and sells its cars through a sales and distribution network in more than 100 countries across all key global regions. The Group has successfully increased the geographic diversity of its sales in recent years, particularly across Asian markets. In the nine months ended 30 September 2017, the Group sold 57% of its cars in EMEA, 27% in Asia Pacific, and 16% in the Americas.

The globally diversified sales are supported by the Group's flexible, local sourcing and production model. The Group's plants in Sweden, , China, and the forthcoming Charleston plant in the US, ensure both sourcing and manufacturing take place close to the major markets for the Group's products. Furthermore, this model allows the Group to respond quickly and efficiently to changing demand in local markets, reduces working capital requirements and, to a degree, provides a natural hedge against foreign exchange movements.

The Group's plants offer the flexibility to expand capacity with minimal or no additional capital expenditure by, for example, increasing the number of shifts operated by plant personnel or investing in more equipment. This enables the Group to increase or decrease its production levels in response to changes in market demand at short lead times and in a cost-efficient manner.

Well Positioned for Technology Shift

Leading in autonomous driving, well-positioned in electrification—Leveraging experience through value-creating partnerships

Electrification. Tighter emissions regulations are being implemented around the world, and the Group also sees growing consumer demand for electrified cars. As one of the largest manufacturers of plug-in hybrid electric cars in Europe, the Group is well positioned to meet these standards, in particular the European Union fleet emissions targets. The Group has designed each of its platform architectures, SPA and CMA, to support both plug-in and pure electric powertrain configurations and it believes that this preparation for electrification, together with its strategy of focusing on 3- and 4-cylinder Drive-E powertrains, will serve to further strengthen its position in respect of emissions regulations while also meeting consumer demands. In July 2017, the Group announced that every Volvo car model it launches from 2019 will have an electric motor, marking an historic transition away from cars that only have an internal combustion engine. This places electrification at the core of the Group's future business. The Group will introduce a portfolio of electrified cars across its model range, embracing fully electric cars, plug in hybrid cars and mild hybrid cars. The Group will launch five fully electric cars between 2019 and 2021, see "Delivery Growth" above.

Autonomous driving. The Group believes that it is on the technological forefront in the development and application of autonomous driving technologies, and that it is uniquely positioned in this area. In order for autonomous driving to realise its full potential, it is key for consumers to have complete trust in the car, and the Group believes that Volvo's leadership in safety positions it as a natural choice for the consumer in search of autonomous driving. All of the Group's new 40, 60 and 90 models include Pilot Assist, the semi-autonomous driving feature which supports the driver with automatic braking and steering of the car. In the development of autonomous driving, the Group is focusing on partnerships which allow the Group to be more nimble in its operations. The Group concentrates its efforts in this area around three pillars: hardware, software and consumers.

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Hardware. In August 2016, the Group signed an agreement with to establish a jointly-owned project to build base vehicles that can be used to develop fully autonomous driverless cars. The base vehicles are manufactured by the Group and then purchased from the Group by Uber. The Group and Uber are contributing a combined US$300 million to the project. The Group expects this will lead to increased economies of scale on the SPA platform and position the Group as a world leader of hardware solutions for autonomous driving.

Software. In December 2016, the Group signed a framework agreement to pursue a new tech collaboration with Autoliv, and founded a new jointly-owned company, Zenuity AB, to develop next generation autonomous driving software. The company, headquartered in Gothenburg, began operations in April 2017. The aim is that the joint venture will be positioned as a world-leading authority in software development and solutions for autonomous driving, which will allow for faster introduction of new software developments in Volvo cars. Volvo Cars contributes intellectual property, know-how and personnel, and both joint venture parties license and transfer intellectual property for their advanced driver assistance system to the joint venture. Zenuity will, together with Volvo Cars and Autoliv, collaborate with NVIDIA, to develop advanced systems and software for self-driving cars. In May 2017, the Group announced a partnership with Android Engineering in order to develop the next generation of in-car infotainment and connectivity solutions for Volvo cars, based on the Android platform. These new solutions will be introduced on new Volvo Cars models from 2019.

Consumers. The "Drive Me" project in Gothenburg, Sweden is, to the Group's knowledge, the world's first large-scale autonomous driving pilot project to place consumers in self-driving cars on public roads. Similar projects will be launched in London and China. The cars have hands-off and feet-off capabilities and operate in special autonomous driving zones around Gothenburg, powered by what the Group calls the Autonomous Driving Brain. The pilot commenced in 2017.

New ways to consumers—E-commerce, car sharing and service products

In keeping with its human-centric approach to product design, the Group has integrated into its cars industry-leading connectivity technologies including Sensus Connect©, Volvo On Call©, Apple CarPlay© and Android Auto©. Volvo On Call© was first launched in 2001. It offers comprehensive connected car services such as a remote safety feature that provides safety tracking services in case of an accident, breakdown or theft, and allows the consumer to control the car remotely. The Group is one of the few original equipment manufacturers ("OEM") to incorporate this connectivity technology into its cars. The success of Volvo On Call© shows the benefits of a partnership approach with other leading companies to ensure the Group's consumers have the best technology incorporated seamlessly into their cars.

The Group also believes it is important to develop new ways to interact with consumers. For example, it is working with its dealership network to be at the forefront for offerings through e-commerce channels. In 2014, the Group commenced digital commerce operations with the exclusive online launch of 1,927 all new Volvo XC90 First Edition Cars. The success of the XC90 First Edition (with all cars sold within 47 hours) demonstrates the power of digital commerce for the Group's strategic plan. The Group is also reaching consumers through new car ownership models. The Group owns the car sharing company Sunfleet, one of the world's first car sharing companies, founded in 1998. The company operates over 1,200 cars in almost 50 locations across Sweden, with around 50,000 subscribing consumers. The Group will selectively expand Sunfleet's operations and review new opportunities in the car sharing market.

Care by Volvo, a new subscription based ownership model, was rolled out in several markets in September 2017. This new subscription based model is focusing on access rather than ownership and allows customers to choose the Volvo car that best suits their needs and pay a monthly fee for that car. The new XC40 is the first model on which Care by Volvo is offered.

In September 2017, the Group also announced the acquisition of the platform, technology, key staff and other assets of the company Luxe, a US based premium valet and concierge service. This acquisition provides Volvo Cars with enhanced capability in the development of digital services that simplify the consumer experience. The software and technology platform, as well as key data scientists, application developers and software engineers currently employed by Luxe, will join Volvo's digital organisation in Silicon Valley.

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China Differentiation and Solid Governance

Unique China positioning—Committed shareholder with public automotive track record

The Group's industrial arrangement with Geely provides it with a unique position in the Chinese market and allows it to capture the benefits from this industrial structure globally. This structure enables the Group to more easily leverage its production bases in China to export both components and cars to different markets, and flexibly shift its production between domestic manufacturing and imports to respond to different levels of demand. The structure also positions the Group as the only international passenger car OEM to consolidate fully the financial results of its China joint ventures, increasing the transparency of the Group's financial results.

The Group benefits from a highly committed majority shareholder, Geely. Geely is also the largest shareholder in Geely Automotive Holdings Ltd. ("Geely Automotive"), one of China's largest non-state owned automotive manufacturers and publicly listed on the Hong Kong Stock Exchange. Geely supports the Group's operational independence while also facilitating important co-operation with Geely Automotive. For example, the Group is co-operating with Ningbo Geely and its wholly owned subsidiary, CEVT, to share development costs in CMA, which forms the basis of the Group's upcoming C-segment cars (i.e., the 40 models).

In September 2017, the Group and Geely completed the formation of two new entities to share existing and future technology and provide economies of scale that will allow them to develop next generation electrified vehicle technology as well as focusing on shared vehicle architectures and powertrain development. As a result, a new technology joint venture has been formed called GV Automobile Technology (Ningbo) Co. Ltd. It is 50/50 owned by Volvo Cars and Geely and headquartered in China with a subsidiary in Gothenburg, Sweden. Furthermore, a separate LYNK & CO company, fully responsible for the LYNK & CO car line, will be formed, jointly owned and controlled (but not consolidated) by Volvo Cars, Geely and Geely Automotive, with a newly constituted board of directors. Volvo Cars will hold 30 per cent of the shares in LYNK & CO, while Geely Automotive and Geely will hold 50 and 20 per cent, respectively. The formation of the LYNK & CO company is subject to relevant corporate and authority approvals.

Strong management team

The Group is led by a highly experienced management team which combines individuals with deep knowledge and experience of Volvo Cars and extensive industry experience. The CEO, Håkan Samuelsson, was formerly CEO of DAX-listed MAN from 2005 to 2009. The Group is also supported by an independent, international and experienced Board of Directors, which includes a wealth of experience from the automotive, technology industries, retail, capital markets and other sectors.

The Group's Cars

The Group designs, develops, manufactures and sells a range of premium cars, including sedans, wagons, cross country vehicles and SUVs. The Group's range of premium cars is recognised for its design, safety and technological innovation.

The Group categorises its models by model range (40, 60, and 90) as well body type ( (S), Estate (V) and SUV (XC)). In addition, it offers variants such as R-Design, Inscription, Cross Country and Excellence on certain models to cater for consumer demands in respect of both driving experience, comfort and styling.

The table below presents the Group's retail sales by model for the years ended 31 December 2015 and 2016 and the nine months ended 30 September 2016 and 2017.

Nine months ended Year ended 31 December 30 September

2015 2016 2016 2017 XC60/XC60 Classic ...... 159,617 161,092 111,937 139,441 V40/V40 Cross Country ...... 106,631 101,380 71,790 69,116 XC90 ...... 40,621 92,522 66,347 60,596 V90/V90 Cross Country ...... - 7,674 1,278 37,789 V60/V60 Cross Country ...... 61,341 60,637 41,785 37,940

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Nine months ended Year ended 31 December 30 September

2015 2016 2016 2017 S60/S60L/S60 Cross Country ...... 64,078 61,941 43,748 39,328 S90/S90L ...... - 7,383 2,594 28,933 Other (discontinued models) ...... 70,839 42,703 39,850 329

Total ...... 503,127 534,332 379,329 413,472

Design

The Group's cars are designed and developed by award-winning teams at design centers in Sweden, China and the United States. The Group's three-stage design process focuses on functionality, quality and precision of detail and visual expression. Inspired by the design of modern high-tech sports equipment, the Group believes that its cars are sophisticated, safe and capable cars for people with an active lifestyle. In addition, the Group's Swedish heritage and strong connection to the Scandinavian lifestyle is reflected in the Group's "Scandinavian Design".

Technology

The Group has invested heavily in the development of technologically advanced cars, and is at the forefront of advances to capitalise on current premium market trends, including vehicle architecture, engine architecture, safety, electrification, autonomous driving, CO2 emissions and connectivity.

Vehicle Architecture

With the development and introduction of SPA and CMA, the Group consolidates five existing architectures into two new flexible modular architectures, taking advantage of commonality between SPA and CMA creating economies of scale, lowering new model development costs and reducing time to market. Both architectures are prepared for electrification with only minor alterations and additional development.

Scalable Product Architecture

The new Volvo XC90 was the first car built on SPA. SPA is a global, full-size architecture that was developed in-house between 2010 and 2014. SPA utilises shared modules and scalable systems and components, allowing a wide range of cars, all of differing complexity, to be fitted on the same architecture, generating significant economies of scale and cost optimisation. SPA is designed from the outset to embrace electrification.

Compact Modular Architecture

Since 2014, the Group has been co-developing with Ningbo Geely and its wholly owned subsidiary, CEVT, the next-generation C-segment vehicle architecture for smaller compact cars, CMA, which forms the basis of its C-segment cars (i.e., the 40 models). The development costs for CMA are shared equally between Ningbo Geely and the Group. The cash investment for research and development required to develop this architecture is being funded by Ningbo Geely. The Group will pay its share of the research and development costs when the architecture is fully developed and models based on it are launched. The technology, however, will be owned by Ningbo Geely, and the Group has an irrevocable, perpetual licence to use such technology.

CMA is a modular architecture that allows for the development of different cars with different performance levels to be fitted on the same architecture, ensuring tailor made solutions for the Geely and Volvo Cars brands. With CMA, the Group and Geely Auto are able to cost share across models of smaller cars with different levels of performance, and leverage Geely's Chinese sourcing and procurement capabilities. CMA allows Volvo Cars to offer consumers of compact cars the same type of premium engineering benefits as owners of its larger cars built on SPA. CMA has been designed from the outset to embrace electrification and will offer new Twin Engine plug-in hybrids and battery variants.

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Powertrain Architecture

In 2013, the Group introduced a new powertrain family and architecture, Volvo Engine Architecture, featuring high specific performance, a modular lightweight base powertrain and low fuel consumption. VEA replaces seven architectures with one single architecture together with two engines, called the Drive-E powertrain. The Drive-E powertrain consists of two 4-cylinder engines (diesel and petrol versions) prepared for future electrification that cover the full powertrain from entry performance to high performance. Through the use of VEA, the Group is able to take advantage of economies of scale and production efficiency and flexibility due to the similarity in powertrain mountings and component commonality. Additionally, in collaboration with Geely, the Group is developing a new 3-cylinder engine to be included in the Drive-E family.

Safety

Safety technology development is a focus area for the Group. The Group has developed and introduced many safety features, including the three-point safety belt, the rear-facing child safety seat and child booster cushion features and side impact protection and whiplash protection. Further achievements in safety include Driver Alert in 2005 and the low speed collision avoidance system, pedestrian air-bag and cyclist detection with full auto-brake from 2008 to 2013.

New Volvo car models offer highly comprehensive and technologically sophisticated safety packages, including two world first safety technologies, a run-off road protection package and auto brake at intersection capability. The XC90, as well as the S and V90, have been awarded five stars and achieved top ratings in their 2015 Euro NCAP tests, respectively. The XC90 received a score of 100% in the Safety Assist category and being the first car from any manufacturer to achieve the maximum score in two Autonomous Emergency Braking tests, AEB City and AEB Interurban. Both the Volvo S90 and the Volvo V90 include one of the most advanced standard safety packages on the market, with the world first function of large animal detection which provides an intuitive warning and brake support to help the driver avoid or mitigate a collision with large animals. The XC60 introduced city safety with steering support, which assists the driver to take evasive action at speeds between 50 and 100 km/h. With the XC40, the Group has introduced a so called run-off road mitigation system that detects if a driver is about to leave the road unintentionally.

With run-off road accidents being a common cause of fatal traffic accidents, the Group has developed a run-off road protection package, which includes Safe Positioning, Lane Keeping Aid, Driver Alert Control and Rest Stop Guidance, to protect occupants from run-off road scenarios. The Safe Positioning capability detects a run-off road scenario and tightens the front safety belts to keep occupants in position. To prevent such run-off road scenarios, safety technologies such as the Lane Keeping Aid apply extra steering torque if the car is about to leave the lane unintentionally, while Driver Alert Control detects and warns inattentive drivers and Rest Stop Guidance directs drivers to the nearest rest area. City Safety, the Group's standard offering of auto brake functions, includes collision-avoidance and mitigation technologies as well as the world's first auto brake at intersection capability.

Research & Development

The Group's highly advanced global product development platform consists of research and development facilities located in Sweden, , China and the United States. The Group's research and development platform supports its long-term strategic mission to be the world's most progressive and desired premium car company and to make people's lives less complicated. The Group continues to invest steadily in research and development in order to strengthen the Group's product portfolio to meet consumer and regulatory demands, with a focus on technology and fuel efficiency. In recent years, research and development has focused on electrification, autonomous driving technologies and connectivity. In co-operation with other companies and institutions Volvo Cars has developed CMA, a three-cylinder engine, new connectivity and on-demand solutions. The following table details the Group's research and development expenditures for the years ended 31 December 2015 and 2016 and the nine-month periods ended 30 September 2016 and 2017.

Nine-month period ended Research and development Year ended 31 December 30 September (SEK in millions) 2015 2016 2016 2017

Research and development spending ...... -9,996 -11,488 -9,127 -10,526

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Nine-month period ended Research and development Year ended 31 December 30 September (SEK in millions) 2015 2016 2016 2017

Capitalised development costs ...... 4,494 6,177 4,237 5,472 Amortisation and depreciation of research and development ...... -3,301 -4,063 -3,002 -3,016 Research and development expenses ...... -8,803 -9,374 -7,892 -8,214

One of the main focuses for product development is continuously to improve efficiency and reduce lead times for cars. With shorter lead times and higher efficiency for the same research and development spend, the Group will be better positioned to respond to changing consumer needs.

Traffic Accident Research Team

In 1970, the Group established a comprehensive traffic accident research program (the "Traffic Accident Research Team"), which collects data from traffic accidents with Volvo cars around Sweden. The research and development teams use this data when creating and evaluating design programs. Additional data is further gathered by the Traffic Accident Research Team through accident reconstructions, computer simulations and crash tests in the Group's state-of-the-art crash laboratory in , Sweden, which is used in the design process.

Academic Collaboration

The Group has several on-going collaborations with universities to foster research and development and develop new technologies. Additionally, some of the Group's employees teach at universities in Sweden and collaborate with students and researchers on research initiatives.

Manufacturing & Purchasing

The Group has a global manufacturing footprint with a globally integrated third-party supply chain that is based on the overall value chain principle, "we produce where we sell and we source where we produce". This strategy reduces costs and facilitates just-in-time delivery, flexibility and responsiveness to market and business demands. Additionally, it provides natural hedging against currency rate movements, ensuring the competitiveness of the Group's products in local markets. The following map shows the Group's administrative, production, design and research and development centers. In addition to the plants presented on the map, the Group also has an assembly plant in Malaysia and will start assembly operations in India before the end of 2017.

______(1) Start of Production.

Manufacturing

As of 30 September 2017, the Group owned and operated four car plants, one assembly plant, two engine plants and a number of other component production plants in Sweden, Belgium, China and Malaysia. The

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Group is constructing an additional car plant in South Carolina, United States, to become operational in 2018. The Group has also contracted with the Geely-owned Luqiao plant in China as a contract manufacturer to which it will provide management and operational support to ensure that the plant operates according to Volvo Cars' standards. Due to the Chinese regulatory framework, the Group owns a 50% interest in its plants in China, with Geely owning the remaining 50% interest, while its plants outside of China are wholly owned. All of the Group's facilities utilise global technology and global sourcing and adhere to the Group's global Volvo Cars Manufacturing System ("VCMS"), enabling each facility to operate under the same global quality standards. All of the Group's plants adhere to the Volvo Cars Global Environmental Standards, which ensure that the Group's manufacturing operations limit their environmental impact. The Group measures capacity at its plants based on theoretical maximum expandable capacity and operational capacity. Theoretical maximum expandable capacity states the potential of a fully installed and utilised plant. Operational capacity states the current utilisation. The Group manages the logistics of its production materials and vehicles in-house.

Purchasing

The Group aims to implement its overall value chain principle in all aspects of production and seeks to source materials in the regions where its plants are located. The Group also believes that its ability to integrate suppliers into the process of car development and production is an important component of its competitive position. The Group has long-standing, strong relationships with many of its key tier 1 suppliers, which typically participate in the development phase of new models and invest alongside its plants to ensure a quick and efficient supply of key components and systems. The Group's purchasing team works closely with its research and development team, and has long-standing relationships with a broad base of suppliers across the world, enabling the Group to maximise technical expertise and optimise costs.

The Group believes that the diverse nature of its supplier base allows it to have reliable supply sources, and sufficient supplier competition to ensure cost optimisation. The Group has approximately 800 business partners producing materials for serial production and over 3,500 preferred suppliers delivering indirect services and products. The diversity of the Group's supplier base has enabled it to select suppliers that have the technological expertise required to produce increasingly sophisticated cars with industry-leading technologies. The Group aims to have all of its suppliers meet the criteria of the Group's Supplier Assessment Program. Under the Group's Supplier Assessment Program, suppliers are evaluated on their technical and development capabilities, as well as on quality standards and daily operations. In line with its sustainability focus, suppliers must meet social and environmental standards set by the Group. The Supplier Assessment Program also includes certain on-site audits as well as sustainability self-assessment questionnaires.

The principal materials and components required by the Group for use in its cars are steel and aluminium in sheet (for in-house stamping) or externally pre-stamped form, aluminium castings and extrusions, iron/steel castings and forgings. Special initiatives are also undertaken to reduce material consumption through value engineering and value analysis techniques.

Marketing, Sales and Customer Service

The Group has a comprehensive marketing program which focuses on brand campaigns, marketing tools, digital leadership and consumers' retail and ownership experiences. Digital commerce is one of the Group's strategic focus areas. Working in collaboration with the Group's dealer network around the world, the Group aims to expand its digital commerce activities and use the online channel and tools, including the re-launched car configurator, to enhance the online buying experience as well as the physical network and ownership experience.

The Group has an extensive and growing independent dealership and aftermarket sales network. The network is the principal route to market and core to ensuring that the Volvo brand is widely represented and well-positioned in the premium car sector globally. The Group also uses pop-up stores and downtown showrooms.

The Group has a global network of approximately 2,300 sales outlets in more than 100 countries.

Volvo Selekt is the Group's global used car program, offered by over 1,000 certified dealers across 30 countries. The Volvo Selekt cars are prepared to the highest standards globally and consumers benefit

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from 12 months warranty, roadside assistance and a 30-day exchange program. Since the program was launched in 2011, annual sales have grown from 26,600 to more than 82,000 units in 2016.

Volvo Car Financial Services (VCFS)

VCFS, provides Volvo-branded financial, insurance and related products and services for Volvo Cars consumers and dealers. VCFS operates through strategic partnerships and joint ventures with financing partners outside of the Group. One of the benefits of these partnerships is that they often require limited Volvo Cars fully dedicated teams, whereby the Group can leverage the partners' infrastructure, geographical presence and competitive funding. VCFS' key partners include Santander, BNP Paribas, Volvofinans Bank (50% owned by Volvo Cars and non-consolidated), Bank of America, Société Générale, Nordea, CITIC and PAB.

Employees

The Group has an objective to become the employer of choice that attracts the best people available. Having an effective workforce and human resources strategy is fundamental to the Group's vision of becoming the world's most progressive and desired premium car brand. Through leadership development programs, numerous internal initiatives to increase product knowledge and common awareness of Volvo Cars activities and a global change program aimed at creating an attractive and efficient workplace structured around employees and their activities, the Group strives to create a suitable and structured working environment.

Becoming the employer of choice will be enabled through the Group's culture, leadership and competence. The Group is recognised as a top employer in Belgium, China and Sweden, including being listed on the Universum list of the world's most attractive employers since 2012.

During the third quarter of 2017, the Group employed on average approximately 36,000 full time employees.

The Group's Diversity Plan is an integral part of Volvo Cars and includes a series of activities to improve training and utilise diversity within the company. The focus areas within the diversity plan include gender diversity and a zero tolerance policy for harassment and discrimination.

The Group believes that it has positive relations with labour unions both on an industry-wide basis and at a local level. There have been no strikes or major labour disputes over the last 20 years, although the majority of the Group's employees are members of trade unions. Collective bargaining agreements are also in place in Sweden and Belgium. The Group believes that its strong relationships between unions and management have enabled the Group to maintain a competitive cost base, while preserving a highly skilled and motivated manufacturing workforce.

Intellectual Property

The Group actively protects all of its intellectual property developed. The Group files patent applications in Europe and around the world (including the United States) to protect technology and improvements considered important to its business. No single patent is material to its business as a whole. Additionally, the Group owns registered trademarks, designs and patents registered in several countries and across a number of classes.

Agreement with Ford

As part of the Group's separation from Ford in August 2010, a number of continuing bilateral supply and licensing agreements remain in place between Ford and Volvo Cars in the areas of engineering support, tools and intellectual property rights. All product-related intellectual property developed by Volvo Cars under Ford's ownership is owned by Ford. Intellectual property developed by Volvo Cars after Geely's acquisition is primarily owned by Volvo Cars.

There are extensive royalty-free patent assignments and intellectual property licensing agreements in place between Ford and Volvo Cars in relation to the intellectual property developed during Ford's ownership of Volvo Cars covering patents, other non-patented intellectual property and certain confidential information. The overall purpose of the assignments and licence agreements was for the

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Group to be able to continue its current and future business following the sale by Ford. The agreements are still effective, but will decrease in importance as the Group introduces cars based on new technology.

Agreement with AB Volvo

The Volvo brand name is owned by Volvo Trademark Holding AB, an entity that is jointly owned by AB Volvo and Volvo Cars. The Group has the right to use the brand name indefinitely for passenger cars, light trucks with pay-load up to 1,500 kilograms, sport utility vehicles and other vehicles while AB Volvo has the right to use the brand name for trucks, buses, construction equipment, marine and industrial engines, aerospace equipment and all other products.

Agreement with Ningbo Geely

The Group has an irrevocable, perpetual licence to the intellectual property developed as part of the CMA collaboration with Ningbo Geely and CEVT.

Chinese Joint Ventures

As a result of the Chinese Joint Ventures, the Group is uniquely positioned with Geely as its joint venture partner, enabling quick decision-making in China and financial transparency. The incorporation of the Chinese Joint Ventures is an important step towards the long term objective of capturing growth and sourcing potential in China while simplifying the Group's legal structure.

The Group holds a 50% interest in each of the Chinese Joint Ventures. Additionally, Daqing Volvo Car Manufacturing Co., Ltd acquired from Shanghai Geely holds 100% of the shares in three other entities, including Volvo Car (Asia Pacific). Volvo Car (Asia Pacific) holds 100% of the shares of Zhongjia Automobile Manufacturing (Chengdu) Co., Ltd., a Chinese entity that owns the Chengdu car plant. The Group also has the power to control these entities through shareholder agreements and consolidates them in its accounts

Polestar

In July 2015, the Group completed the acquisition of Polestar Performance AB, the Swedish high performance car company, and Polestar Holding AB, which is the owner of the Polestar trademarks. The Group did not acquire the racing division of Polestar. Volvo Cars and Polestar share a long history; they have been working in motor sports since 1996 and in recent years, cooperated in developing Polestar versions of Volvo cars. In June 2017, it was announced that Polestar was to become a new separately- branded electrified global high performance car company. At the same time, it was announced that Thomas Ingenlath would assume the position of Chief Executive Officer at Polestar.

In October 2017, The Group and Geely announced that they will jointly invest RMB 5 billion to finance the initial phase of Polestar’s product, brand and industrial development. The investment will be used, among other things, to establish Polestar manufacturing facility in Chengdu, China. Volvo Cars and Polestar will also benefit from synergies in the development of next generation technologies such as shared procurement costs, joint development and economies of scale. Simultaneously with the announcement, Polestar presented its first car model, the , to go into production in 2019. This model will be followed by the model, which will be the first fully- launched by the Group.

Insurance

The Group has its own captive insurance company, Volvo Car Insurance AB, which has a captive insurance licence from the Swedish Financial Supervisory Authority (Finansinspektionen). Volvo Car Insurance AB insures part of the group's risks in relation to property damage and business interruption, general and products liability and transport.

Legal Proceedings

The Group is party to various litigation matters, including regulatory and administrative proceedings, arising out of the normal course of business. The Group is not party to any legal proceedings at the present time that it believes could reasonably be expected to have a material adverse effect on its

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operations or consolidated financial position. Provisions or contingent liabilities have been disclosed in the Group's financial statements where it is reasonably estimated that a liability could arise.

The Group is not in breach of any applicable environmental laws, in a manner that could reasonably be expected to have a material adverse effect on its operations or consolidated financial position. Provisions or contingent liabilities have been disclosed in the Group's financial statements where it is reasonably estimated that a liability could arise.

Regulation

The worldwide automotive industry is subject to various laws and governmental regulations including those related to vehicle design and safety and environmental matters such as exhaust and evaporative emissions, fuel economy, greenhouse gas emissions, noise, and pollution. In many jurisdictions, Volvo Cars and other manufacturers are subject to increasingly stringent vehicle emission control standards governing vehicle exhaust and evaporative emissions and related matters. Volvo Cars and other manufacturers face motor vehicle fuel economy and greenhouse gas ("GHG") emissions regulations that are ratcheting up fuel economy requirements and ratcheting down permitted GHG emissions levels over time. Automotive manufacturers such as Volvo Cars are required to implement safety measures including recalls for vehicles that do not or may not comply with governmental safety standards. Volvo Cars' current and potentially former manufacturing and assembly operations are subject to laws regulating the emission, discharge, release, and disposal of pollutants, hazardous substances, and wastes. Various other environmental, health, and safety compliance and permitting requirements apply to Volvo Cars' facilities. Volvo Cars has incurred, and expects to incur in the future, significant costs in complying with these regulations.

Board of Directors

The Board of Directors of the Issuer (the "Board") consists of ten members nominated and elected by the Issuer's owners, as well as three union representatives. The Swedish Corporate Governance Code, which the Group adheres to voluntarily, (Sw. Svensk kod för bolagsstyrning) requires that a majority of the members of the Board are independent of both the Issuer and its management and at least two of the members of the Board are independent of both the Issuer and its major shareholders. The table below sets out the names and ages of the members of the Board and the year of their appointment.

Year first Name Born Position appointed

Li Shufu ...... 1963 Chairman 2010 Mikael Olsson ...... 1957 Vice Chairman 2013 Winnie K.W. Fok ...... 1956 Director 2010 Li Donghui ...... 1970 Director 2012 Lone Fønss Schrøder ...... 1960 Director 2010 Dr. Peter Zhang ...... 1966 Director 2010 Håkan Samuelsson ...... 1951 Director 2010 Carl-Peter Forster ...... 1954 Director 2013 Thomas Johnstone...... 1955 Director 2015 Betsy Atkins ...... 1953 Director 2016 Glenn Bergström ...... 1955 Union Representative 2009 Marko Peltonen ...... 1965 Union Representative 2006 Jörgen Olsson ...... 1968 Union Representative 2016 Björn Ohlsson ...... 1963 Deputy Union Representative 2009 Anna Margitin ...... 1969 Deputy Union Representative 2017

Li Shufu. Mr. Li is the Chairman of the Issuer and the Founder and Chairman of Geely. Mr. Li started his career in the refrigerator and refrigerator parts manufacturing business in 1986, and then transferred to motorcycle manufacturing in 1993. In 1997, he entered the automobile manufacturing industry and has been devoted to the development of China's auto industry over the past two decades. Under Mr. Li's leadership, Geely has been committed to independent innovation and development. Geely has been undergoing a strategic transformation since 2007, including the acquisition of Volvo Cars in 2010. Mr. Li has received numerous awards, including the "Top 10 Private Sector Entrepreneurs in China", "Outstanding Figures in Chinese Automotive Industry", "Top 10 Philanthropists in China" and 2009 CCTV Top 10 Businessmen of the Year. Mr Li is also Vice Chairman of the China Association of Automobile Manufacturers (CAAM) and Vice Chairman of the Chinese Non-Government Education Association.

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Mikael Olsson. Mr. Olsson is the Vice Chairman of the Board. Mr. Olsson is a former President and CEO of IKEA Group, where he worked for more than 30 years and was a member of the group's executive management for almost 20 years. During his CEO years, Mr. Olsson was chairman of the board of IKEA of Sweden AB (range development and design), the IKEA Industry Group (production), IKEA China Holdings as well as a number of Group Committees. Before taking on the role of CEO, Mr. Olsson chaired the board of numerous IKEA retail companies in Europe, the United States and Canada, as well as numerous IKEA business councils and group development projects. Mr. Olsson also currently serves as a member of the boards of directors of Ikano S.A., Tesco PLC, Lindengruppen AB and The Schiphol Group.

Winnie K.W. Fok. Ms. Fok is a Director of the Board. Ms. Fok was the Chief Executive Officer of EQT Partners Asia Limited until 2010. She joined EQT Partners Asia in 2000 as Managing Director and was appointed CEO in 2001. Prior to joining EQT Partners Asia, Ms. Fok was Managing Director of CEF New Asia Partners. From 1994 to 1998, she was the Director and co-head of Peregrine Direct Investments Ltd. In April 2004, Ms. Fok became a Board member of Aktiebolaget SKF (SKF) based in Gothenburg, Sweden. SKF is listed on the OM Stockholm Stock Exchange. Ms. Fok also currently serves as a member of the boards of directors of G4S Plc., Kemira Oyj and Skandinaviska Enskilda Banken AB. Ms. Fok has more than 22 years of experience in corporate advisory and direct investments. She is also a fellow of CPA Australia, an associate member of the Hong Kong Institute of Certified Public Accountants and a member of the Institute of Chartered Accountants in England and Wales. Ms Fok is also a member of the board of G4S Plc, Kemira Oyj and HOPU Investments Co. Ltd., and a member of the board and audit committee of Skandinaviska Enskilda Banken AB.

Li Donghui. Mr. Donghui is a Director of the Board. Mr. Donghui has extensive experience within the automotive sector. In the late 1990s, he was a member of management at ASIMCO Braking System, after which he moved to Chinese manufacturer Brilliance and was involved in the company's partnership with BMW. Between 2006 and 2009, he worked at U.S. automotive conglomerate . He subsequently served as CFO at Chinese machinery manufacturer Liugong before joining Geely in 2011. Mr. Donghui has been a member of the board of directors of Zhejiang Geely Holding Group Co., Ltd since 2011.

Lone Fønss Schrøder. Ms. Fønss Schrøder is a Director of the Board. Ms. Fønss Schrøder started her career at A.P. Möller-Maersk A/S, where she worked for more than 20 years and held several senior positions. From 2005 to 2010, she served as President and CEO of Wallenius Lines, a leading provider of global factory-to-dealer transport solutions for, among others, the automotive industry. Ms. Fønss Schrøder has extensive experience across the automotive logistics industry. Ms. Fønss Schrøder also currently serves in various roles on the boards of SAXO Bank, NKT A/S, Valmet Oy, and Aker Solutions ASA.

Dr. Peter Zhang. Dr. Zhang is a Director of the Board. Dr. Zhang joined Geely Automobile in February 2007 as Vice President, in charge of Internal Control and International Business, and until 2014, served on the board of directors of various Geely Automobile Group companies. He played an important role in Geely's acquisition of Volvo Cars throughout the deal process. He worked for major multinational companies for more than 10 years, with a variety of roles spanning from sales, business development, operational management, strategy and planning, and finance.

Håkan Samuelsson. Mr. Samuelsson is a Director of the Board and currently acts as President and CEO. Mr. Samuelsson was appointed President and CEO in October 2012. Mr. Samuelsson started his professional career in 1977 at Scania Group ("Scania"), where he worked for more than 20 years. Mr. Samuelsson held leading positions within Scania's technical division before he joined the executive board in 1996. He brought his truck experience from Scania to MAN AG in 2000 and became CEO of MAN in 2005, and initiated a broad restructuring of the group. Mr. Samuelsson also currently serves on the board of directors of Teknikföretagen.

Carl-Peter Forster. Mr. Forster is a Director of the Board. Mr. Forster started his career at McKinsey & Company as a management consultant in 1982. After four years there, he joined BMW in Munich, where he became a member of the Executive Board in 1999 as head of global manufacturing. In 2001, he joined the European division of and became Managing Director of Opel and Vice President of GM Europe. In 2006, he became CEO and President of GM Europe and joined the parent company's Global Automotive Strategy Board. After leaving General Motors, he became Group CEO at , where he was responsible for the Jaguar and brands. In 2013, he joined the boards of Geely Automotive Holdings and the Issuer. Mr. Foster also currently serves as Chairman of the boards of

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directors of ZMDi, Friedola Tech GmbH and Lead Equities AG and as a member of the boards of directors of Gordon Murray Design Ltd, The Mobility House AG, Group Holdings Ltd, IMI Plc, London Taxi Company, CEVT AB and Rexam Plc.

Thomas Johnstone. Mr. Johnstone is a Director of the Board. Mr. Johnstone has over 38 years' experience within the SKF Group in Gothenburg, Sweden, and previously served as President and CEO. Mr. Johnstone left the SKF Group on 31 December 2014 and has extensive industrial experience in the automotive industry. Mr. Johnstone currently serves as a member of the boards of directors of Husquarna AB and Investor AB.

Betsy Atkins. Ms. Atkins is a Director of the Board. Ms. Atkins is the founder and CEO of Baja Corp, an American early-stage venture capital firm focusing on investments in global technology companies. Ms. Atkins also acts as advisor and sits on the boards of several companies, including Baja Corp and SAP AG.

Glenn Bergström. Mr. Bergström is a union representative on the Board.

Marko Peltonen. Mr. Peltonen is a union representative on the Board.

Jörgen Olsson. Mr. Olsson is a union representative on the Board.

Björn Ohlsson. Mr. Ohlsson is a deputy union representative on the Board.

Anna Margitin. Ms. Margitin is a deputy union representative on the Board.

Management Team

The table below sets forth the name and ages of certain current executive officers of the Issuer.

Name Born Position

Håkan Samuelsson ...... 1951 President; Chief Executive Officer Hans Oscarsson ...... 1965 Senior Vice President; Finance and Chief Financial Officer Björn Annwall ...... 1975 Senior Vice President, Strategy, Brand & Retail Martina Buchauser ...... 1966 Senior Vice President, Procurement Hanna Fager ...... 1975 Senior Vice President, Human Resources Henrik Green ...... 1973 Senior Vice President, Research and Development Anders Gustafsson ...... 1968 Senior Vice President, Americas Maria Hemberg ...... 1964 Senior Vice President, Group Legal and General Counsel David Ibison ...... 1966 Senior Vice President, Corporate Communications Thomas Ingenlath ...... 1964 Chief Design Officer Lex Kerssemakers ...... 1960 Senior Vice President EMEA Atif Rafiq ...... 1973 Senior Vice President Group IT & Chief Digital Officer Javier Varela ...... 1964 Senior Vice President, Manufacturing & Logistics Paul Welander ...... 1958 Senior Vice President, Vehicle Line Management Xiaolin Yuan ...... 1969 Senior Vice President, Asia Pacific

Håkan Samuelsson. See "—Board of Directors—Håkan Samuelsson".

Hans Oscarsson. Mr. Oscarsson is Senior Vice President and CFO. Mr. Oscarsson has worked at Volvo Cars since 1990 and has extensive experience as a controller and CFO. Mr. Oscarsson was temporary CFO for the Issuer during 2010 to 2011, and with that fulfilled a key role during Geely's acquisition of Volvo Cars.

Björn Annwall. Mr. Annwall is Senior Vice President, Strategy, Brand & Retail. In October 2015, Mr. Annwall joined Volvo Cars. Prior to joining Volvo Cars, Mr. Annwall was a partner at McKinsey & Company, where he worked on growth strategy, marketing and sales and transformation, primarily within the automotive and assembly sectors.

Martina Buchhauser. Ms. Buchhauser is Senior Vice President Procurement, and holds a master's degree in management from Stanford University in California. Before joining Volvo Cars, she was BMW's Senior Vice President of Purchasing and Supplier Network for Interior, and has previously worked in various senior purchasing positions at MAN and General Motors since the mid-1980s.

Hanna Fager. Ms. Fager is Senior Vice President, Human Resources. Ms. Fager joined Volvo Cars in 2002, and has held various positions within Compensation & Benefits and Human Resources, including

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the Human Resources Management team. Ms. Fager joined the Volvo Cars Executive Management Team on 1 October 2016.

Henrik Green. Mr. Green is Senior Vice President, Research & Development. Mr. Green started his professional career at Volvo Cars in 1996 and has since served in Sweden, USA and China, including heading Complete Powertrain Engineering and Product Strategy & Vehicle Line Management. Mr. Green joined the Volvo Cars Executive Management Team in October 2016.

Anders Gustafsson. Mr. Gustafsson is Senior Vice President, Americas having previously served as Senior Vice President for EMEA. In 2009, he joined Volvo Cars Sweden as Deputy President and Sales Director Nordic and became President for Volvo Cars Sweden in 2011. In March 2015, Mr. Gustafsson joined Volvo Cars as Senior Vice President Europe and became a member of the Executive Management Team.

Maria Hemberg. Ms. Hemberg is Senior Vice President, Group Legal and General Counsel. Ms. Hemberg serves as secretary of the Board. Ms. Hemberg has more than 25 years of experience practicing law, in particular corporate law, mergers and acquisitions (M&A) and contract law, as well as corporate governance. Immediately before joining Volvo Cars, Ms Hemberg served as in-house counsel at AB SKF for 12 years.

David Ibison. Mr. Ibison is Senior Vice President, Corporate Communications. Mr Ibison was formerly Vice President Corporate Communications and Global Head of Media Relations at Volvo Cars, having joined the company three and a half years ago in January 2014. Mr Ibison spent over 20 years as a foreign correspondent in various postings around the world, mainly for the Financial Times (FT). He was most recently the Nordic Bureau Chief for the FT between 2006 and 2010, based in Stockholm.

Thomas Ingenlath. Mr. Ingenlath is Chief Design Officer. Mr. Ingenlath has 20 years of experience within the automotive industry, having worked in lead design positions at , Volkswagen and Škoda. Before joining Volvo Cars, Mr. Ingenlath acted as Director of Design for Volkswagen Group at the Volkswagen Design Center in Potsdam.

Lex Kerssemakers. Mr. Kerssemakers is Senior Vice President, EMEA having previously served as Senior Vice President for the Americas. Mr. Kerssemakers joined Volvo Cars in 1996 and has served in a variety of marketing and business strategy positions. Mr. Kerssemakers has served under Swedish, U.S. and Chinese ownership, and helped align shareholder and consumer perspectives.

Atif Rafiq. Mr. Rafiq is Senior Vice President Group IT & Chief Digital Officer, and has a MBA in Finance & Marketing. Prior to joining Volvo Cars, his previous positions included serving as Chief Digital Officer, McDonald's Corporation, General Manager of Kindle Direct Purchasing, Amazon.com and Head of Global Product Marketing/Strategy at Yahoo.

Javier Varela. Mr. Varela is Senior Vice President, Manufacturing & Logistics. Mr. Varela has over 25 years of experience within the automotive industry in a variety roles, including manufacturing, industrial strategy and sales. Prior to joining Volvo Cars, he was the Executive Vice President for Toyota Citroën Automobile's operations in Kolin, . Mr. Varela joined the Volvo Cars Executive Management Team on 1 November 2016.

Paul Welander. Mr. Welander is Senior Vice President, Vehicle Line Management. Mr. Welander joined Volvo Cars in 1988, joining the Materials Laboratory. He worked there until 1994, when he became Test Manager. Mr. Welander went on to become Aftermarket Manager for Volvo Cars, North America, before returning to Sweden in 2001. Mr. Welander previously served as Vice President of Engineering of Volvo Cars.

Xiaolin Yuan. Mr. Yuan is Senior Vice President, Asia Pacific. As a former diplomat, Xiaolin Yuan started his professional career in BP plc. Mr. Yuan joined Geely as head of Mergers and Acquisitions and oversaw the purchase of Volvo Cars by Zhejiang Geely Holding in 2010. After four years as the head of Chairman's office and a member of Volvo Cars' Board of Directors, Mr. Yuan went back to China in 2014 and became Deputy Senior Vice President for Asia Pacific. On 1st March, 2017, he was appointed as Senior Vice President for the Asia Pacific Region and became a member of the Executive Management Team of Volvo Car Group.

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Board Practices

The Board continually monitors the Issuer's performance, evaluates the Issuer's strategic direction and business plan and other aspects such as business conduct in a responsible manner, sustainability and Code of Conduct adherence. The responsibilities of the Board are regulated by the Swedish Companies Act, the articles of association of the Issuer and the formal working procedures. The Board is expected to meet four to eight times per year. The Board conducts a yearly survey regarding its board work. Based on the result of the survey, the Board evaluates the performance and identifies possible areas of improvement.

Board Committees

The Audit Committee, the People & Compensation Committee and the Product Strategy & Investment Committee, each of whose members are appointed by the Board, handle certain tasks assigned to the committees on behalf of the Board.

Audit Committee

The Board is served by an Audit Committee, which is responsible for identifying and reporting relevant issues to the Board. The purpose of the Audit Committee is to monitor the integrity of the Group's financial reporting system, internal controls, operation procedure and risk-management framework; recommend to the Board the appointment, removal and remuneration for the auditors (subject to approval at the annual shareholders' meeting) in accordance with the Swedish Companies Act; monitor the independence of the auditors; and review the effectiveness of internal audit and compliance function.

Lone Fønss Schröder (Chairman), Winnie Fok and Li Donghui are members of the Audit Committee.

People & Compensation Committee

The purpose of the Compensation Committee is to prepare, decide and present to the Board matters related to remuneration, remuneration principles, performance and succession planning of the CEO and the executive management, as well as other related matters.

Michael Olsson (Chairman), Li Shufu, Thomas Johnstone and Peter Zhang are members of the People & Compensation Committee.

Product Strategy & Investment Committee

The purpose of the Product Strategy & Investment Committee is to oversee the Issuer's product strategy and the investments linked to it. The Committee works to ensure that the changes in society, people's views on mobility and cars as well as changes in the automotive market are reflected in the Issuer's strategic product plans and when choosing technology.

Thomas Johnstone (Chairman), Carl-Peter Forster, Betsy Atkins and Håkan Samuelsson are members of the Product Strategy & Investment Committee.

Nomination Committee

The major shareholders have elected a Nomination Committee to nominate members to the Board, set the appropriate remuneration principles for the Board and, on a yearly basis, propose the remuneration and other terms for the Board. Appointment or removal of a member of the Board shall be proposed by the Nomination Committee but subject to the approval of a shareholders' meeting. The Nomination Committee has adopted a framework for the nomination of members of the Board which stipulates that the composition of the Board shall be diverse in terms of gender, nationality, professional background and other competences to ensure that the Board has the appropriate balance of expert knowledge, which matches the scale and complexity of the Issuer, supports a sustainable development and meets the independence requirements of the Issuer.

Li Shufu and Mikael Olsson are currently members of the Nomination Committee.

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Compensation

The Group's executive compensation program is comprised of base salary, benefits, two short-term incentive programs and a long-term incentive program. Base salaries paid to the Group's executives are consistent with the scope of each executive's responsibilities such that base salaries reflect the fixed compensation necessary to recruit key leadership. Benefits paid to the Group's executives are benefits packages in line with those of other companies in the same sector and appropriate for the respective jurisdictions.

The Group has three global incentive programs: (i) Short Term Variable Pay ("STVP"); (ii) Volvo Bonus; and (iii) Long Term Variable Pay ("LTVP"). STVP and Volvo Bonus are both short-term incentive programs. While the STVP program only includes management, the Volvo Bonus program includes all employees. The LTVP is a program for the executive management team and senior executives. The STVP and Volvo Bonus programs are based on the company achieving certain EBIT targets. They have a defined ceiling in relation to base salary and any earned remuneration is paid in cash. The purpose of the LTVP is to attract, motivate and retain key competence within the company. Compensation awarded under the LTVP is based on the calculated market value of Volvo Cars over three years.

Principal Shareholder

The Issuer is a subsidiary of Geely Sweden Holdings AB, which is owned by Shanghai Geely Zhaoyuan International Investment Co., Ltd., with ultimate ownership held by Geely. Balances and transactions with Geely and its subsidiaries (not including the Issuer and its subsidiaries), are classified in the Consolidated Financial Statements as balances and transactions with related companies. The Guarantor is a direct wholly owned subsidiary of the Issuer. The share capital of the Issuer consists of 50,000,000 ordinary A-shares, all of which are owned by Geely Sweden Holdings AB, and 500,000 preference P- shares owned by institutional investors.

Related Party Transactions

In the course of the Group's ordinary business activities, it regularly enters into agreements with or renders services to related parties. In turn, such related parties may render services or deliver goods to the Group as part of their business. Purchase and supply agreements between subsidiaries and affiliated companies and with associated companies or shareholders of such associated companies are entered into on a regular basis within the ordinary course of business.

All transactions with affiliated companies are negotiated and conducted on a basis equivalent to what is achievable on an arm's-length basis, and that the terms of these transactions are comparable to those currently contracted with unrelated third-party suppliers, manufacturers and service providers.

Funding

In addition to any Notes issued from time to time under the Programme, the Group's funding principally comprises the China Development Bank Facility, the Term Credit Facility, the Revolving Credit Facility the Nordic Investment Bank Loan and certain outstanding bond issues.

The facilities made available under the China Development Bank Facility comprise:

 a €815,334,125 term loan facility ("Facility A"), the purpose of which is the prepayment of certain outstanding indebtedness;

 a €106,977,229 term loan facility ("Facility B"), the purpose of which is to refinance project costs associated with the future car emissions research and development project and related chassis development; and

 a US$800,000,000 term loan facility ("Facility C"), the purpose of which is the financing of certain XC90 project costs.

As of the date of this Offering Circular, Facility A, Facility B and Facility C have been fully drawn and have been partly repaid in accordance with the agreed amortisation profile.

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Volvo Car Corporation, as borrower, and the Issuer, as guarantor, entered into the Term Credit Facility with AB Svensk Exportkredit (publ), as lender, for a total amount of SEK 1,500,000,000. Borrowings under the Term Credit Facility may be used for general corporate purposes including refinancing of indebtedness previously incurred by Volvo Car Corporation. As of the date of this Offering Circular, the Group had drawn the total committed amount of SEK 1,500,000,000 under the facility.

In June 2017, the Issuer, as borrower, and Volvo Car Corporation, as guarantor, entered into the Revolving Credit Facility for a total amount of up to €1.3 billion. Borrowings under the Revolving Credit Facility may be used for general corporate purposes including refinancing of existing indebtedness. As of the date of this Offering Circular, the borrower has not drawn upon the facility.

Volvo Car Corporation, as borrower, and the Issuer, as guarantor, entered into a loan agreement (the "Nordic Investment Bank Loan") with the Nordic Investment Bank, as lender, providing the borrower with a term loan in the aggregate principal amount of SEK 1.0 billion. Borrowings under the Nordic Investment Bank Loan may be used by Volvo Car Corporation for R&D and engineering investments from 2016 to 2019 with respect to a modular based engine development program. The full amount of the Nordic Investment Bank Loan has been drawn.

In November 2017, Volvo Car Corporation, as borrower, and the Issuer, as guarantor, entered in to a loan facility with the European Investment Bank. It is a facility of up to €245million to support R&D activities in active safety, connectivity, development of battery electric vehicles and the next generation of petrol engines. The facility has not yet been drawn upon.

1 The Issuer has also issued €500 million aggregate principal amount of 3 /4% Senior Notes due 2021 and SEK 2.5 billion Senior Floating Rate Notes due 2022 and SEK 0.5 billion 2.5% Senior Notes due 2022 (together the "Existing Notes"). The Existing Notes are listed on the Official List of the Luxembourg Stock Exchange and admitted to trading on the Euro MTF market.

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TAXATION

The following is a general description, inter alia, of certain tax considerations relating to the Notes. It does not purport to be a complete analysis of all tax considerations relating to the Notes, whether in those countries or elsewhere. Prospective purchasers of Notes should consult their own tax advisers as to which countries' tax laws could be relevant to acquiring, holding and disposing of Notes and receiving payments of interest, principal and/or other amounts under the Notes and the consequences of such actions under the tax laws of those countries. This summary is based upon the law as in effect on the date of this Offering Circular and is subject to any change in law that may take effect after such date.

Kingdom of Sweden Taxation

The following overview outlines certain Swedish tax consequences of the acquisition, ownership and disposal of Notes. The overview is based on the laws of the Kingdom of Sweden as currently in effect and is intended to provide general information only. The overview is not exhaustive and does thus not address all potential aspects of Swedish taxation that may be relevant for a potential investor in the Notes and is neither intended to be nor should be construed as legal or tax advice. In particular, the overview does not address situations where Notes are held in an investment savings account (Sw. investeringssparkonto) that are subject to a specific tax regime or the rules regarding reporting obligations for, among others, payers of interest. Specific tax consequences may be applicable to certain categories of corporations, e.g. investment companies and life insurance companies, not described below. Investors should consult their professional tax advisors regarding the Swedish and foreign tax consequences (including the applicability and effect of double taxation treaties) of acquiring, owning and disposing of Notes in their particular circumstances.

Non-resident holders of Notes

As used herein, a non-resident holder means a holder of Notes who is (a) an individual who is not a resident of the Kingdom of Sweden for tax purposes and who has no connection to the Kingdom of Sweden other than his/her investment in the Notes, or (b) an entity not organised under the laws of the Kingdom of Sweden.

Payments of any principal amount or any amount that is considered to be interest for Swedish tax purposes to a non-resident holder of any Notes should not be subject to Swedish income tax provided that such holder does not carry on business activities through a permanent establishment in the Kingdom of Sweden to which the Notes are effectively connected. Under Swedish tax law, no withholding tax is imposed on payments of principal or interest to a non-resident holder of any Notes.

Under Swedish tax law, a capital gain on a sale of Notes by a non-resident holder will not be subject to Swedish income tax unless the non-resident holder of Notes carries on business activities in the Kingdom of Sweden through a permanent establishment to which the Notes are effectively connected.

Private individuals who are not resident in the Kingdom of Sweden for tax purposes may be liable to capital gains taxation in the Kingdom of Sweden upon disposal or redemption of certain financial instruments, depending on the classification of the particular financial instrument for Swedish income tax purposes, if they have been resident in the Kingdom of Sweden for tax purposes due to habitual abode in the Kingdom of Sweden or have stayed in the Kingdom of Sweden for six consecutive months at any time during the calendar year of disposal or redemption or the ten calendar years preceding the year of disposal or redemption. This liability may, however, be limited by tax treaties between the Kingdom of Sweden and other countries.

Resident holders of Notes

As used herein, a resident holder means a holder of Notes who is (a) an individual who is a resident in the Kingdom of Sweden for tax purposes or (b) an entity organised under the laws of the Kingdom of Sweden.

Generally, for Swedish corporations and private individuals (and estates of deceased individuals) that are resident holders of any Notes, all capital income (e.g. income that is considered to be interest for Swedish tax purposes and capital gains on Notes) will be taxable.

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If the Notes are registered with Euroclear Sweden AB or held by a Swedish nominee in accordance with the Swedish Financial Instruments Accounts Act (SFS 1998:1479), Swedish preliminary taxes are withheld by Euroclear Sweden AB or by the nominee on payments of amounts that are considered to be interest for Swedish tax purposes to a private individual (or an estate of a decease individual) that is a resident holder of any Notes.

Luxembourg Taxation

The following information is of a general nature only and is based on the laws presently in force in Luxembourg, though it is not intended to be, nor should it be construed to be, legal or tax advice. The information contained within this section is limited to Luxembourg withholding tax issues and prospective investors in the Notes should therefore consult their own professional advisors as to the effects of state, local or foreign laws, including Luxembourg tax law, to which they may be subject. Please be aware that the residence concept used under the respective headings below applies for Luxembourg income tax assessment purposes only. Any reference in the present section to a withholding tax or a tax of a similar nature, or to any other concepts, refers to Luxembourg tax law and/or concepts only.

Withholding Tax, Income Tax

Taxation of interest

There is no withholding tax for Luxembourg residents and non-residents on payments of interest in respect of the Notes, nor is any Luxembourg withholding tax payable on payments received upon repayment of the principal or upon an exchange of Notes except that in certain circumstances a withholding tax may be required to be paid on interest pursuant to the law of 23 December 2005, as amended (the "Relibi Law").

Under the Relibi Law, a withholding tax of 20 per cent. applies on savings income in the form of interest paid or secured by a Luxembourg paying agent to the benefit of beneficial owners, who are individuals, resident in Luxembourg. For an individual Holder of the Notes who is a resident of Luxembourg and who acts in the course of the management of his/her private wealth, the 20 per cent. withholding tax is a final levy.

Furthermore, a Luxembourg resident individual who acts in the course of the management is his/her private wealth and who is the beneficial owner of an interest payment made by a paying agent established outside Luxembourg in an EU Member State or in a member of the European Economic Area may also, in accordance with the Relibi Law, opt for a final 20 per cent. levy (the "20 per cent. Levy"). In such case, the 20 per cent. Levy is calculated on the same amounts as for the payments made by Luxembourg resident paying agents.

A Holder of Notes is subject to Luxembourg income tax in respect of the interest paid or accrued on the Notes only if such Holder (i) is or is deemed to be a resident of Luxembourg for tax purposes and the interest falls within the scope of the 20 per cent. Levy but the holder has not opted for the application of the 20 per cent. Levy, (ii) is or is deemed to be a resident of Luxembourg for tax purposes and the interest has not been received by him/her in the course of the management of his/her private wealth, or (iii) such income is attributable to an enterprise or part thereof, which is carried on through a fixed place of business, a permanent establishment or a permanent representative in Luxembourg.

Responsibility for the withholding of tax in application of the Relibi Law is assumed by the Luxembourg paying agent (within the meaning of the Relibi Law).

The Proposed Financial Transactions Tax ("FTT")

On 14 February 2013, the European Commission published a proposal (the "Commission's proposal") for a Directive for a common FTT in Belgium, Germany, , , Spain, France, , , , and (the "participating Member States"). However, Estonia has ceased to participate.

The Commission's proposal has very broad scope and could, if introduced, apply to certain dealings in Notes (including secondary' market transactions) in certain circumstances. The issuance and subscription of Notes should, however, be exempt.

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Under the Commission's proposal, FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain dealings in Notes where at least one party is a financial institution, and at least one party is established in a participating Member State. A financial institution may be, or be deemed to be, "established" in a participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a participating Member State or (b) where the financial instrument which is subject to the dealings is issued in a participating Member State.

However, the FTT proposal remains subject to negotiation between participating Member States. It may therefore be altered prior to any implementation, the timing of which, remains unclear. Additional E.U. Member States may decide to participate.

Prospective holders of Notes are advised to seek their own professional advice in relation to the FTT.

FATCA

Pursuant to certain provisions of the U.S. Internal Revenue Code of 1986, commonly known as FATCA, a "foreign financial institution" may be required to withhold on certain payments it makes ("foreign passthru payments") to persons that fail to meet certain certification, reporting, or related requirements. A number of jurisdictions (including Sweden) have entered into, or have agreed in substance to, intergovernmental agreements with the United States to implement FATCA ("IGAs"), which modify the way in which FATCA applies in their jurisdictions. Under the provisions of IGAs as currently in effect, a foreign financial institution in an IGA jurisdiction would generally not be required to withhold under FATCA or an IGA from payments that it makes. Certain aspects of the application of the FATCA provisions and IGAs to instruments such as the Notes, including whether withholding would ever be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes, are uncertain and may be subject to change. Even if withholding would be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes, such withholding would not apply prior to 1 January 2019 and Notes issued on or prior to the date that is six months after the date on which final regulations defining "foreign passthru payments" are filed with the U.S. Federal Register generally would be "grandfathered" for purposes of FATCA withholding unless materially modified after such date. However, if additional notes that are not distinguishable from previously issued Notes are issued after the expiration of the grandfathering period and are subject to withholding under FATCA, then withholding agents may treat all Notes, including the Notes offered prior to the expiration of the grandfathering period, as subject to withholding under FATCA. Holders should consult their own tax advisors regarding how these rules may apply to their investment in the Notes. In the event any withholding would be required pursuant to FATCA or an IGA with respect to payments on the Notes, no person will be required to pay additional amounts as a result of the withholding.

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SUBSCRIPTION AND SALE

Notes may be sold from time to time by the Issuer to any one or more of Citigroup Global Markets Limited, Deutsche Bank AG, London Branch, ING Bank N.V., London Branch and J.P. Morgan Securities plc (the "Dealers"). The arrangements under which Notes may from time to time be agreed to be sold by the Issuer to, and subscribed by, Dealers are set out in a Dealer Agreement dated 9 November 2017 (the "Dealer Agreement") and made between the Issuer, the Guarantor and the Dealers. If in the case of any Tranche of Notes the method of distribution is an agreement between the Issuer, the Guarantor and a single Dealer for that Tranche to be issued by the Issuer and subscribed by that Dealer, the method of distribution will be described in the relevant Pricing Supplement as "Non-Syndicated" and the name of that Dealer and any other interest of that Dealer which is material to the issue of that Tranche beyond the fact of the appointment of that Dealer will be set out in the relevant Pricing Supplement. If in the case of any Tranche of Notes the method of distribution is an agreement between the Issuer, the Guarantor and more than one Dealer for that Tranche to be issued by the Issuer and subscribed by those Dealers, the method of distribution will be described in the relevant Pricing Supplement as "Syndicated", the obligations of those Dealers to subscribe the relevant Notes will be joint and several and the names and addresses of those Dealers and any other interests of any of those Dealers which is material to the issue of that Tranche beyond the fact of the appointment of those Dealers (including whether any of those Dealers has also been appointed to act as Stabilising Manager in relation to that Tranche) will be set out in the relevant Pricing Supplement.

Any such agreement will, inter alia, make provision for the form and terms and conditions of the relevant Notes, the price at which such Notes will be subscribed by the Dealer(s) and the commissions or other agreed deductibles (if any) payable or allowable by the Issuer in respect of such subscription. The Dealer Agreement makes provision for the resignation or termination of appointment of existing Dealers and for the appointment of additional or other Dealers either generally in respect of the Programme or in relation to a particular Tranche of Notes.

United States of America:

Regulation S Category 2; TEFRA D or TEFRA C as specified in the relevant Pricing Supplement or neither if TEFRA is specified as not applicable in the relevant Pricing Supplement.

The Notes have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S.

The Bearer Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to a United States person, except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the United States Internal Revenue Code and regulations thereunder.

Each Dealer has agreed that, except as permitted by the Dealer Agreement, it will not offer, sell or deliver Notes, (i) as part of their distribution at any time or (ii) otherwise until 40 days after the completion of the distribution of the Notes comprising the relevant Tranche, as certified to the Fiscal Agent or the Issuer by such Dealer (or, in the case of a sale of a Tranche of Notes to or through more than one Dealer, by each of such Dealers as to the Notes of such Tranche purchased by or through it, in which case the Fiscal Agent or the Issuer shall notify each such Dealer when all such Dealers have so certified) within the United States or to, or for the account or benefit of, U.S. persons, and such Dealer will have sent to each dealer to which it sells Notes during the distribution compliance period relating thereto a confirmation or other notice setting forth the restrictions on offers and sales of the Notes within the United States or to, or for the account or benefit of, U.S. persons.

In addition, until 40 days after the commencement of the offering of Notes comprising any Tranche, any offer or sale of Notes within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act.

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United Kingdom

Each Dealer has represented, warranted and agreed, and each future Dealer appointed under the Programme will be required to represent, warrant and agree, that:

(a) No deposit-taking: in relation to any Notes having a maturity of less than one year:

(i) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business; and:

(ii) it has not offered or sold and will not offer or sell any Notes other than to persons:

(A) whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses; or

(B) who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses,

where the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA by the Issuer;

(b) Financial promotion: it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer or the Guarantor; and

(c) General compliance: it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom.

European Economic Area

From 1 January 2018, unless the Pricing Supplement in respect of any Notes specifies the "Prohibition of Sales to EEA Retail Investors" as "Not Applicable", each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Notes which are the subject of the offering contemplated by this Offering Circular as completed by the Pricing Supplement in relation thereto to any retail investor in the European Economic Area. For the purposes of this provision:

(i) the expression "retail investor" means a person who is one (or more) of the following:

(a) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or

(b) a customer within the meaning of Directive 2002/92/EC (as amended, the "Insurance Mediation Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or

(c) not a qualified investor as defined in the Prospectus Directive (as defined below); and

(ii) the expression "offer" includes the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes.

Prior to 1 January 2018, and from that date if, the Pricing Supplement in respect of any Notes specifies “Prohibition of Sales to EEA Retail Investors” as “Not Applicable”, in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that with effect from and including the date on which

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the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date") it has not made and will not make an offer of Notes which are the subject of the offering contemplated by the Offering Circular as completed by the pricing supplement in relation thereto to the public in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of such Notes to the public in that Relevant Member State:

(i) at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(ii) at any time to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer for any such offer; or

(iii) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Notes referred to in (i) to (iii) above shall require the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an "offer of Notes to the public" in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression "Prospectus Directive" means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State.

Kingdom of Sweden

Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that the Notes will only be offered to the public in Sweden provided that (A) the procedure and provisions under "Subscription and Sale – European Economic Area" in this Offering Circular (as such procedures and provisions have been implemented in Sweden) are complied with; (B) the amount of the Notes offered to each investor is equivalent to at least €100,000 or, if the Notes are denominated in a currency other than euro, the equivalent amount in such currency; (C) the minimum denomination of each Note is at least €100,000 or, if the Notes are denominated in a currency other than euro, the equivalent amount in such currency; (D) the Notes have a maturity of less than one year; (E) the offering is otherwise made in accordance with the provisions of the Prospectus Directive (as implemented in Sweden); or (F) a prospectus in relation to such Notes has been approved by Finansinspektionen ("FI") and published or, where a prospectus has been approved by the competent authority of another Member State of the European Economic Area which has implemented the Prospectus Directive, where such approval has been notified to FI, all in accordance with the provisions of Lag (1991:980) om handel med finansiella instrument.

Japan

The Notes have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, (the "FIEA")). Accordingly, each of the Dealers has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any Notes in Japan or to, or for the benefit of, a resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident in Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEA and other relevant laws and regulations of Japan.

General

Each Dealer has represented, warranted and agreed, and each future Dealer appointed under the Programme will be required to represent, warrant and agree that, it has complied and will comply with all applicable laws and regulations in each country or jurisdiction in or from which it purchases, offers, sells or delivers Notes or possesses, distributes or publishes this Offering Circular or any Pricing Supplement or any related offering material, in all cases at its own expense. Other persons into whose hands this

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Offering Circular or any Pricing Supplement comes are required by the Issuer, the Guarantor and the Dealers to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver Notes or possess, distribute or publish this Offering Circular or any Pricing Supplement or any related offering material, in all cases at their own expense.

The Dealer Agreement provides that the Dealers shall not be bound by any of the restrictions relating to any specific jurisdiction (set out above) to the extent that such restrictions shall, as a result of change(s) or change(s) in official interpretation, after the date hereof, of applicable laws and regulations, no longer be applicable but without prejudice to the obligations of the Dealers described in the paragraph headed "General" above.

Selling restrictions may be supplemented or modified with the agreement of the Issuer. Any such supplement or modification may be set out in the relevant Pricing Supplement (in the case of a supplement or modification relevant only to a particular Tranche of Notes) or in a supplement to this Offering Circular.

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GENERAL INFORMATION

Authorisation

1. The establishment of the Programme was authorised by a resolution of the Board of Directors of the Issuer passed on 27 October 2017. The giving of the Guarantee has been authorised by a resolution of the Board of Directors of the Guarantor dated 8 November 2017. Each of the Issuer and the Guarantor has obtained or will obtain from time to time all necessary consents, approvals and authorisations in connection with the issue and performance of the Notes and the giving of the guarantee relating to them.

Legal and Arbitration Proceedings

2. There are no governmental, legal or arbitration proceedings, (including any such proceedings which are pending or threatened, of which the Issuer or the Guarantor is aware), which may have, or have had during the 12 months prior to the date of this Offering Circular, a significant effect on the financial position or profitability of the Issuer, the Guarantor or the Group (together, the "Group").

Significant/Material Change

3. Since 31 December 2016 there has been no material adverse change in the prospects of the Issuer, the Guarantor or the Group. Since 30 September 2017 there has there been no significant change in the financial or trading position of the Issuer, the Guarantor or the Group.

Auditors

4. Deloitte AB, audited the financial statements for the years ended 31 December 2016 and 31 December 2015 for the Issuer. Deloitte AB of Rehnsgatan 11, 113 57 Stockholm, Sweden, is associated with FAR SRS, the professional institute for authorised public accountants, approved public accountants and other highly qualified professionals in the accountancy sector in Sweden.

Documents on Display

5. Copies of the following documents (together with English translations thereof) may be inspected during normal business hours at the offices of the Issuer at Avd 50090, 4050 31 Göteborg, Sweden, for 12 months from the date of this Offering Circular:

(a) the constitutive documents of the Issuer;

(b) the constitutive documents of the Guarantor;

(c) the most recently published consolidated audited annual financial statements of the Issuer and the most recently published interim financial statements (if any) of the Issuer (with a direct and accurate English translation thereof), in each case together with any audit or review reports prepared in connection therewith;

(d) the Agency Agreement;

(e) the Deed of Covenant;

(f) the Deed of Guarantee;

(g) the Programme Manual (which contains the forms of the Notes in global and definitive form); and

(h) the Issuer-ICSDs Agreement (which is entered into between the Issuer and Euroclear and/or Clearstream, Luxembourg with respect to the settlement in Euroclear and/or Clearstream, Luxembourg of Notes in New Global Note or NSS form).

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Clearing of the Notes

6. The Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg. The appropriate common code and the International Securities Identification Number in relation to the Notes of each Tranche will be specified in the relevant Pricing Supplement. The relevant Pricing Supplement shall specify any other clearing system as shall have accepted the relevant Notes for clearance together with any further appropriate information.

The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210 Brussels and the address of Clearstream, Luxembourg is Clearstream Banking, 42 Avenue JF Kennedy, L-1855 Luxembourg.

Issue Price and Yield

7. Notes may be issued at any price. The issue price of each Tranche of Notes to be issued under the Programme will be determined by the Issuer, the Guarantor and the relevant Dealer(s) at the time of issue in accordance with prevailing market conditions and the issue price of the relevant Notes or the method of determining the price and the process for its disclosure will be set out in the applicable Pricing Supplement. In the case of different Tranches of a Series of Notes, the issue price may include accrued interest in respect of the period from the interest commencement date of the relevant Tranche (which may be the issue date of the first Tranche of the Series or, if interest payment dates have already passed, the most recent interest payment date in respect of the Series) to the issue date of the relevant Tranche.

The yield of each Tranche of Notes set out in the applicable Pricing Supplement will be calculated as of the relevant issue date on an annual or semi-annual basis using the relevant issue price. It is not an indication of future yield.

Dealers transacting with the Issuer

8. Certain of the Dealers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform other services for, the Issuer and its affiliates in the ordinary course of business. In addition, in the ordinary course of their business activities, the Dealers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer, the Guarantor or their affiliates. Certain of the Dealers or their respective affiliates that have a lending relationship with the Issuer and/or the Guarantor routinely hedge their credit exposure to the Issuer and/or the Guarantor, as applicable, consistent with their customary risk management policies. Typically, such Dealers and their respective affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in securities, including potentially the Notes issued under the Programme. Any such short positions could adversely affect future trading prices of Notes issued under the Programme. The Dealers and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

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REGISTERED OFFICE OF THE ISSUER

Volvo Car AB (publ) Avd 50090, HB3S 4050 31 Göteborg Sweden

REGISTERED OFFICE OF THE GUARANTOR

Volvo Car Corporation Avd 50090, HB3S 4050 31 Göteborg Sweden

ARRANGER AND DEALER

Citigroup Global Markets Limited Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom

DEALERS

Deutsche Bank AG, London ING Bank N.V., London Branch J.P. Morgan Securities plc Branch 8-10 Moorgate 25 Bank Street Winchester House London EC2R 6DA Canary Wharf 1 Great Winchester Street United Kingdom London E14 5JP London EC2N 2DB United Kingdom United Kingdom

FISCAL AGENT, PAYING AGENT, TRANSFER AGENT AND REGISTRAR

HSBC Bank plc 8 Canada Square London E14 5HQ United Kingdom

LUXEMBOURG LISTING AGENT

Banque Internationale à Luxembourg S.A. 69, route d'Esch L-2953 Luxembourg Grand Duchy of Luxembourg

LEGAL ADVISERS

To the Issuer as to English law: To the Issuer as to Swedish law: Clifford Chance LLP Setterwalls Advokatbyrå AB 10 Upper Bank Street Sankt Eriksgatan 5 London E14 5JJ 411 05 Göteborg United Kingdom Sweden

To the Dealers as to English law: Allen & Overy LLP 1 Bishop's Square London E1 6AD United Kingdom

AUDITORS

Deloitte AB Rehnsgatan 11 113 57 Stockholm Sweden

70-40663394