Håkan Karlsson

President & CEO Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Units/MSEK 20000 2000 Shanghai Volume 2004 1998 100% of MASA Sales Prévost Units closed or divested 16000 Carrus 1999 1995 Prévost Irvine 2000 12000 1994 2001 Drögmöller Aabenraa South Africa 2001 1981 Xian Prevost and Nova 8000 50% consolidated 2001 Säffle 1990 1988 Steyr Roswell 2002 1979 Leyland Aabenraa 2004 4000 Heilbronn 2005

0 1970 1975 1980 1985 1990 1995 2000 2005

Nordic Chassis European Acquisition phase Consolidation Company growth & Complete phase

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Volvo Buses consolidation

Complete Bus Strategy Chassis platform One industrial system consolidation

Partner Complete vehicles Chassis Body C NASA International /Shells Builders/ O Converters M P L E Cost efficient modules & components T Marketing, development & E production of complete buses O VdB VBoF Asian hub F 12 6 F Price competitive chassis E Soft Offers R

External Bodybuilders

Aftermarket Volvo Powertrain System integration

Poland Borås/Gbg Säffle Acrivia Curitiba Prevost Nova Silver Sunwin

KOLA

GPS

CA/SAP

BM/FM

ST

GOS

CATIA V5

MyPlace

Not implemented Partly implemented Implemented

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

COACHES INTERCITY BUSES CITY BUSES

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Sales Operating Income MSEK MSEK

16589 16859 633 14035 470 12722 11978 185

-94

-397

2002 2003 2004 2005 2006 2002 2003 2004 2005 2006

No. of invoiced vehicles

10675 10360 9059 7817 8232

2002 2003 2004 2005 2006

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Bus World Market 2006 >12 tons

13,4 % 18,5 % Europe Total:24,313 Total: 8,938 Volvo: 3,255 Volvo: 1,655

6,5 % International Total: 65,590 7,8 % Volvo: 4,231 Total: 15,273 Volvo: 1,187

NA: excl. School buses NA + SA: Above 15 Tons

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

The bus business today

• Global market growth • Urbanisation creates opportunities • Improved profitability – still to weak • Consolidation ongoing • Increased focus on LCC • Environment focus • ”Asian attack”

Bus operator profitability Manufacturer profitability City

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

The number of people living in cities will increase

• Roughly half of the world’s population lives in rural areas (> 3 billion) • By the year 2015, 20% of world population will live in 225 cities each > 2 mill people • By the year 2015, 85% of world population will live in cities larger than 50.000 people

Source: United Nations

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Increased tourism travelling

• Tourism is projected to International Tourist Arrivals almost double until the year 2020 • Europe remains dominant but East shows the most dramatic growth • Air transport fastest growing mode of personal transport • Low cost flights are increasingly available

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Environment in focus

• Europe city bus segment Euro4 Euro5 EEV in 12 months • US/Canada city bus market buy 20% hybrid buses • CNG and biodiesel in many markets

We strive towards a leading position

• Fuel efficiency • CNG, biodiesel and DME • Hybrid development • BRT expertis

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Business outlook 2007

• North America and Europe have reach the peak • Region International continue to grow • City bus investments get priority • Environment focus nr 1 priority • Negative currency development • Raw material prices increase

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Business Region Europe

Highlights

• Order intake improving • Deliveries behind last year • Product introductions continues • Strong position in UK, Nordic, Spain • New product range well recieved

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

New product range

• New coaches /9900 • New city bus • New Euro 4/Euro 5/EEV diesel engines • New bio gas/natural gas engine • First with safety features - Front impact protection - Front underrun protection - Knee impact protection

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Business region Europe

In focus

• Customer satisfaction

• New product introduction

• Profitability program

• Alternative fuels/drivelines

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Business region North/South America

Highlights

• Good order intake • Good performance Nova, Prevost and South America • Mexico coach market drops significantly • BRT possibilities • New product range

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Bus Rapid Transit – a win-win solution

• Passengers • Government/PTA - Rapid - Environment - Frequent - Reduced congestion - Comfort/Security - Moderate investment

• Operators • Manufacturers - System productivity - Vehicle tailored to - Vehicle adapted to operations demands - International standards - Efficient vehicle use - Concept development

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Business region North/South America

In focus

• Profitable growth

• New product introduction

• Mexico capacity adjustment

•BRT sales

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Business region International

Highlights

• Strong market growth

• Good performance

• Complete bus

• Chinese competitors export

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Complete bus in India

• Strong brand (1 500 vehicles)

• New body plant 2007

• City bus expansion

• BRT discussions

Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007

Business region International

In focus

• Profitable growth • New plant in India • Evaluate export from China and India • Nissan Diesel synergies

Volvo Bus Corporation