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Volvo Cars to expand European diesel engine production

16 December 2004

Volvo Cars Engine in Skövde, Sweden, is investing EUR 70 million to start production of a high technology 4-cylinder diesel engine in early 2006. This further establishes Volvo Cars Engine as a diesel engine manufacturing centre within Ford Motor Company.

As a part of the Ford Motor Company and the PSA Peugeot Citroen European cooperative agreement to engineer and produce high technology diesel engines, Volvo Cars Engine in Skövde will launch production of a 4-cylinder 2.0 litre diesel engine in early 2006.

"This is promising for our operations in Skövde and clearly shows that Volvo Cars Engine is a competitive manufacturer in Europe", said site manager Thomas Andersson.

Planned production volume of the 2 litre engine will be up to 190,000 units on a yearly basis and is expected to be in full swing during the spring of 2007.

The production of the 2 litre engine is replacing Volvo's 6-cylinder petrol engine that will be produced in Ford Motor Company's engine plant in Bridgend, United Kingdom.

The 2 litre engine is offered already for the new Volvo S40 and the Volvo V50 sports wagon.

At the moment around 7,500 factory square meters are redesigned to fit the new diesel engine production line. The number of employees will not be affected by the 2 litre diesel engine production launch in 2006. Volvo Cars Engine overall production will remain at the present volume of 400,000 units per year.

Volvo Cars Engine hosts a total of four manufacturing units: The engine factory in Skövde, Sweden, and a component manufacturing unit in Floby, Sweden together with two dressing plants in Torslanda, Sweden and Ghent, Belgium. Volvo Cars Engine has a total of 2,650 employees, where Skövde stands for 1,350. The Skövde plant opened in 1991.

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