Volvo 2004 Annual Report Download - page 11

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Renault Trucks plans to launch a new
version of its Renault Magnum truck
for long-haul transports at the begin-
ning of 2005. The launch of the new
version of Renault Magnum is the lat-
est example of the extensive product
renewal process under way at Renault
Trucks. The updated Renault
Magnum will have a
new driveline and
be equipped with
new engines and
gearboxes. Great
care has also been
taken to improve the driver’s environment.
9
AB VOLVO AND RENAULT
SA SIGNED SETTLEMENT
AGREEMENT
NEW VERSION OF
RENAULT MAGNUM
TO BE LAUNCHED
IN 2005
LB SMITH
DEALERSHIP
SOLD
During 2004, Volvo CE successfully
divested almost 90% of the US distribu-
tion acquired from LB Smith in 2003. The
different distribution areas have been
sold to strong, well capitalized and experi-
enced independent dealers. Volvo CE
purchased the assets associated with the
North American distribution in order to
ensure that the Volvo customers in North
America continued to receive the highest
possible standards of product support
and service.
AB Volvo and Renault SA signed a settle-
ment agreement regarding the disagree-
ment the companies have had since
2001 pertaining to Volvo's acquisition of
Renault V.I. and Mack. According to the
acquisition agreement in 2000, AB Volvo
received 100% of the shares in Renault's
truck subsidiaries, Renault V.I. and Mack
in exchange for 15% of the shares in AB
Volvo. Since then, AB Volvo and Renault
SA have had ongoing discussions regard-
ing the value of certain acquired assets
and liabilities of Renault V.I. and Mack.
In accordance with this settlement,
Renault SA transferred EUR 108 M to
AB Volvo in January, 2005.
AGREEMENT
IN PRINCIPLE
COVERING
ENGINE
MANUFACTURE
IN CHINA
Volvo signed an Engine Cooperation
Frame Agreement with the truck manu-
facturers China National Heavy Truck
Corporation (CNHTC), and First Auto-
motive Works (FAW) covering the estab-
lishment of a jointly owned engine plant in
China. The plant will manufacture com-
plete engines for Volvo’s products and for
CNHTC’s and FAW’s trucks and buses.
The three companies will form a joint
company for production of engines for
the Chinese market of which Volvo will
own 52% and CNHTC and FAW 24%
each. The agreement is still subject to
final negotiation and the relevant Chinese
authorities must also approve the agree-
ment.