May 27, 2003

Volvo and Getrag team up to produce all-wheel-drive systems

Gothenburg, Sweden - Volvo Car Corporation has reached a preliminary agreement with the German transmission company Getrag to produce all-wheel-drive (AWD) system components at the Volvo Cars plant in Köping, Sweden. The plan is to invest more than 1 billion SEK (C$190 million) in a new, jointly owned company.

The new company, which has not yet been named, will begin operating during the second half of 2003. Getrag/Dana Holding Company, a joint venture of Getrag and Dana Corporation of the U.S., will own 60 per cent of the new company and Volvo Car Corporation the remaining 40 per cent.

The plan is to develop the Köping plant into a complete company within the field of AWD technology. The company will market its services as an independent supplier to the automotive industry, including companies within the Ford group.

"This technology has excellent potential and we expect to be able to expand," says Tobias Hagenmeyer, CEO of the Getrag Corporate Group of Cologne, Germany. "Four-wheel drive vehicles are increasing their share of the world auto market," adds Hagenmeyer.

The expanded capability will help Volvo Cars meet the growing demand for the all-wheel-drive feature in Canada, said Larry Futers, national marketing manager of Volvo Cars of Canada Ltd. "With steadily increasing volumes of vehicles like the XC70 and the S60 AWD, the new S60 R and V70 R performance cars, and the very successful XC90, we see all-wheel-drive representing up to half of our future volume," says Futers.

The deal is subject to the completion of final contracts and European Union regulatory approval.

Getrag is located in Untergruppenbach in Germany and was founded in 1935 by Hermann Hagenmeyer. Getrag has 16 plants around the world (Germany, Italy, France, UK, USA and India) and produces manual transmissions for cars, SUVs, vans, motorcycles and light trucks as well as automated manual transmissions. The company employs more than 9.000 workers.

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