Volvo Group - nine months ended September 30, 2007

Volvo Group - nine months ended September 30, 2007

·  Net sales increased by 13% to SEK 68.4 billion (60.5) in the third
quarter
Adjusted for changes in exchange rates and acquired and divested units,
net sales decreased by 1%
·  Operating income rose 54% to SEK 5,010 M (3,260)* in the third
quarter
·  Income for the period decreased by 20% to SEK 3,149 M (3,939)* in the
third quarter
·  Diluted earnings per share amounted to SEK 1.54 (1.94)* in the third
quarter
·  The Industrial Operation's operating cash flow was negative in an
amount of SEK 0.4 billion (neg. 0.4 billion) in the third quarter

Volvo Group       Third quarter               First nine months
                    2007       2006*        2007       2006*      Change
Net sales
Volvo Group       68,367      60,479     200,849     191,208          5%
Operating
income Volvo
Group              5,010       3,260      16,457      15,229          8%
  Operating
income
Industrial
operations         4,555       2,834      15,186      13,915          9%
  Operating
income
Customer
Finance              454         426       1,270       1,314        (3%)
Operating
margin Volvo
Group                7.3         5.4         8.2         8.0          3%
Income after
financial
items              4,571       3,144      15,948      15,073          6%
Income for
the period         3,149       3,939      10,935      12,617       (13%)
Diluted
earnings per
share, SEK          1.54        1.94        5.37        6.21       (14%)
Return on
shareholders'
equity, %                                   17.3        19.3  
* The third quarter of 2006 included a reversal of a valuation reserve
for deferred taxes and an adjustment of goodwill. As an effect,
operating income during the third quarter of 2006 was negatively
affected in an amount of SEK 1,712 M while income taxes decreased by SEK
2,048 M. The total effect on income for the period was positive in an
amount of SEK 336 M.

Aktiebolaget Volvo (publ) 556012-5790
Investor Relations, VHQ
SE-405 08 Göteborg, Sweden
Tel +46 31 66 00 00 Fax +46 31 53 72 96
www.volvo.com

Contacts Investor Relations:	
Christer Johansson         +46 31 66 13 34	
Patrik Stenberg	         +46 31 66 13 36
John Hartwell 	         +1 212 418 7432



CEO's comments - strong development in Europe and Asia 
During the third quarter, we experienced continued split development in our
markets. Demand remained strong for the Volvo Group's products and services in
most of our markets in Europe, Asia and South America, while demand continued to
be weak in North America.

A global Group with good geographic balance 
Sales in Asia increased through the contributions from the acquired companies
Nissan Diesel, Lingong and Ingersoll Rand's road development operations,
combined with increased demand in most markets. Asia has developed into our
second largest market. We currently have a significantly better balance in our
geographic presence than previously. More than 40 percent of our sales were
generated in markets outside Western Europe and North America, which have
traditionally been our home markets. Our operations are now based on a strong
global foundation, where growth in Eastern Europe and Asia are offsetting the
much weaker trend in North America.

   Third quarter sales were slightly more than SEK 68 billion, a 13% increase
compared with the preceding year, while operating profit of SEK 5,010 M was in
line with underlying earnings during the third quarter last year.

Investments in Europe 
Demand is currently very strong in Europe. In many areas of the Group,
production has reached peak capacity, resulting in a shortage of components,
substantial overtime for our employees and increased production costs. During
2008 and 2009 we will successively invest in increased production capacity and
we expect that our suppliers will do what is required to ensure their ability to
increase deliveries. Investments are being made primarily in Europe since this
industrial system supplies large portions of the world with products. In pace
with these investments being realized, we can improve productivity and meet the
increased demand. It is of strategic importance to be involved and build solid
relations with customers in the rapidly expanding markets in Eastern Europe and
Asia. Parallel with investments in our industrial systems, we are also rapidly
expanding our dealer and service networks to be able to provide efficient
service to the growing number of customers who are investing in our products.
With a dealer and service network in place, we will also benefit from a growing
aftermarket business.

   In North America, the truck market remained weak, while at the same time
demand for the Group's other products was subdued. Within the North American
truck operations, many people have been working hard to resolve the
interruptions we experienced in manufacturing following the production
changeovers earlier this year. We now see that production is flowing
increasingly more smoothly. In North America, a previous agreement between Mack
Trucks and the United Auto Workers (UAW) union expired on October 1. The
contract has been extended until October 31, with negotiations currently ongoing
with the UAW.

Continued increased profitability in Customer Finance but operating loss for
Buses 
Construction equipment has a strong product portfolio and is continuing to grow
at a rapid pace. Sales rose 37% during the quarter. Profitability did not quite
keep pace, but was negatively impacted by a labor conflict in South Korea and
cost increases resulting from a production rate exceeding peak capacity.

   Buses reported a loss during the third quarter. A reduction in deliveries
resulting from production disruptions related to the introduction of EU4 engines
and increased losses in Mexico adversely affected earnings. Buses has been
experiencing problems for some time and strong measures will be required to
reverse that trend and return profitability to satisfactory levels.

   Volvo Penta reported an operating margin of 9.6%, slightly lower than the
preceding year. Volvo Penta's marine engines continued to capture market share
in a market that has weakened slightly. The market for industrial engines is
strong, and Volvo Penta has advanced its positions with a renewed product range.

   Volvo Aero experienced a breakthrough with its lightweight technology for
aircraft engine components and increased operating margins thanks to continued
strong profitability for components and an improved aftermarket business.

   Combined with our expanded offering of services, accessories and spare parts,
customer financing operations at Volvo Financial Services are an important
component in our efforts to intensify cooperation with customers. Volvo
Financial Services continues to develop well, with favorable growth and
profitability.

Moving toward 2008, we are preparing ourselves for continued strong demand in
Europe, with a truck market that is projected to increase by 5-10%. In North
America, we expect that the demand for trucks will pick up gradually during
2008.

Leif Johansson
President and CEO

The character of the information is such that it shall be disclosed by AB Volvo
(publ) in accordance with the Swedish Securities and Clearing Operations Act
and/or the Swedish Financial Instruments Act. The information was disclosed to
the media on October 24, 2007 at 7.30 a.m. 

This report contains forward-looking statements that reflect management's
current views with respect to certain future events and potential financial
performance. Although the Company believes that the expectations reflected in
such forward looking statements are reasonable, no assurance can be given that
such expectations will prove to have been correct. Accordingly, results could
differ materially from those set out in the forward looking statements as a
result of, among other factors, (i) changes in economic, market and competitive
conditions, (ii) success of business and operating initiatives, (iii) changes in
the regulatory environment and other government actions, (iv) fluctuations in
exchange rates and (v) business risk management.  

This report does not imply that the company has undertaken to revise these
forward-looking statements, beyond what is required under the company's
registration contract with the Stockholm Stock Exchange if and when
circumstances arise that will lead to changes compared to the date when these
statements were provided.