Jac Nasser, Ford

Photo: Ford

Jean-Martin Folz, PSA

Photo: PSA

Combined Ford Motor Company and PSA Peugeot Citroën teams will be assembled for each project at the start of the preliminary study phase this month. The projects will utilize both companies' existing key engineering facilities in Europe. PSA Peugeot Citroën will manage both the small aluminium and mid-sized HDI engine projects. Ford will oversee development of the large car engines and light commercial vehicle engines.

Following further development and manufacturing process implementation, the new engines related to this latest phase will begin delivery in 2003. Delivery of the first diesel engine resulting from an existing cooperative agreement between Ford Motor Company and PSA Peugeot Citroën will begin in 2001.

The new agreement also calls for joint teams to work on a number of diesel engine research projects, with the goal of lowering fuel consumption, reducing emissions, enhancing performance and weight through the utilization of new techologies and advanced materials.

"This joint cooperation will make optimum use of bothcompanies' technical expertise resulting in highly sophisticated technologies, earlier product availability, lower fuel consumption and more environmentally friendly diesel operation," said Jac Nasser. "Our consumers will benefit from an expanded range of outstanding diesel engines."

"Our initial project with Ford has been operating smoothly for one year," said Jean-Martin Folz. "In addition, the outlook for the European diesel engine market is favorable. These two factors have led us to extend our cooperation, which perfectly illustrates the PSA Peugeot Citroën strategy of implementing timely alliances with competitors. These alliances benefit both partners, while allowing them to retain their independence. Customers also benefit, thanks to the resulting cost savings."

In a first step Volvo will acquire 5% of the shares in Mitsubishi Motors through a special new issue for JPY 29 billion (SEK 2.3 billion). In turn, Mitsubishi Motors has announced its intention to successively acquire up to 5% of the share in Volvo on the market through the year 2002.

Not later than April 1, 2000, Mitsubishi Motors will form a separate division for its combined truck and bus operations. This division will be incorporated as a subsidiary of Mitsubishi Motors during the year 2001. In accordance with the signed letter of intent, Volvo intends to acquire 19.9% of the shares in this truck and bus company in conjunction with the incorporation.Volvo will appoint one or two non-management board members in this new subsidiary. Consequently, Mitsubishi Motors will appoint one or two non-management board members in Volvo´s truck and bus subsidiaries. Pursuant to the letter of intent, Volvo and Mitsubishi Motors will also form a strategic alliance involving market, product and industrial cooperation in the truck and bus segments. The agreement will strengthen and expand the already existing cooperation between the companies on trucks and enhance it to include also buses. An alliance agreement with regard to these cooperations is expected to be signed before the end of this year.

"Volvo has long held strong positions in trucks and buses in Europe, North America and South America. As a consequence of the agreement with Mitsubishi, we are now substantially strengthening our position in Asia and we are

Volvo´s CEO Leif Johansson

Photo: Volvo

Volvo delivered a total of 83,280 medium heavy and heavy trucks during 1998, mainly in Europe, North America and South America. In the same year, Volvo delivered a total of 10,200 heavy buses.