AB Volvo, Gothenburg, Sweden, will invest slightly more than 1.7 billion SEK in Volvo Powertrain production facilities to increase the production capacity of heavy-duty diesel engines and heavy-duty gearboxes, by 20 percent and 50 per cent, respectively. Volvo Powertrain is the Volvo Group company responsible for the development of engines, gearboxes and driveshafts with research design, engineering and production facilities in Sweden and Hagerstown, Maryland.

An increased demand for Volvo Group products in emerging markets such as Eastern Europe and Asia has, in turn, seen an increased demand for heavy-duty diesel engines and heavy-duty gearboxes. The investment by AB Volvo will be utilized through 2009.

The company’s foundry and production plant in Skovde, Sweden, where production capacity for the engines will be increased by 20 percent, will account for a large part of the investment, slightly more than 1.1 billion SEK.  The Koping, Sweden, gearbox production facility will receive approximately SEK 400 million to increase its capacity by 50 percent.  Investments will also be made in a number of Volvo Powertrain plants in other parts of the world to ensure that the company’s industrial systems are adjusted to the higher production capacity.  (Recently, a $150 million investment was made in the Hagerstown, Maryland, research, design, and engineering facility.)

Volvo is the world’s largest producer of heavy-duty diesel engines in the 9 to 18 liter category.  They power the trucks, buses and construction equipment produced by the company and are major power sources for marine and industrial applications.