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Scania continues to expand in Sweden

“In recent years we have gradually moved about a thousand skilled industrial jobs to Sweden. We believe in Sweden as a manufacturing country,” said Leif Östling, President and CEO of Scania, in his address to nearly 600 shareholders at today’s Annual General Meeting, outlining Scania’s operations in 2002.

Component manufacture requires heavy investments. This is why in recent years, Scania has worked to concentrate its European production of engines, axles, gearboxes and cabs at one site per component. This production is now gathered in Sweden.

“Vehicle assembly, in which the logistics cost is high, should be located as close to the customer as possible. This is why, at the same time as we concentrated component manufacture,  the expansion of our assembly operations has occurred in Zwolle, the Netherlands and in Angers, France,” Mr Östling explained.

He also noted that with first quarter 2003 operating income of SEK 1.3 billion and an operating margin of nearly 11 percent, Scania is maintaining its position as best in its class.

As for the market outlook during the remainder of 2003, Mr Östling emphasised that due to macroeconomic developments, there is a clear risk that demand for trucks and buses will be subdued.

Mr Östling also summarised the current situation and future prospects of Scania’s entire operations, from product development and production to vehicle and service-related sales and customer finance.

He also described the core values – putting the customer first, respect for the individual and quality in products and services – which permeate Scania’s production concept.

“In the Scania Production System – SPS – the focus is on people, not machines or computers,” he explained.

Mr Östling concluded his address by thanking Dr Ferdinand Piëch, who is leaving the Board of Scania at his own request, not only for his years as Chairman and a member of the Board, but also for the fine way in which he contributed to the development of the company when Volvo’s plans to acquire Scania were stopped by the EU’s competition authority in March 2000 and an ownership vacuum then arose.

Leif Östling’s entire speech has been posted on Scania’s web site and can be reached via the following link: www.scania.com/ir/presentations

For further information, please contact Hans-Åke Danielsson, telephone number +46 8 553 856 62.