**As      filed with the Securities and Exchange Commission on June 21, 2007**

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

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**FORM        20-F**

| o | REGISTRATION                STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE                ACT OF 1934 |
|---|--------------------------------------------------------------------------------------------------------------------------------|

| x      | ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   | for                the fiscal year ended December 31,                2006                                                         |

| o | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

| o | SHELL                COMPANY PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|---|------------------------------------------------------------------------------------------------------------------------------------|

**Commission      file number 0-12828**

**AKTIEBOLAGET      VOLVO (publ)**

*(Exact      name of Registrant as specified in its charter)*

**VOLVO      CORPORATION**

*(Translation      of Registrant's name into English)*

**Kingdom      of Sweden**

*(Jurisdiction      of incorporation or organization)*

**S-405      08**

**Göteborg,      Sweden**

*(Address      of principal executive offices)*

**None**

| **Title                of class**                                                                                                                                                                                       | **Name                of each exchange on which registered** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|
| **Class                B, common stock****quota                value SEK 6,****American                Depositary Shares****each                representing one Share****of                class B common stock** | **NASDAQ**                                                   |

**None**

| **A                shares** | **131,374,699** |
|-----------------------------|-----------------|
| **B                shares** | **273,088,810** |

| Yes                x | No                o |
|----------------------|---------------------|

| Yes                  o | No                  x |
|------------------------|-----------------------|

----

| **Yes ****x** | **No                  o** | **Not                  Applicable o** |
|--------------------|---------------------------|---------------------------------------|

| Large                  Accelerated Filer x | Accelerated                  Filer o | Non-Accelerated                  Filer o |
|--------------------------------------------|--------------------------------------|------------------------------------------|

** **

| **Item                  17 o** | **Item                  18 x** |
|--------------------------------|--------------------------------|

| Yes                      o | No                      x |
|----------------------------|---------------------------|

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| INTRODUCTION                  AND USE OF CERTAIN TERMS                                                                  | 3  |
|-------------------------------------------------------------------------------------------------------------------------|----|
| Certain                  Forward-Looking Statements                                                                     | 4  |
| PART                  I                                                                                                 | 5  |
| ITEM                  1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND                  ADVISERS                         | 5  |
| ITEM                  2. OFFER STATISTICS AND EXPECTED TIMETABLE                                                        | 5  |
| ITEM                  3. KEY INFORMATION                                                                                | 5  |
| 3.A                  Selected Financial Data                                                                            | 5  |
| 3.B                  Capitalization and Indebtedness                                                                    | 8  |
| 3.C                  Reasons for the offer and use of proceeds                                                          | 8  |
| 3.D                  Risk factors                                                                                       | 8  |
| ITEM                  4. INFORMATION ON THE COMPANY                                                                     | 13 |
| 4.A                  History and Development of Company                                                                 | 13 |
| 4.B                  Business Overview                                                                                  | 19 |
| 4.C                  Organizational Structure                                                                           | 38 |
| 4.D                  Property, Plants and Equipment                                                                     | 39 |
| ITEM                  4A. UNRESOLVED STAFF COMMENTS                                                                     | 40 |
| ITEM                  5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                                   | 41 |
| 5.A                  Operating Results                                                                                  | 41 |
| 5.B                  Liquidity and Capital Resources                                                                    | 50 |
| 5.C                  Research and Development, Patents and Licenses                                                     | 55 |
| 5.D                  Trend Information                                                                                  | 55 |
| 5.E                  Off-Balance Sheet Arrangements                                                                     | 55 |
| 5.F                  Tabular Disclosure of Contractual Obligations                                                      | 55 |
| ITEM                  6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                                     | 57 |
| 6.A                  Directors and Senior Management                                                                    | 57 |
| 6.B                  Compensation                                                                                       | 63 |
| 6.C                  Board Practices                                                                                    | 64 |
| 6.D                  Employees                                                                                          | 64 |
| 6.E                  Share Ownership                                                                                    | 65 |
| ITEM                  7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                              | 66 |
| 7.A                  Major Shareholders                                                                                 | 66 |
| 7.B                  Related Party Transactions                                                                         | 67 |
| 7.C                  Interests of Experts and Counsel                                                                   | 68 |
| ITEM                  8. FINANCIAL INFORMATION                                                                          | 69 |
| 8.A                  Consolidated Statements and Other Financial Information                                            | 69 |
| 8.B                  Significant Changes                                                                                | 70 |
| ITEM                  9. THE OFFER AND LISTINGS                                                                         | 71 |
| 9.A                  Offer and Listing Details                                                                          | 71 |
| 9.B                  Plan of Distribution                                                                               | 72 |
| 9.C Markets                                                                                                        | 72 |
| 9.D                  Selling Shareholders                                                                               | 72 |
| 9.E                  Dilution                                                                                           | 72 |
| 9.F                  Expenses of the Issue                                                                              | 72 |
| ITEM                  10. ADDITIONAL INFORMATION                                                                        | 72 |
| 10.A                  Share capital                                                                                     | 72 |
| 10.B                  Memorandum and articles of association                                                            | 73 |
| 10.C                  Material contracts                                                                                | 75 |
| 10.D                  Exchange controls                                                                                 | 75 |
| 10.E                  Taxation                                                                                          | 75 |
| 10.F                  Dividends and paying agents                                                                       | 78 |
| 10.G                  Statement by experts                                                                              | 79 |
| 10.H                  Documents on display                                                                              | 79 |
| 10.I Subsidiary                  Information                                                                       | 79 |
| ITEM                  11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT                  MARKET RISK                   | 79 |
| ITEM                  12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY                  SECURITIES                       | 79 |
| PART                  II                                                                                                | 80 |
| ITEM                  13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                               | 80 |
| ITEM                  14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY                  HOLDERS AND USE OF PROCEEDS | 80 |
| ITEM                  15. CONTROLS AND PROCEDURES                                                                       | 80 |
| ITEM                  16.A AUDIT COMMITTEE FINANCIAL EXPERT                                                             | 81 |
| ITEM                  16.B CODE OF ETHICS                                                                               | 81 |
| ITEM                  16.C PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                       | 82 |
| ITEM                  16.D EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT                  COMMITTEES                   | 82 |
| ITEM                  16.E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND                  AFFILIATED PURCHASERS      | 83 |

----

| PART                  III                      | 84 |
|------------------------------------------------|----|
| ITEM                  17. FINANCIAL STATEMENTS | 84 |
| ITEM                  18. FINANCIAL STATEMENTS | 85 |
| ITEM                  19. EXHIBITS             | 86 |
| SIGNATURES                                     | 87 |

----

**INTRODUCTION      AND USE OF CERTAIN TERMS**

----

**Certain      Forward-Looking Statements**

----

**PART I**

**ITEM 1.      IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND      ADVISERS**

**ITEM      2. OFFER STATISTICS AND EXPECTED      TIMETABLE**

**ITEM      3. KEY INFORMATION**

**3.A** **Selected      Financial Data**

| **AMOUNTS                IN ACCORDANCE WITH IFRS FROM 2004****1** |
|-------------------------------------------------------------------|
| (In                millions, except per share amounts)            |
|                                                              |   | 20043 |   | 2005 |   | 2006 |   | 20064 |   |
|                                                              |   | SEK |   | SEK |   | SEK |   | USD |   |
| Net                sales                                          |   |   | 211,076 |   |   | 240,559 |   |   | 258,835 |   |   | 37,873 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                sales from continuing operations               |   |   | 211,076 |   |   | 240,559 |   |   | 258,835 |   |   | 37,873 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                income                                   |   |   | 14,679 |   |   | 18,153 |   |   | 20,399 |   |   | 2,985 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                         |   |   | 9,907 |   |   | 13,108 |   |   | 16,318 |   |   | 2,388 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income per share5                              |   |   | 23.58 |   |   | 32.22 |   |   | 40,20 |   |   | 5.88 |   |
| Diluted                income per share                           |   |   | 23.55 |   |   | 32.16 |   |   | 40,17 |   |   | 5.88 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                dividends per share 6                         |   |   | 12.50 |   |   | 16.75 |   |   | 25.00 |   |   | 3.66 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets                                       |   |   | 223,968 |   |   | 257,207 |   |   | 258,427 |   |   | 37,814 |   |
| Shareholders’                equity                         |   |   | 70,155 |   |   | 78,760 |   |   | 87,188 |   |   | 12,758 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share                capital                                      |   |   | 2,649 |   |   | 2,554 |   |   | 2,554 |   |   | 374 |   |
| Weighted                average number of shares. (in thousands)7 |   |   | 418,528 |   |   | 405,242 |   |   | 404,663 |   |   | 404,663 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| **AMOUNTS                  IN ACCORDANCE WITH US GAAP**  |
|----------------------------------------------------------|
|                                                     |   | 2004 |   | 2005 |   | 2006 |   | 20064 |   |
|                                                     |   | SEK |   | SEK |   | SEK |   | USD |   |
| Operating                  income (loss)                 |   |   | 19,010 |   |   | 16,051 |   |   | 20,791 |   |   | 3,042 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss)                       |   |   | 14,416 |   |   | 11,398 |   |   | 14,309 |   |   | 2,094 |   |
| Basic                  net income  per share 5 |   |   | 34.44 |   |   | 28.12 |   |   | 35.36 |   |   | 5.17 |   |
| Diluted                  net income per share 5     |   |   | 34.40 |   |   | 28.08 |   |   | 35.35 |   |   | 5,17 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders’                  equity              |   |   | 73,079 |   |   | 79,478 |   |   | 84,858 |   |   | 12,417 |   |

|                                                                  |   |   | 20022   |   |   | 2003    |   |
|-----------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
|                                                                  |   |   | SEK     |   |   | SEK     |   |
| Net                  sales                                            |   |   | 186,198 |   |   | 183,291 |   |
| Operating                  income (loss)                              |   |   | (5,171  | )      |   | 5,275   |   |
|                                                                  |   |   |    |   |   |    |   |
| Net                  income (loss)                                    |   |   | (6,265  | )      |   | 3,979   |   |
|                                                                  |   |   |    |   |   |    |   |
| Income                  (loss) from continuing operations             |   |   | (6,265  | )      |   | 3,979   |   |
|                                                                  |   |   |    |   |   |    |   |
| Basic                  net income (loss) per share 8        |   |   | (14.94  | )      |   | 9.49    |   |
| Diluted                  net income (loss) per share 8           |   |   | (14.94  | )      |   | 9.48    |   |
| Income                  per share from discontinued operations 8      |   |   | -       |   |   | -       |   |
| Income                  (loss) per share from continuing operations 8 |   |   | (14.94  | )      |   | 9.49    |   |
|                                                                  |   |   |    |   |   |    |   |
| Total                  assets                                         |   |   | 232,126 |   |   | 232,180 |   |
|                                                                  |   |   |    |   |   |    |   |
| Shareholders’                  equity                           |   |   | 71,182  |   |   | 74,790  |   |
| Share                  capital                                        |   |   | 2,649   |   |   | 2,649   |   |
| Weighted                  average number of shares. (in thousands)7   |   |   | 419,445 |   |   | 419,445 |   |
| Cash                  dividends per share 6                           |   |   | 8.00    |   |   | 8.00    |   |

| 1      | The                  consolidated financial statements of Volvo are prepared in accordance                  with                  IFRS, during 2004, 2005 and 2006. IFRS differs in certain respects                  from                  generally accepted accounting principles in the United States (US                  GAAP).                  See Notes 3 and 38 to the consolidated financial                  statements.                                                                                                                                                                                                                                                                                                                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2      | Net                  income (loss) in 2002 in accordance with US GAAP included value                  adjustments amounting to SEK 9,683 million pertaining to Volvo’s                  shareholdings in Scania AB, Deutz AB and Henlys Group plc. If a                  security’s                  quoted market price has been below the carrying value for an extended                  period of time, US GAAP includes a presumption that the decline                  is other                  than temporary. Under such circumstances, US GAAP requires that                  a value                  adjustment must be recorded in net income with a corresponding                  credit to                  Other comprehensive income. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3      | In                  2004, operating income from continuing operations under IFRS included                  a                  write-down of shares in Henlys Group plc amounting to SEK 95 million                  and a                  positive revaluation of shares in Scania AB amounting to SEK 915                  million.                  In accordance with US GAAP earlier recorded value adjustments have                  been                  reversed amounting to net, positive, SEK 5.157 million.                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4      | Translated                  for convenience at US$ 1 = SEK 6.8342, the Noon Buying Rate on                  December                  30, 2006. Such translations should not be construed as representations                  that the SEK amounts represent, or have been or could be converted                  into,                  United States dollars at that or any other rate.                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 5      | Net                  income (loss) per share is calculated as net income divided by                  the                  weighted average number of shares outstanding during the year.                  The                  weighted average number of shares outstanding during 2006 was                  404,663,051.                                                                                                                                                                                                                                                                                                                                                                                                                                          |

----

| 6  | Cash                  dividends are those declared out of the unrestricted equity of                  the parent                  company as recommended by the Board of Directors and approved by                  the                  Annual General Meeting of Shareholders held in the spring of the                  following                  year. At the                  Annual General Meeting of AB Volvo held on April 4 2007, the Board's                  proposal to pay a dividend to the shareholders of SEK 25.00 per                  share was                  approved.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 7       | The                  weighted average number of shares outstanding during 2002 and 2003                  was                  419,444,842.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | On                  June 17, 2004, the Board of AB Volvo decided to acquire, through                  purchase                  on the Stockholm Stock Exchange, a maximum of 22,076,045 Series                  A and/or B                  shares, not exceeding a total purchase amount of SEK 4,300 million.                  By                  year-end 2004, a total of 9,315,000 Volvo A and B shares were repurchased                  equivalent to SEK 2,532 million. The total number of shares held                  by Volvo                  as treasury stock at year-end was 31,391,043 or 7.1% of the registered                  shares whereof Series A shares 7,075,246 and Series B shares 24,315,797.                  The weighted average number of shares outstanding during 2004 was                  418,528,773. During 2005, a total of 5,730,000 Volvo shares were                  repurchased. Total share capital by year end 2004 amounted to SEK                  2,649                  million and was based on 441,520,885 registered shares. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | During                  2005 the share capital was reduced by SEK 95 million through cancellation                  without repayment of 3,084,619 Series A shares and 12,752,222 Series                  B                  shares. After reduction the share capital amounts to SEK 2,554                  million and                  is based on 425,684,044 registered shares. The total number of                  registered                  shares by year end 2005 amounted to 425,684,044. Volvo held 5%                  of the                  registered shares at year end 2005, 21,220,535 shares whereof Series                  A                  shares 4,145,627 and Series B shares 17,074,908. The total number                  of                  outstanding Volvo shares by year end 2005 amounted to 404,463,509                  whereof                  Series A shares 131,374,699 and Series B shares 273,088,810. The                  average                  number of outstanding shares was 405,242,037 in 2005.                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | The                  total number of registered shares by year end 2006 amounted to                  425,684,044. Volvo held 4.9% of the registered shares at year end                  2006,                  20,885,454 shares whereof Series A shares 4,145,627 and Series                  B shares                  16,739,827. The total number of outstanding Volvo shares by year                  end 2006                  amounted to 404,798,590 whereof Series A shares 131,374,699 and                  Series B                  shares 273,423,891. The average number of outstanding shares was                  404,663,051 in 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 8  | U.S.                  GAAP basic and diluted net income (loss) per share is calculated                  as net                  income (loss) determined in accordance with U.S. GAAP divided by                  the                  weighted average number of shares outstanding during the year.                  Diluting                  securities during the period have impacted the average numbers                  of shares                  with 11 thousand, 117 thousand, 494 thousand, 625 thousand and                  315                  thousand for the respective year 2002, 2003, 2004, 2005 and                  2006.                                                                                                                                                                                                                                                                                                                                                                                                                                   |

**Exchange      Rates**

----

| Year                         |   | Average1 |    | High   |   | Low     |   |
|------------------------------|--------|----------|---------|--------|--------|---------|--------|
| 2001                         |   |     | 10.4328 |   |   | 11.0270 |   |   | 9.3250 |   |
| 2002                         |   |     | 9.6571  |   |   | 10.7290 |   |   | 8.6950 |   |
| 2003                         |   |     | 8.0351  |   |   | 8.7920  |   |   | 7.1950 |   |
| 2004                         |   |     | 7.3320  |   |   | 7.7725  |   |   | 6.5939 |   |
| 2005                         |   |     | 7.5170  |   |   | 8.2434  |   |   | 6.7312 |   |
| 2006                         |   |     | 7.3098  |   |   | 7.9656  |   |   | 6.7674 |   |
|                         |   |     |    |   |   |    |   |   |   |   |
| December                2006 |   |     | -       |   |   | 6.9204  |   |   | 6.7674 |   |
| January                2007  |   |     | -       |   |   | 7.0829  |   |   | 6.7818 |   |
| February                2007 |   |     | -       |   |   | 7.0839  |   |   | 6.9436 |   |
| March                2007    |   |     | -       |   |   | 7.1060  |   |   | 6.9622 |   |
| April                2007    |   |     | -       |   |   | 7.0057  |   |   | 6.6975 |   |
| May                2007      |   |     | -       |   |   | 6.9376  |   |   | 6.7093 |   |

| 1 | The                average of the Noon Buying Rates on the last day of each month during                the                year. |
|---|----------------------------------------------------------------------------------------------------------------------------------|

**Credit      ratings**

**Inflation**

**3.B.    ****Capitalization      and Indebtedness**

**3.C.    ****Reasons      for the offer and use of proceeds.**

**3.D.    ****Risk      factors**** **

**All      business operations involve risk - managed risk-taking is a condition of      maintaining a sustained favorable profitability. **

----

**EXTERNAL-RELATED        RISK**

**The        commercial vehicles industry is cyclical. **

**Competition        is intense among manufacturers of commercial vehicles and engines.**

**Prices        for commercial vehicles may change. **

**The        commercial vehicles industry is subject to extensive government regulation.        **

----

**FINANCIAL        RISK**

**Currency-related        risk. **

**Interest-related        risk. **

----

**Market        risk from investments in shares or similar instruments. **

**Credit-related        risk. **

**Liquidity        risk. **

**OPERATIONAL        RISK**

**The        Volvo Group’s profitability depends on successful new products.**

**The        Volvo Group relies on suppliers. **

**Volvo        Group is reliant on the proper protection and maintenance of its intangible        assets. **

----

**Complaints        and legal actions by customers, employees, government agencies and other        third        parties. **

**Risk        related to human capital. **

**Volvo’s        Financial Services business area conducts business under highly competitive        conditions in an industry with inherent risks.**

**Other        factors. **

----

**ITEM        4. INFORMATION ON THE COMPANY**

**4.A.    ****History        and Development of Company**

**Significant        events in 2006**
**        and 2007**

**AB        Volvo acquired Nissan Diesel. **

----

**Agreement        between Renault Trucks and the GAZ Grou**

**Volvo        plans bus body cooperation in India**

**Volvo        Construction Equipment invests in China**

**Strategic        decision on closure of Volvo Aero's operations in Bromma**

**Annual        General Meeting of AB Volvo**

----

**Volvo        Board decided on new financial targets**

**Recognition        of deferred tax asset yields positive earnings effect**

**Volvo        Group premiered hybrid technology for heavy vehicles**

**Volvo        Trucks launched new models for the North American market **

**Volvo        Trucks broadens its business with new, cleaner trucks for        distribution**

----

**Launch        of new versions of Renault Midlum and Renault Premium        Distribution**

**World        premiere for new Volvo 7700 city bus**

**Mack        Trucks launches new truck in construction segment**

**New        wheel loader launched**

**Dongfeng        Motor Group, Nissan Motor and AB Volvo deepen discussions on possible future        cooperation**

**Renault        Trucks in agreement with Nissan Motor regarding distribution of light        trucks**

----

**Renault        Trucks launches new version of lightweight truck**

**Volvo        finalizes acquisition of Ingersoll Rand’s road development equipment        division**

**Decisions        on several major investments**

**Annual        General Meeting of AB Volvo**

----

**Capital        Expenditures**

|                                                      |   | 2004                                  |       | 2005   |   | 2006       |   |
|-----------------------------------------------------------|--------|---------------------------------------|------------|--------|--------|------------|--------|
|                                                      |   | (In                  millions of SEK) |       |
| **Capital                  expenditures**                 |   |                                  |       |   |   |       |   |
| Trucks                                                    |   |                                  | 5,030      |   |   | 7,190      |   |   | 6,260 |   |
| Buses                                                     |   |                                  | 176        |   |   | 250        |   |   | 263 |   |
| Construction                  Equipment                   |   |                                  | 1,158      |   |   | 906        |   |   | 1,580 |   |
| Volvo                  Penta                              |   |                                  | 297        |   |   | 243        |   |   | 248 |   |
| Volvo                  Aero                               |   |                                  | 801        |   |   | 904        |   |   | 843 |   |
| Financial                  Services                       |   |                                  | 4,784      |   |   | 386        |   |   | 999 |   |
| Other                  and corporate capital expenditures |   |                                  | 237        |   |   | 4,972      |   |   | 3.841 |   |
| **Group                  total**                          |   |                                  | **12,483** |   |   | **14,851** |   |   | **14,034** |   |

|                                       |   | 2004                                  |       | 2005   |   | 2006       |   |
|--------------------------------------------|--------|---------------------------------------|------------|--------|--------|------------|--------|
|                                       |   | (In                  millions of SEK) |       |
| Sweden                                     |   |                                  | 3,690      |   |   | 5,935      |   |   | 3,970 |   |
| Europe                  (excluding Sweden) |   |                                  | 6,305      |   |   | 5,770      |   |   | 7,395 |   |
| North                  America             |   |                                  | 1,835      |   |   | 2,451      |   |   | 1,851 |   |
| Other                  countries           |   |                                  | 653        |   |   | 695        |   |   | 818 |   |
| **Group                  total**           |   |                                  | **12,483** |   |   | **14,851** |   |   | **14,034** |   |

----

**4.B.    ****Business        Overview**

**General**

**Challenging        assignment **

**New        and more efficient structure **

**Products        **

**Group-wide        production **

**Aggressive        strategy for growth **

----

**Major        potential in Asia **

**Broader        offering to customers **

**Market        overview**

**Global        economic trend**

**Transport        requirements**

**Commodity        prices**

----

**An        industry in flux**

**Growth        markets **

**Sales        by Geographical Areas **

|                            |   | 2004                                  |        | 2005   |   | 2006        |   |
|---------------------------------|--------|---------------------------------------|-------------|--------|--------|-------------|--------|
| Market                  area:   |   | (in                  millions of SEK) |        |
| Western                  Europe |   |                                  | 108,015     |   |   | 112,037     |   |   | 121,921 |   |
| Eastern                  Europe |   |                                  | 11,062      |   |   | 11,986      |   |   | 16,421 |   |
| North                  America  |   |                                  | 54,769      |   |   | 69,743      |   |   | 74,928 |   |
| South                  America  |   |                                  | 7,338       |   |   | 12,479      |   |   | 13,159 |   |
| Asia                            |   |                                  | 20,789      |   |   | 22,699      |   |   | 19,655 |   |
| Other                  markets  |   |                                  | 9,103       |   |   | 11,615      |   |   | 12,751 |   |
| **Total**                       |   |                                  | **211,076** |   |   | **240,559** |   |   | **258,835** |   |

**Strategy**

*Developing        and broadening cooperation with customers*

----

*Building        strong relations with key customers*

*Profitable        growth*

*Expanding        geographic coverage and product offering*

*Activities        during a business cycle*

*Renewal        and concept development*

*Providing        a complete, customer-oriented offering*

*Improving        fuel efficiency and increasing the use of alternative fuels*

*Enhancing        productivity and cost-efficiency *

----

*Execution        in focus*

*Maintaining        expertise*

**Summary        of Group Businesses**

**Volvo        Trucks**

**Renault        Trucks. **

**Mack        Trucks. **

**Buses.**

**Construction        Equipment.**

**Volvo        Penta**

**Volvo        Aero**

----

**Financial        **
**Services**

**Trucks**

**The        total market. **

**Business        environment. **

**Volvo        Trucks.**

----

|   | · | Manage                  the expected sharp decrease in demand in North                  America. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Ensure                  production capacity for a continued strong European                  market. |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Continue                  developing customer relations in line with the implemented dealer                  strategy. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | Stronger                  focus on communicating the company's core                  values. |
|--------|--------|----------------------------------------------------------------------------------------------|

**Renault        **
**Trucks.**

|   | · | Achieve                  the Service Quality program. |
|--------|--------|-------------------------------------------------------|

|   | · | Improve                  brand image based on the new product portfolio and quality achievements. |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | Harvest                  the benefits of the totally renewed range. |
|--------|--------|---------------------------------------------------------------------|

|   | · | Launch                  successfully the new Renault Maxity. |
|--------|--------|--------------------------------------------------------------|

|   | · | Develop                  soft products sales. |
|--------|--------|-----------------------------------------------|

|   | · | Implement                  cost reduction plan. |
|--------|--------|-------------------------------------------------|

|   | · | Secure                  the product cost-reduction plan. |
|--------|--------|----------------------------------------------------------|

**Mack        Trucks.**

----

|   | · | Manage                  the challenges throughout operations arising from the market cycle,                  while                  maintaining profitability and cost control. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Continue                  working with the completion of Mack Trucks’ product renewal. |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | Continue                  the development of the North American dealer network to strengthen                  sales,                  customer support and aftermarket services. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Continuing                  growth in Mack Trucks’ international                  operations. |
|--------|--------|-----------------------------------------------------------------------------------------------------|

**Products.        **

**Production.**

----

|  Number                  of trucks produced                                            |   | 2002   |    | 2003   |   | 2004    |   | 2005   |    | 2006   |   |
|---------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|
| Volvo                  FL, FE-series                                                        |   |   | 5,640   |   |   | 4,820   |   |   | 4,980   |   |   | 5,052 |   |   | 4,799 |   |
| Volvo                  FL7, 10, and 12-series andFM7,                  9, 10, and 12-series |   |   | 15,300  |   |   | 17,480  |   |   | 19,150  |   |   | 20,102 |   |   | 20,704 |   |
| Volvo                  FH-series                                                            |   |   | 31,880  |   |   | 33,720  |   |   | 45,010  |   |   | 42,951 |   |   | 41,302 |   |
| Volvo                  NL and NH-series                                                     |   |   | 1,490   |   |   | 1,940   |   |   | 1,170   |   |   | 2,312 |   |   | 556 |   |
| Volvo                  VN, VT series and VHD                                                |   |   | 14,300  |   |   | 17,080  |   |   | 25,640  |   |   | 32,256 |   |   | 37,281 |   |
| Volvo                  VM                                                                   |   |   | -       |   |   | 400     |   |   | 1,600   |   |   | 1,842 |   |   | 2242 |   |
| Total                                                                                       |   |   | 68,610  |   |   | 75,440  |   |   | 97,550  |   |   | 104,515 |   |   | 106,884 |   |
| Mack                  CH/CHN                                                                |   |   | 7,540   |   |   | 1,744   |   |   | 2,006   |   |   | 3,786 |   |   | 3,880 |   |
| Mack                  CL                                                                    |   |   | 288     |   |   | 64      |   |   | 170     |   |   | 364 |   |   | 584 |   |
| Mack                  Vision                                                                |   |   | 2,523   |   |   | 4,811   |   |   | 7,283   |   |   | 9,403 |   |   | 8,394 |   |
| Mack                  Granite                                                               |   |   | 4,592   |   |   | 6,217   |   |   | 10,935  |   |   | 16,568 |   |   | 17,019 |   |
| Mack                  Pinnacle                                                              |   |   | -       |   |   | -       |   |   | -       |   |   | - |   |   | 1,076 |   |
| Mack                  DM                                                                    |   |   | 528     |   |   | 458     |   |   | 519     |   |   | 365 |   |   | 1 |   |
| Mack                  DMM                                                                   |   |   | 47      |   |   | -       |   |   | -       |   |   | - |   |   | - |   |
| Mack                  LE                                                                    |   |   | 1,084   |   |   | 964     |   |   | 849     |   |   | 1,238 |   |   | 937 |   |
| Mack                  MR                                                                    |   |   | 1,668   |   |   | 2,034   |   |   | 2,603   |   |   | 3,325 |   |   | 3,901 |   |
| Mack                  RB                                                                    |   |   | 103     |   |   | 130     |   |   | 130     |   |   | 23 |   |   | - |   |
| Mack                  RD                                                                    |   |   | 2,298   |   |   | 921     |   |   | 17      |   |   |   |   |   |   |   |
| Mack                  RD8                                                                   |   |   | 35      |   |   | 54      |   |   | 4       |   |   |   |   |   |   |   |
| Other                                                                                       |   |   | -       |   |   | 1,122   |   |   | 1,121   |   |   | 1,126 |   |   | 976 |   |
| Total                                                                                       |   |   | 20,706  |   |   | 18,519  |   |   | 25,637  |   |   | 36,198 |   |   | 36,768 |   |
| Renault                  Kerax                                                              |   |   | 7,677   |   |   | 6,674   |   |   | 7,063   |   |   | 8,800 |   |   | 9,732 |   |
| Renault                  Midlum                                                             |   |   | 12,545  |   |   | 12,801  |   |   | 16,018  |   |   | 15,484 |   |   | 12,696 |   |
| Renault                  Premium                                                            |   |   | 16,150  |   |   | 15,567  |   |   | 17,250  |   |   | 18,991 |   |   | 23,253 |   |
| Renault                  Magnum                                                             |   |   | 7,848   |   |   | 7,516   |   |   | 8,801   |   |   | 8,208 |   |   | 7,000 |   |
| Total                                                                                       |   |   | 44,220  |   |   | 42,558  |   |   | 49,132  |   |   | 51,483 |   |   | 52,681 |   |
| Total                  Volvo, Mack and Renault                                              |   |   | 133,536 |   |   | 136,517 |   |   | 172,319 |   |   | 192,196 |   |   | 196,333 |   |

**Production        and capacity.**

----

**Markets        and Sales.**

|                              |   |                                  |   | 2004   |   | 2005    |   | 2006   |    |
|-----------------------------------|--------|---------------------------------------|--------|--------|--------|---------|--------|--------|---------|
|                              |   | (In                  millions of SEK) |   |
| Western                  Europe   |   |                                  |   |   |   | 68,664  |   |   | 70,567  |   |   | 75,157 |   |
| Eastern                  Europe   |   |                                  |   |   |   | 8,767   |   |   | 9,139   |   |   | 13,166 |   |
| North                  America    |   |                                  |   |   |   | 35,154  |   |   | 46,129  |   |   | 50,605 |   |
| South                  America    |   |                                  |   |   |   | 5,223   |   |   | 7,657   |   |   | 9,213 |   |
| Asia                              |   |                                  |   |   |   | 12,378  |   |   | 13,551  |   |   | 8,975 |   |
| Other                  markets    |   |                                  |   |   |   | 6,693   |   |   | 8,353   |   |   | 9,190 |   |
| Total                  sales      |   |                                  |   |   |   | 136,879 |   |   | 155,396 |   |   | 166,306 |   |
| Operating                  income |   |                                  |   |   |   | 8,992   |   |   | 11,717  |   |   | 12,657 |   |

**Buses**

**The        total market**

**General.        **

----

**Business        environment.**

**Strategic        development. **

|   | · | Continue                  the implementation of the earnings-improvement program within Volvo                  Buses. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | Shorten                  lead times from order to invoicing. |
|--------|--------|--------------------------------------------------------------|

|   | · | Further                  strengthen positions in China and                  India. |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | All                  employees shall be involved in the Operational Development                  program. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

**Products.**

**Production        and capacity.**

**Markets        and Sales**

|                              |   |                                  |   | 2004   |   | 2005   |   | 2006   |   |
|-----------------------------------|--------|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                              |   | (In                  millions of SEK) |   |
| Western                  Europe   |   |                                  |   |   |   | 6,422  |   |   | 6,564  |   |   | 6,975 |   |
| Eastern                  Europe   |   |                                  |   |   |   | 526    |   |   | 578    |   |   | 534 |   |
| North                  America    |   |                                  |   |   |   | 2,960  |   |   | 4,247  |   |   | 4,910 |   |
| South                  America    |   |                                  |   |   |   | 521    |   |   | 2,641  |   |   | 1,537 |   |
| Asia                              |   |                                  |   |   |   | 1,632  |   |   | 1,612  |   |   | 2,003 |   |
| Other                  markets    |   |                                  |   |   |   | 661    |   |   | 947    |   |   | 897 |   |
| Total                  sales      |   |                                  |   |   |   | 12,722 |   |   | 16,589 |   |   | 16,856 |   |
| Operating                  income |   |                                  |   |   |   | 158    |   |   | 470    |   |   | 633 |   |

----

**Volvo        CE**

**The        total market**

**General**

**Business        environment. **

----

**Strategic        development. **

|   | · | Continued                  development of the excavator business. |
|--------|--------|-------------------------------------------------------------------|

|   | · | Penetration                  of the domestic market for wheel loaders in China. |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Continued                  upgrade of the industrial system to satisfy customer demand. |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | Focused                  strategy for India and Russia. |
|--------|--------|---------------------------------------------------------|

|   | · | Growth                  within services. |
|--------|--------|------------------------------------------|

|   | · | Continued                  focus on tools in order to reach new segments and                  customers. |
|--------|--------|----------------------------------------------------------------------------------------------------------|

**Products.        **

**Markets        and Sales. **

|                              |   |                                  |   | 2004   |   | 2005   |   | 2006   |   |
|-----------------------------------|--------|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                              |   | (In                  millions of SEK) |   |
| Western                  Europe   |   |                                  |   |   |   | 12,443 |   |   | 14,213 |   |   | 16,871 |   |
| Eastern                  Europe   |   |                                  |   |   |   | 1,010  |   |   | 1,311  |   |   | 1,888 |   |
| North                  America    |   |                                  |   |   |   | 8,601  |   |   | 10,337 |   |   | 11,280 |   |
| South                  America    |   |                                  |   |   |   | 922    |   |   | 1,238  |   |   | 1,358 |   |
| Asia                              |   |                                  |   |   |   | 4,961  |   |   | 5,717  |   |   | 6,903 |   |
| Other                  markets    |   |                                  |   |   |   | 1,423  |   |   | 2,000  |   |   | 2,264 |   |
| Total                  Sales      |   |                                  |   |   |   | 29,360 |   |   | 34,816 |   |   | 40,564 |   |
| Operating                  Income |   |                                  |   |   |   | 1,898  |   |   | 2,752  |   |   | 3,888 |   |

**Production        and capacity. **

**Volvo        Penta**

**The        total market.**

**General**

----

**Business        environment. **

**Strategic        development. **

|   | · | Increased                  growth and strong focus on profitability. |
|--------|--------|----------------------------------------------------------------------|

|   | · | Broadened                  customer base in industrial                  engines. |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | Delivery                  precision and shortened lead times in                  production. |
|--------|--------|----------------------------------------------------------------------------------------------|

**Products**

**Production        and capacity. **

**Markets        and Sales**

----

|                              |   |                                  |   | 2004   |   | 2005  |   | 2006   |   |
|-----------------------------------|--------|---------------------------------------|--------|--------|--------|-------|--------|--------|--------|
|                              |   | (In                  millions of SEK) |   |
| Western                  Europe   |   |                                  |   |   |   | 4,723 |   |   | 4,845  |   |   | 5,459 |   |
| Eastern                  Europe   |   |                                  |   |   |   | 184   |   |   | 257    |   |   | 363 |   |
| North                  America    |   |                                  |   |   |   | 2,500 |   |   | 2,832  |   |   | 2,815 |   |
| South                  America    |   |                                  |   |   |   | 142   |   |   | 208    |   |   | 221 |   |
| Asia                              |   |                                  |   |   |   | 1,324 |   |   | 1,427  |   |   | 1,359 |   |
| Other                  markets    |   |                                  |   |   |   | 184   |   |   | 207    |   |   | 268 |   |
| Total                  sales      |   |                                  |   |   |   | 9,057 |   |   | 9,776  |   |   | 10,485 |   |
| Operating                  income |   |                                  |   |   |   | 940   |   |   | 943    |   |   | 1,002 |   |

**Volvo        Aero **

**The        total market.**

**General**

**Business        environment. **

**Strategic        Development. **

|   | · | Further                  develop Volvo Aero’s technology offering, to ensure a role in future                  engine programs. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Fulfill                  commitment in the development and manufacture of the new GEnx engine. |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Expand                  Volvo Aero’s component business. |
|--------|--------|----------------------------------------------------------------|

|   | · | Increase                  volumes and improve profitability in the                  aftermarket. |
|--------|--------|--------------------------------------------------------------------------------------------------|

----

**Products**

**Production        and capacity**

**Markets        and Sales.**

|                              |   |                                  |   | 2004   |   | 2005  |   | 2006   |   |
|-----------------------------------|--------|---------------------------------------|--------|--------|--------|-------|--------|--------|--------|
|                              |   | (In                  millions of SEK) |   |
| Western                  Europe   |   |                                  |   |   |   | 3,130 |   |   | 3,346  |   |   | 3,489 |   |
| Eastern                  Europe   |   |                                  |   |   |   | 49    |   |   | 60     |   |   | 124 |   |
| North                  America    |   |                                  |   |   |   | 3,127 |   |   | 3,612  |   |   | 3,815 |   |
| South                  America    |   |                                  |   |   |   | 138   |   |   | 168    |   |   | 173 |   |
| Asia                              |   |                                  |   |   |   | 400   |   |   | 284    |   |   | 356 |   |
| Other                  markets    |   |                                  |   |   |   | 81    |   |   | 68     |   |   | 91 |   |
| Total                  sales      |   |                                  |   |   |   | 6,925 |   |   | 7,538  |   |   | 8,048 |   |
| Operating                  income |   |                                  |   |   |   | 403   |   |   | 836    |   |   | 345 |   |

**Financial        Services **

----

**Strategic        development. **

|   | · | Improve                  customer satisfaction. |
|--------|--------|-------------------------------------------------|

|   | · | Enhance                  employee recruitment, development and retention activities. |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | Execute                  on market growth plus fee income opportunities. |
|--------|--------|--------------------------------------------------------------------------|

|   | · | Use                  better technology and processes to improve productivity and customer                  service. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | Continue                  to sharpen risk management                  activities |
|--------|--------|----------------------------------------------------------------------------------|

**Expanding        credit portfolio. **

**Suppliers**

**Sources        and availability of raw materials. **

----

**Marketing**

**Research        and Development**

**New        improved products **

**Safety        in focus. **

**Environmental        improvement and utilization. **

----

**Patents,        Trademarks and Licenses**

**Regulatory        Matters**

**Environmental        and Other Regulatory Matters **

----

**Reduced        emissions. **

**4.C.    ****Organizational        Structure**

----

**4.D.    ****Property,        Plants and Equipment**

**Environmentally        adapted production**

**Freight.        **

----

**ITEM        4A.    UNRESOLVED STAFF        COMMENTS.**

----

**ITEM        5.    OPERATING AND        FINANCIAL REVIEW AND PROSPECTS.**

**5.A.    ****Operating        Results****.**

**General**

|                                     |   | 2004   |        | 2005                                  |   | 2006        |   |
|------------------------------------------|--------|--------|-------------|---------------------------------------|--------|-------------|--------|
|                                     |   |   |        | (In                  millions of SEK) |   |
| Net                  sales               |   |   |        |                                  |   |        |   |
| Trucks                                   |   |   | 136,879     |                                  |   | 155,396     |   |   | 166,306 |   |
| Buses                                    |   |   | 12,722      |                                  |   | 16,589      |   |   | 16,856 |   |
| Construction                  Equipment  |   |   | 29,360      |                                  |   | 34,816      |   |   | 40,564 |   |
| Volvo                  Penta             |   |   | 9,057       |                                  |   | 9,776       |   |   | 10,485 |   |
| Volvo                  Aero              |   |   | 6,925       |                                  |   | 7,538       |   |   | 8,048 |   |
| Financial                  Services      |   |   | 9,598       |                                  |   | 7,549       |   |   | 8,969 |   |
| Other                  and eliminations  |   |   | 6,535       |                                  |   | 8,895       |   |   | 7,607 |   |
| Total,                  as reported      |   |   | **210,401** |                                  |   | **240,559** |   |   | **258,835** |   |
|                                     |   |   |        |                                  |   |        |   |   |   |   |
| Operating                  income (loss) |   |   |        |                                  |   |        |   |   |   |   |
| Trucks                                   |   |   | 8,992       |                                  |   | 11,717      |   |   | 12,657 |   |
| Buses                                    |   |   | 158         |                                  |   | 470         |   |   | 633 |   |
| Construction                  Equipment  |   |   | 1,898       |                                  |   | 2,752       |   |   | 3,888 |   |
| Volvo                  Penta             |   |   | 940         |                                  |   | 943         |   |   | 1,002 |   |
| Volvo                  Aero              |   |   | 403         |                                  |   | 836         |   |   | 345 |   |
| Financial                  Services      |   |   | 1,365       |                                  |   | 2,033       |   |   | 2,301 |   |
| Other                                    |   |   | 923         |                                  |   | -598        |   |   | (427 | ) |
| Total,                  as reported      |   |   | **14,679**  |                                  |   | **18,153**  |   |   | **20,399** |   |

**Volvo’s        investment in Scania AB**

**Volvo’s        investment in Henlys Group plc**

----

**Peach        County Holdings, Inc**

**Volvo        and Renault agreement**

**Economic        and market conditions. **

----

**Factors        affecting results. **

**Impact        of Currency Fluctuations.**

**Adoption        of International Financial Reporting Standards. **

**Results        from continuing operations**

**2006        compared with 2005**

**Volvo        Group. **

----

**Trucks.**

**Buses.**

----

**Construction        Equipment**

**Volvo        **
**Penta**

**Volvo        Aero.**

**Volvo        Financial Services, VFS. **

----

**Other.        **

**Net        interest expense.**

**Other        financial income and expense.**

**Income        taxes**

**Minority        interest**

**Financial        Services operations**

| Condensed                  income statements, Financial Services |   | 2004                                  |   | 2005   |   | 2006  |   |
|------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------|-------|--------|
|                                                             |   | (In                  millions of SEK) |   |
| Net                  sales                                       |   |                                  | 9,598  |   |   | 7,549 |   |   | 8,969 |   |
| Income                  after financial items                    |   |                                  | 1,365  |   |   | 2,033 |   |   | 2,301 |   |
| Income                  taxes                                    |   |                                  | (430   | )      |   | (609  | )      |   | (756 | ) |
| Net                  income                                      |   |                                  | 935    |   |   | 1,424 |   |   | 1,545 |   |

----

|                                                                                             |   | Volvo                  Group, excl Financial Services 1 |   | Financial                  Services |   | Total                  Volvo Group |   |
|--------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|-------------------------------------|--------|------------------------------------|--------|
| Condensed                  balance sheets                                                        |   | 2004                                                    |   | 2005                                |   | 2006                               |   | 2004 |   | 2005 |   | 2006 |   | 2004 |   | 2005 |   | 2006 |   |
|                                                                                             |   | (In                  billions of SEK, except for %)     |   |
| Assets                                                                                           |   |                                                    |   |                                |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intangible                  assets                                                               |   |                                                    | 17.6   |                                |   | 20.3                               |   |   | 19.1 |   |   | 0.0 |   |   | 0.1 |   |   | 0.1 |   |   | 17.6 |   |   | 20.4 |   |   | 19.1 |   |
| Property,                  plant and equipment                                                   |   |                                                    | 27.3   |                                |   | 31.3                               |   |   | 30.5 |   |   | 3.9 |   |   | 3.7 |   |   | 3.9 |   |   | 31.2 |   |   | 35.1 |   |   | 34.4 |   |
| Assets                  under operating leases                                                   |   |                                                    | 8.5    |                                |   | 10.3                               |   |   | 11.8 |   |   | 0.8 |   |   | 0.7 |   |   | 0.3 |   |   | 19.5 |   |   | 20.8 |   |   | 20.5 |   |
| Shares                  and participations                                                  |   |                                                    | 10.1   |                                |   | 10.3                               |   |   | 16.6 |   |   | 0.2 |   |   | 0.0 |   |   | 0.0 |   |   | 2.0 |   |   | 0.8 |   |   | 6.9 |   |
| Long-term                  customer finance receivables                                          |   |                                                    | 0.1    |                                |   | 0.7                                |   |   | 0.6 |   |   | 33.9 |   |   | 39.1 |   |   | 39.3 |   |   | 25.2 |   |   | 31.2 |   |   | 32.1 |   |
| Long-term                  interest bearing receivables                                          |   |                                                    | 1.8    |                                |   | 1.4                                |   |   | 3.5 |   |   | 0.0 |   |   | 0.1 |   |   | 0.1 |   |   | 1.7 |   |   | 1.4 |   |   | 3.1 |   |
| Other                  long-term receivables                                                     |   |                                                    | 6.5    |                                |   | 7.2                                |   |   | 7.7 |   |   | 0.2 |   |   | 0.3 |   |   | 0.4 |   |   | 6.1 |   |   | 7.0 |   |   | 7.9 |   |
| Inventories                                                                                      |   |                                                    | 28.3   |                                |   | 33.6                               |   |   | 33.9 |   |   | 0.3 |   |   | 0.3 |   |   | 0.3 |   |   | 28.6 |   |   | 33.9 |   |   | 34.2 |   |
| Short-term                  customer finance receivables                                         |   |                                                    | 0.1    |                                |   | 0.6                                |   |   | 0.6 |   |   | 29.5 |   |   | 38.9 |   |   | 37.0 |   |   | 26.0 |   |   | 33.3 |   |   | 32.6 |   |
| Short-term                  interest bearing receivables                                         |   |                                                    | 10.3   |                                |   | 6.3                                |   |   | 9.7 |   |   | 0.0 |   |   | 0.0 |   |   |   |   |   | 1.6 |   |   | 0.5 |   |   | 1.0 |   |
| Other                  short-term receivables                                                    |   |                                                    | 30.0   |                                |   | 36.8                               |   |   | 35.6 |   |   | 1.7 |   |   | 1.6 |   |   | 1.5 |   |   | 29.7 |   |   | 35.9 |   |   | 34.7 |   |
| Non-current                  assets held for sale                                                |   |                                                    |   |                                |   |                               |   |   | 0.8 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 0.8 |   |
| Marketable                  securities                                                           |   |                                                    | 25.8   |                                |   | 28.7                               |   |   | 20.3 |   |   | 0.1 |   |   | 0.1 |   |   | 0.0 |   |   | 26.0 |   |   | 28.8 |   |   | 20.3 |   |
| Cash                  and bank accounts                                                          |   |                                                    | 8.8    |                                |   | 7.4                                |   |   | 9.6 |   |   | 0.9 |   |   | 0.9 |   |   | 1.2 |   |   | 8.8 |   |   | 8.1 |   |   | 10.8 |   |
| Total                  assets                                                                    |   |                                                    | 175.2  |                                |   | 194.9                              |   |   | 200.3 |   |   | 71.5 |   |   | 85.8 |   |   | 84.1 |   |   | 224.0 |   |   | 257.2 |   |   | 258.4 |   |
|                                                                                             |   |                                                    |   |                                |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders’                  equity and liabilities                                      |   |                                                    |   |                                |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders’                  equity                                                      |   |                                                    | 70.1   |                                |   | 78.8                               |   |   | 87.2 |   |   | 8.3 |   |   | 9.6 |   |   | 9.7 |   |   | 70.2 |   |   | 78.8 |   |   | 87.2 |   |
| Provisions                  for post employment benefits                                         |   |                                                    | 14.7   |                                |   | 12.0                               |   |   | 8.7 |   |   | 0.0 |   |   | 0.0 |   |   | 0.0 |   |   | 14.7 |   |   | 12.0 |   |   | 8.7 |   |
| Other                  provisions                                                                |   |                                                    | 14.1   |                                |   | 17.1                               |   |   | 19.4 |   |   | 0.9 |   |   | 1.3 |   |   | 1.3 |   |   | 15.0 |   |   | 18.5 |   |   | 21.0 |   |
| Loans                                                                                            |   |                                                    | 14.0   |                                |   | 13.1                               |   |   | 9.8 |   |   | 57.8 |   |   | 70.0 |   |   | 68.0 |   |   | 61.8 |   |   | 74.9 |   |   | 66.9 |   |
| Liabilities                  associated with assets held for sale                                |   |                                                    |   |                                |   |                               |   |   | 0.3 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 0.3 |   |
| Other                  liabilities                                                               |   |                                                    | 62.3   |                                |   | 73.9                               |   |   | 74.9 |   |   | 4.5 |   |   | 4.9 |   |   | 5.1 |   |   | 62.3 |   |   | 73.0 |   |   | 74.3 |   |
| Total                  shareholders’ equity and liabilities                                |   |                                                    | 175.2  |                                |   | 194.9                              |   |   | 200.3 |   |   | 71.5 |   |   | 85.8 |   |   | 84.1 |   |   | 224.0 |   |   | 257.2 |   |   | 258.4 |   |
| Shareholders’                  equity and minority interests as percentage of total assets |   |                                                    | 40.0   |                                |   | 40.4                               |   |   | 43.5 |   |   | 11.6 |   |   | 11.2 |   |   | 11.5 |   |   | 31.3 |   |   | 30.6 |   |   | 33.7 |   |

| 1 | Financial                  Services operations are reported in accordance with the equity                  method. |
|---|--------------------------------------------------------------------------------------------------------------------|

**Net        sales and income.**

----

**Financial        position.**

**2005        compared with 2004**

**Volvo        Group. **

**Trucks**

**Buses.**

----

**Construction        Equipment**

**Volvo        Penta**

**Volvo        Aero.**

**Volvo        Financial Services, VFS. **

**Other.        **

**Net        interest expense. **

----

**Other        financial income and expenses. **

**Income        taxes. **

**Minority        interests.**

**5.B.    ****Liquidity        and Capital Resources**

**Cash        flow from operating activities**

**Cash        flow from/used in investing activities**

----

**Cash        flow from financing activities.**

**Change        in cash and cash equivalents.**

**Net        financial position**

|  (in                  millions of SEK)                                         |   | Volvo                  Group, excl Financial Services |    |
|-------------------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|
| Cash                  and cash equivalents                                          |   |                                                  | 9,583   |   |
| Marketable                  securities 1)                                           |   |                                                  | 20,324  |   |
| Short-term                  interest-bearing receivables and loans                  |   |                                                  | 9,751   |   |
| Long-term                  interest-bearing receivables and loans                   |   |                                                  | 3,463   |   |
| Non-current                  assets held for sale, interest-bearing                 |   |                                                  | 5       |   |
| Financial                  assets                                                   |   |                                                  | 43,126  |   |
| Loans                                                                               |   |                                                  | (9,779  | ) |
| Provisions                  for pensions and other post-employment benefits         |   |                                                  | (8,661  | ) |
| Liabilities                  associated with assets held for sale, interest-bearing |   |                                                  | (7      | ) |
| Financial                  liabilities                                              |   |                                                  | (18,447 | ) |
|                                                                                |   |                                                  |    |   |
| Net                  financial assets                                               |   |                                                  | 24,679  |   |

----

**Credit        risks.**

**Policies        and procedures. **

**Commercial        exposure. **

----

**Financial        exposure. **

**Interest-rate        risks. **

**Liquidity        risks. **

**Non-current        liabilities. **

**Residual        value risks. **

**Repurchase        of shares of AB Volvo.**

----

**Capital        Expenditures for Property, Plant and Equipment.**

|                                              |   | (in                  billions of SEK) |   |
|---------------------------------------------------|--------|---------------------------------------|--------|
|                                              |   |                                  |   |
| Trucks                                            |   |                                  | 4.8    |   |
| Buses                                             |   |                                  | 0.1    |   |
| Construction                  Equipment           |   |                                  | 0.7    |   |
| Volvo                  Penta                      |   |                                  | 0.2    |   |
| Volvo                  Aero                       |   |                                  | 0.5    |   |
| Other                  and corporate expenditures |   |                                  | 0.5    |   |
| Total                                             |   |                                  | 6.8    |   |

**U.S.        GAAP information**

**Critical        Accounting Policies and Estimates**

**Introduction        of new accounting policies**

----

**5.C.    ****Research        and Development, Patents and Licenses**

**5.D.    ****Trend        Information**

**5.E.    ****Off-Balance        Sheet Arrangements**

|   | i. | guaranteed                  bank loans and other credits for customers and others in an amount                  of SEK                  1,109 million. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ii. | tax                  claims in an amount of SEK 983 million for actual or anticipated                  actions                  against the Volvo Group for which provisions are not considered                  necessary. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | iii. | other                  contingent liabilities amounting to SEK 5,634                  million. |
|--------|------|------------------------------------------------------------------------------------------------|

**5.F.    ****Tabular        Disclosure of Contractual Obligations**

| (in                  millions of SEK)                                                                                    |   | Payments                  Due by Period |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                                                          |   | Total                                   |   | Less                  than 1                  year |   | 1-3years |   | 4-5years |   | After                  5years |   |
|  Long-term                  debt, including current maturities and financial lease obligations                  (a) |   |                                    | 59,118 |   |   | 38,712 |   |   | 14,584 |   |   | 5,098 |   |   | 724 |   |
| Operating                  leases                                                                                        |   |                                    | 2,877  |   |   | 841 |   |   | 709 |   |   | 779 |   |   | 528 |   |
| Total                                                                                                                    |   |                                    | 61,995 |   |   | 39,553 |   |   | 15,293 |   |   | 5,897 |   |   | 1,252 |   |

----

----

**ITEM        6. DIRECTORS, SENIOR MANAGEMENT AND        EMPLOYEES**

**6.A.    ****Directors        and Senior Management**

**Corporate        bodies in corporate governance**

**Swedish        Code of Corporate Governance**

**Election        Committee**

----

**Board        of Directors**

----

|                                                            |   | **Board** |   | **Audit                  Committee** |   | **Remuneration                  Committee** |   |
|-----------------------------------------------------------------|--------|-----------|--------|--------------------------------------|--------|---------------------------------------------|--------|
| Finn                  Johnsson                                  |   |      | 8      |                                 |   |                                        |   |   | 4 |   |
| Per-Olof                  Eriksson                              |   |      | 8      |                                 |   | 4                                           |   |   |   |   |
| Tom                  Hedelius                                   |   |      | 8      |                                 |   |                                        |   |   | 4 |   |
| Leif                  Johansson                                 |   |      | 8      |                                 |   |                                        |   |   |   |   |
| Louis                  Schweitzer                               |   |      | 7      |                                 |   |                                        |   |   | 4 |   |
| Philippe                  Klein 1                               |   |      | 5      |                                 |   |                                        |   |   |   |   |
| Ying                  Yeh 1                                     |   |      | 4      |                                 |   | 3                                           |   |   |   |   |
| Peter                  Bijur 1                                  |   |      | 4      |                                 |   | 3                                           |   |   |   |   |
| Ken                  Whipple 2                                  |   |      | 3      |                                 |   | 1                                           |   |   |   |   |
| Haruko                  Fukoda 2                                |   |      | 2      |                                 |   | 1                                           |   |   |   |   |
| Patrick                  Faure 2                                |   |      | 1      |                                 |   |                                        |   |   |   |   |
| Olle                  Ludvigsson, employee representative       |   |      | 8      |                                 |   |                                        |   |   |   |   |
| Johnny                  Rönnkvist, employee representative |   |      | 8      |                                 |   |                                        |   |   |   |   |
| Martin                  Linder, employee representative         |   |      | 7      |                                 |   |                                        |   |   |   |   |
| **Total                  number of meetings**                   |   |      | **8**  |                                 |   | **4**                                       |   |   | **4** |   |

**Audit        Committee**

----

**Remuneration        Committee**

**Disclosure        Committee**

----

| **Name**                                  | **Age**  | **Position                    and Other Directorships**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-------------------------------------------|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Finn                    Johnsson          | 61       | Chairman                    of the Board (since February 2004). Director (since 1998). Chairman                    of the                    Remuneration Committee. Chairman of the Boards of Luvata Oy,                    Thomas                    Concrete Group AB, Unomedical A/S, KappAhl AB and City Airline.                    Member of                    the Boards of Skanska AB and AB Industriv’rden.                                                                                                                                                                                   |
| Peter                    Bijur            | 65       | Director                    (since 2006). Member of the Audit Committee. MBA Marketing, BA                    Political                    Science. Board member: Gulfmark Offshore Inc.                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Per-Olof                    Eriksson      | 69       | Director                    (since 1994). Chairman of the Audit Committee. Master of Engineering,                    Hon.                    Dr. of Technology. Board Chairman: Callans Tr’ AB, Cross Country Systems                    AB, Odlander, Fredriksson & Co and OFP V Advisor AB. Board member:                    Assa Abloy AB, Biotage AB, Elkem AS, Investment AB Öresund, KTH Holding                    AB, Senea AB and Södersjukhuset AB. Member of the Royal Swedish Academy of                    Engineering Sciences.                                              |
| Tom                    Hedelius      | 68  | Director                    (since 1994). Member of the Remuneration Committee. Master of                    Business                    Administration, Hon. Dr. of Economics. Board Chairman: AB Industriv’rden,                    Bergman & Beving AB, Anders Sandrews Stiftelse and Jan Wallanders och                    Tom Hedelius stiftelse. Honorary Chairman: Svenska Handelsbanken.                    Vice                    Chairman: Addtech AB and Lagercrantz Group AB. Board member:                    Svenska                    Cellulosa Aktiebolaget SCA and Lundbergs AB.  |
| Leif                    Johansson    | 56  | Director                    (since 1997). Master of Engineering. President of AB Volvo and                    Chief                    Executive Officer of the Volvo Group since 1997. With Volvo since                    1997.                    Board member: Bristol-Myers Squibb Company, Svenska Cellulosa                    Aktiebolaget                    SCA, Confederation of Swedish Enterprise and The Association                    of Swedish                    Engineering Industries. Member of the Royal Swedish Academy of                    Engineering                    Sciences. |
| Philippe                    Klein         | 50       | Director                    (since 2006). Senior Vice President CEO/COO Office and Corporate                    Administration, Nissan Motor Co., Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Louis                    Schweitzer  | 65  | Director                    (since 2001). Member of the Remuneration Committee. Bachelor                    of Laws.                    Board Chairman: Renault, AstraZeneca Plc. Vice President of the                    Philips                    Supervisory Board. Board member: Electricité de France, BNP-Paribas,                    Véolia and L ́Oréal.                                                                                                                                                                                                                          |
| Ying                    Yeh               | 58       | Director                    (since 2006). Member of the Audit Committee. President and Chairman                    of                    Kodak North Asia Region.                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Lars                    Westerberg        | 59       | Director                    (since April 4, 2007). Member of the Audit Committee. Board Chairman:                    Autoliv Inc. and Husqvarna AB. Board member: SSAB and Plastal                    AB.                                                                                                                                                                                                                                                                                                                                                                                                      |
| Martin                    Linder*         | 34       | Director                    (since May 2004)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Olle                    Ludvigsson*       | 59       | Director                    (since 1988). Deputy Director 1983 - 1988.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Johnny                    Rönnkvist* | 60       | Director                    (since 1999).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Berth                    Thulin*          | 56       | Deputy                    Director (since 1999).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Margareta                    Öhlin*  | 60       | Deputy                    Director (since 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

**Secretary        to the Board**

| Eva                    Persson | 54 | Secretary                    to the Board (since 1997). Senior Vice President and General                    Counsel of AB                    Volvo. |
|--------------------------------|----|------------------------------------------------------------------------------------------------------------------------------------------------------|

**Volvo        Group Executive Committee**

| **Name**                                  | **Age** | **Position**                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Leif                    Johansson         | 56      | President                    of AB Volvo and Chief Executive Officer of the Volvo Group (since                    1997).                    President and CEO of Electrolux Group (1994-1997), President                    of AB                    Electrolux (1991-1997), President of Facit AB (1982-1983), President                    of                    Husqvarna Motorcyklar AB (1979-1981). Member of Volvo Board (since                    1997). |
| Jorma                    Halonen     | 59      | Executive                    Vice President of AB Volvo and Deputy CEO (since 2004). President of                    Volvo Truck Corporation (2001-2004). Various positions at Scania                    (1990-2001). Member of Group Executive Committee (since                    2002).                                                                                                                                                                 |
| Pär                    Östberg  | 45      | Born                    1962. Senior Vice President of AB Volvo and CFO of the Volvo                    Group since                    December 2005. Senior Vice President and CFO of Renault Trucks                    (2004-2005). Member of the Group Executive Committee since December                    2005,                    responsible for finance, strategy and business                    development.                                         |
| Eva                    Persson            | 54      | Senior                    Vice President of AB Volvo and General Counsel of the Volvo Group                    (since                    1997). Member of Group Executive Committee (since 1997), responsible                    for                    legal, tax and security matters.                                                                                                                                                                        |
| Stefan                    Johnsson        | 48      | Senior                    Vice President of AB Volvo responsible for business units and                    human                    resources. Senior Vice President and CFO of the Volvo Group (1998-November                    2005). President of Volvo Group Finance Sweden (1994-1998). Member                    of                    Group Executive Committee (since 1998).                                                                           |
| Per                    Löjdquist     | 58      | Senior                    Vice President of AB Volvo (since 1997), responsible for Corporate                    Communications and Brand Management. Member of the Group Executive                    Committee (since 1997).                                                                                                                                                                                                                                   |
| Jan-Eric                    Sundgren      | 56      | Senior                    Vice President of AB Volvo (since 2006), responsible for Public                    and                    Environmental Affairs. Member of the Group Executive Committee                    (since                    2006).                                                                                                                                                                                                          |
| Lars-Göran                    Moberg | 64      | President                    of Volvo Powertrain (since 2001). Member of the Group Executive                    Committee                    (since 2001).                                                                                                                                                                                                                                                                                                      |
| Staffan                    Jufors         | 56      | President                    of Volvo Trucks (since 2004). President of AB Volvo Penta (1998-2004).                    Vice President of Volvo Car Corporation, Olofström (1992-1998). Member of                    the Group Executive Committee (since 1998).                                                                                                                                                                                            |
| Stefano                    Chmielewski    | 55      | President                    of Renault Trucks (since May 1, 2003). Senior Vice President                    Sales,                    Renault Trucks 2001-2003. Various positions with Iveco and Volkswagen                    1982-2001. Member of Volvo Group Executive Committee (since                    2003).                                                                                                                                           |
| Paul                    Vikner            | 58      | President                    of Mack Trucks, Inc. since 2001. Executive Vice President of                    Sales and                    Marketing, Mack Trucks, Inc. 1996-2001. Previously at Iveco Trucks                    North                    America and Isuzu Trucks North America 1972-1994. Member of Group                    Executive Committee (since                    2004).                                                              |

----

| Iwao                    Nakamura       | 65 | President                    of Nissan Diesel since 2002, and has earlier held various positions                    within                    Nissan Motor, including being a member of the Board of Directors.                    Member                    of Volvo Group Executive Committee since April 18,                    2007.  |
|----------------------------------------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Håkan                    Karlsson | 46 | President                    of Volvo Bus Corporation. President of Volvo Logistics 2000-2003.                    Member                    of Group Executive Committee (since 2003).                                                                                                                                                    |
| Tony                    Helsham        | 53 | President                    of Volvo Construction Equipment (since 2000).  President and CEO of                    Euclid Hitachi Heavy Equipment (1995-1998). President of Volvo                    Construction Equipment Korea, (1998-2000). Member of Group Executive                    Committee (since 2000).           |
| Göran                    Gummeson | 60 | President                    of Volvo Penta (since 2004). Various positions with Volvo Penta                    since                    1991, head of Volvo Penta’s European operations (1998-2004). Member of the                    Group Executive Committee (since 2004).                                                      |
| Olof                    Persson        | 43 | President                    of Volvo Aero Corporation since 2006. Member of Group Executive                    Committee                    since July 1 2006. With Volvo since 2006.                                                                                                                                                    |
| Salvatore                    L Mauro   | 47 | President                    of Volvo Financial Services (since 2001). President of Volvo                    Car Finance                    Europe (1999-2001). Vice President and CFO Volvo Car Finance                    Inc.                    (1993-1996). Member of the Group Executive Committee (since                    2001). |

**6.B.    ****Compensation**

----

**6.C.    ****Board        Practices**

**6.D.    ****Employees**

|                                    |   | 2004   |   | 2005   |   | 2006   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Trucks                                  |   |   | 49,450 |   |   | 50,240 |   |   | 49,900 |   |
| Buses                                   |   |   | 7,700  |   |   | 7,710  |   |   | 7,760 |   |
| Construction                  Equipment |   |   | 9,930  |   |   | 10,290 |   |   | 11,050 |   |
| Volvo                  Penta            |   |   | 1,580  |   |   | 1,560  |   |   | 1,650 |   |
| Volvo                  Aero             |   |   | 3,350  |   |   | 3,460  |   |   | 3,510 |   |
| Financial                  Services     |   |   | 1,100  |   |   | 1,070  |   |   | 1,140 |   |
| Other                  operations       |   |   | 7,970  |   |   | 7,530  |   |   | 8,180 |   |
| Total,                  as reported     |   |   | 81,080 |   |   | 81,860 |   |   | 83,190 |   |

|                                |   | 2004   |   | 2005   |   | 2006   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Europe                              |   |   | 57,460 |   |   | 56,720 |   |   | 57,900 |   |
| North                  America      |   |   | 14,620 |   |   | 15,140 |   |   | 14,820 |   |
| South                  America      |   |   | 3,110  |   |   | 3,690  |   |   | 3,890 |   |
| Asia                                |   |   | 4,130  |   |   | 4,210  |   |   | 4,420 |   |
| Other                  markets      |   |   | 1,760  |   |   | 2100   |   |   | 2,160 |   |
| Total,                  as reported |   |   | 81,080 |   |   | 81,860 |   |   | 83,190 |   |

----

**6.E.    ****Share        Ownership**

| **Board                    Members**        | **Holdings,                    April 30, 2007****1****,****2,**                                                                                                                |
|---------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                        |                                                                                                                                                                           |
| Finn                    Johnsson            | 20,000                    Volvo shares, including 10,000 Series B shares and 4,000 redemption                    shares                                                        |
| Per-Olof                    Eriksson        | 31,000                    Volvo Series A shares, and 6,200 redemption shares                                                                                                   |
| Tom                    Hedelius             | 13,465                    Volvo shares, including 10,000 Series A shares and 2,693 redemption                    shares                                                        |
| Leif                    Johansson           | 292,810                    Volvo shares, including 257,690 Series B shares, 58,562 redemption                    shares                    and 50,000 employee stock options3. |
| Louis                    Schweitzer         | 10,000                    Volvo Series B shares and 2,000 redemption shares                                                                                                    |
| Philippe                    Klein           | 1,300                    Volvo Series B shares and 260 redemption shares                                                                                                       |
| Peter                    Bijur              | None                                                                                                                                                                           |
| Ying                    Yeh                 | None                                                                                                                                                                           |
| Lars                    Westerberg          | None                                                                                                                                                                           |
|                                        |                                                                                                                                                                           |
| **Deputy                    Board Members** |                                                                                                                                                                           |
|                                        |                                                                                                                                                                           |
| Martin                    Linder            | None                                                                                                                                                                           |
| Olle                    Ludvigsson          | 775                    Volvo Shares, including 525 Series B shares and 155 redemption                    shares                                                                |
| Johnny                    Rönnkvist    | 1,425                    Volvo shares, including 1,175 Series A shares and 285 redemption                    shares                                                            |
| Berth                    Thulin             | 500                    Volvo Series B shares and 100 redemption shares                                                                                                         |
| Margareta                    Öhlin     | None                                                                                                                                                                           |
|                                        |                                                                                                                                                                           |
| **Executive                    officers**   | **Holdings,                    April 30, 2007****1****,****2,**                                                                                                                |
|                                        |                                                                                                                                                                           |
| Leif                    Johansson           | 292,810                    Volvo shares, including 257,690 Series B shares, 58,562 redemption                    shares                    and 50,000 employee stock options3  |
| Jorma                    Halonen            | 40,000                    Volvo Series B shares, 8,000 redemption shares and 25,000 employee                    stock                    options3                              |
| Stefano                    Chmielewski      | None                                                                                                                                                                           |
| Paul                    Vikner              | 10,000                    Volvo Series B shares and 2,000 redemption shares                                                                                                    |
| Håkan                    Karlsson      | 42,210                    Volvo shares, including 40,875 Series B shares and 8,442 redemption                    shares                                                        |
| Tony                    Helsham             | None                                                                                                                                                                           |
| Staffan                    Jufors           | 29,790                    Volvo shares, including 24,020 Series B shares and 5,958 redemption                    shares                                                        |
| Göran                    Gummeson      | 52,195                    Volvo Series B shares and 10,439 redemption shares                                                                                                   |
| Olof                    Persson             | 11,250                    Volvo Series B shares and 2,250 redemption shares                                                                                                    |
| Iwao                    Nakamura            | None                                                                                                                                                                           |
| Salvatore                    L. Mauro       | 1,003                    American Depositary Receipts (ADRs) of AB Volvo                                                                                                       |
| Lars-Göran                    Moberg   | 69,290                    Volvo shares, including 68,260 Series B shares, 13,858 redemption                    shares                    and 25,000 employee stock options3    |
| Stefan                    Johnsson          | 40,375                    Volvo shares, including 40,000 Series B shares and 8,075 redemption                    shares                                                        |
| Per                    Löjdquist       | 53,225                    Volvo shares, including 36,445 Series B shares and 10,645 redemption                    shares                                                       |
| Eva                    Persson              | 10,000                    Volvo shares, including 8,740 Series B shares and 2,000 redemption                    shares                                                         |
| Pär                    Östberg    | 25,000                    Volvo Series B shares and 5,000 redemption shares                                                                                                    |
| Jan-Eric                    Sundgren        | 8,335                    Volvo Series B shares and 1,667 redemption                    shares                                                                                  |

** **
**.        **

----

**Option        Programs and Share Based Incentive Programs**

**Profit        sharing and Volvo Company Pension.**

**ITEM        7. MAJOR SHAREHOLDERS AND RELATED PARTY        TRANSACTIONS.**

**7.A.    ****Major        Shareholders**

----

**7.B.    ****Related        Party Transactions**

----

**7.C.    ****Interests        of Experts and Counsel**

----

**ITEM        8.  FINANCIAL INFORMATION**

|  | **8.A.** | **Consolidated                  Statements and Other Financial                  Information** |
|--|----------|-----------------------------------------------------------------------------------------------|

|   | **8.A.1** | See                  Item 18. |
|--------|-----------|-------------------------------|

|   | **8.A.2** | See                  Item 18. |
|--------|-----------|-------------------------------|

|   | **8.A.3** | See                  “Report of Independent Registered Public Accounting Firm “, page                  F-2. |
|--------|-----------|-------------------------------------------------------------------------------------------------------------------------|

|   | **8.A.4** | We                  have complied with this                  requirement. |
|--------|-----------|---------------------------------------------------------------------------|

|   | **8.A.5** | Not                  applicable. |
|--------|-----------|----------------------------------|

|   | **8.A.6** | Volvo                  Group’s exports from Sweden were SEK 80,517,  71,133 and 62,653,                  millions the respective year 2006, 2005 and 2004. The corresponding                  percentages, 31%, 30% and 30% of total                  sales. |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**8.A.7    **
**Litigation**

----

| **8.A.8** | **Dividend                    policy.** |
|-----------|-----------------------------------------|

| Year   |   | Dividend                      Paid per Share |   |
|--------|--------|----------------------------------------------|--------|
|   |   | (SEK)                                        |   |   | (US$1) |   |
| 2002   |   |                                         | 8.00   |   |   |   | 0.95 |   |
| 2003   |   |                                         | 8.002  |   |   |   | 1.06 |   |
| 2004   |   |                                         | 12.50  |   |   |   | 1.79 |   |
| 2005   |   |                                         | 16.75  |   |   |   | 2.16 |   |
| 2006   |   |                                         | 25.003 |   |   |   | 3.68 |   |

----

| 1 | Translated                    for convenience only into dollars at the Noon Buying Rate on                    the dividend                    payment date. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | In                    addition, a dividend of 2 shares in Ainax AB for every 31 Volvo                    shares was                    distributed on June 8, 2004. The Annual General Meeting of AB                    Volvo                    resolved to transfer all A shares in Scania AB held by Volvo                    to Ainax AB                    and thereafter to distribute 27,060,958 shares in Ainax AB to                    Volvo’s                    shareholders. The value of the distribution of shares in Ainax                    AB was set                    at SEK 6,309,538,645, corresponding to approximately SEK 15.00                    per Volvo                    share. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | In                    addition, and an extraordinary payment was made through a 6:1                    share split                    in which the sixth share was redeemed by AB Volvo for an amount                    of SEK 25                    per share. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**8.B.    Significant          Changes**

----

**ITEM        9.  THE OFFER AND LISTINGS.**

|  | **9.A.** | **Offer                    and Listing                    Details** |
|--|----------|---------------------------------------------------------------------|

|  | **9.A.1.** | Not                    applicable. |
|--|------------|------------------------------------|

|  | **9.A.2.** | Not                    applicable. |
|--|------------|------------------------------------|

|  | **9.A.3.** | Not                    applicable. |
|--|------------|------------------------------------|

**9.A.4**

** **
**. **

|                                                                                     |   | **A                      shares**             |   |   | **B                      shares**             |   |   | **ADSs**                             |   |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|--------------------------------------|--------|
|                                                                                     |   | **High**                                      |   |   | **Low**                                       |   |   | **High**                             |   |   | **Low** |   |   | **High** |   |   | **Low** |   |
|                                                                                     |   | **(SEK per                      Share)** |   |   | **(SEK per                      Share)** |   |   | **($                      per ADS)** |   |
| **Annual                      information for the past                      five years** |   |                                          |   |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |
| 2006                                                                                     |   |                                          | 491    |   |                                          |   | 319.5  |                                 |   |   | 477.5 |   |   |   | 326.5 |   |   |   | 69.13 |   |   |   | 42.64 |   |
| 2005                                                                                     |   |                                          | 368.5  |   |                                          |   | 249.5  |                                 |   |   | 378.5 |   |   |   | 260 |   |   |   | 50.50 |   |   |   | 37.79 |   |
| 2004                                                                                     |   |                                          | 272    |   |                                          |   | 210    |                                 |   |   | 283 |   |   |   | 220.5 |   |   |   | 41.36 |   |   |   | 30.29 |   |
| 2003                                                                                     |   |                                          | 216    |   |                                          |   | 130.5  |                                 |   |   | 225 |   |   |   | 136 |   |   |   | 30.62 |   |   |   | 16.03 |   |
| 2002                                                                                     |   |                                          | 201    |   |                                          |   | 117    |                                 |   |   | 209.5 |   |   |   | 124 |   |   |   | 20.90 |   |   |   | 13.40 |   |

| **Quarterly                      information for the                      past two years** |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| **2007**                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| First                      Quarter                                                         |   |   | 605    |   |   |   | 478    |   |   |   | 595    |   |   |   | 463    |   |   |   | 85.75  |   |   |   | 65.91  |   |
| **2006**                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| First                      Quarter                                                         |   |   | 373    |   |   |   | 328.5  |   |   |   | 382.5  |   |   |   | 338    |   |   |   | 49.55  |   |   |   | 42.64  |   |
| Second                      Quarter                                                        |   |   | 382.5  |   |   |   | 319.5  |   |   |   | 388    |   |   |   | 326.5  |   |   |   | 53.45  |   |   |   | 44.12  |   |
| Third                      Quarter                                                         |   |   | 454.5  |   |   |   | 353.5  |   |   |   | 436.5  |   |   |   | 357.5  |   |   |   | 60.34  |   |   |   | 49.32  |   |
| Fourth                      Quarter                                                        |   |   | 491    |   |   |   | 443    |   |   |   | 477.5  |   |   |   | 429.5  |   |   |   | 69.13  |   |   |   | 58.65  |   |
| **2005**                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| First                      Quarter                                                         |   |   | 317.5  |   |   |   | 249.5  |   |   |   | 330.5  |   |   |   | 260    |   |   |   | 48.36  |   |   |   | 37.79  |   |
| Second                      Quarter                                                        |   |   | 310    |   |   |   | 267.5  |   |   |   | 321    |   |   |   | 278    |   |   |   | 44.95  |   |   |   | 39.39  |   |
| Third                      Quarter                                                         |   |   | 344.5  |   |   |   | 306    |   |   |   | 355.5  |   |   |   | 316.5  |   |   |   | 45.50  |   |   |   | 40.58  |   |
| Fourth                      Quarter                                                        |   |   | 368.5  |   |   |   | 295    |   |   |   | 378.5  |   |   |   | 305    |   |   |   | 47.50  |   |   |   | 38.30  |   |

| **Monthly                      information for most                      recent six months** |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| April                      2007*                                                             |   |   | 134    |   |   |   | 114.5  |   |   |   | 131.5  |   |   |   | 111.7  |   |   |   | 98.2   |   |   |   | 84.5   |   |
| March                      2007                                                              |   |   | 605    |   |   |   | 552    |   |   |   | 595    |   |   |   | 538    |   |   |   | 85.75  |   |   |   | 75.44  |   |
| February                      2007                                                           |   |   | 594    |   |   |   | 523    |   |   |   | 578    |   |   |   | 511    |   |   |   | 82.19  |   |   |   | 73.15  |   |
| January                      2007                                                            |   |   | 525    |   |   |   | 478    |   |   |   | 510    |   |   |   | 463    |   |   |   | 73.51  |   |   |   | 65.91  |   |
| December                      2006                                                           |   |   | 486.5  |   |   |   | 456    |   |   |   | 473    |   |   |   | 443    |   |   |   | 69.13  |   |   |   | 65.60  |   |
| November                      2006                                                           |   |   | 491    |   |   |   | 455    |   |   |   | 477.5  |   |   |   | 441    |   |   |   | 66.80  |   |   |   | 62.42  |   |

|  | * | On                  April 26, 2007, the 6:1 split of the Volvo share took effect on                  the                  Stockholm Stock Exchange in Sweden and the share price was adjusted                  accordingly. On the NASDAQ stock market the share split of the                  ADS took                  effect on May 10, 2007. |
|--|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | **9.A.5.** | Not                    applicable. |
|--|------------|------------------------------------|

|  | **9.A.6.** | Not                    applicable. |
|--|------------|------------------------------------|

|  | **9.A.7.** | Not                    applicable. |
|--|------------|------------------------------------|

|  | **9.B.** | **Plan                    of                    Distribution** |
|--|----------|----------------------------------------------------------------|

|  | **9.C** | **Markets** |
|--|---------|-------------|

|  | **9.D** | **Selling                    Shareholders** |
|--|---------|---------------------------------------------|

|  | **9.E** | **Dilution** |
|--|---------|--------------|

|  | **9.F** | **Expenses                    of the                    Issue** |
|--|---------|-----------------------------------------------------------------|

**ITEM          10.  ADDITIONAL INFORMATION**

|  | **10.A** | **Share                    capital** |
|--|----------|--------------------------------------|

----

|  | **10.B** | **Memorandum                    and articles of                    association** |
|--|----------|----------------------------------------------------------------------------------|

----

----

| (1)   | the                    acquisition results in the acquirer’s share of the number of votes for all                    shares in the company reaching or exceeding any of the thresholds                    10, 20,                    33.33, 50 and 66.67%, or |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | the                    transfer results in the transferor’s share of the number of votes for all                    shares in the company falling below any of the thresholds described                    in (1)                    above. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | **10.C** | **Material                    contracts** |
|--|----------|-------------------------------------------|

|  | **10.D** | **Exchange                    controls** |
|--|----------|------------------------------------------|

|  | **10.E** | **Taxation** |
|--|----------|--------------|

**General.          **

----

**Taxation          of Dividends.**

----

**Tax          on Sale, Exchange or Other Disposition.**

----

**Passive        Foreign Investment Company Status.**

**Swedish          Estate and Gift Taxes.**

**Swedish          Taxes on Property.**

**United          States Information Reporting Backup Withholding.**

**United          States State and Local Taxes.**

|  | **10.F** | **Dividends                    and paying                    agents** |
|--|----------|-----------------------------------------------------------------------|

----

|  | **10.G** | **Statement                    by                    experts** |
|--|----------|----------------------------------------------------------------|

|  | **10.H** | **Documents                    on                    display** |
|--|----------|----------------------------------------------------------------|

|  | **10.I** | **Subsidiary                    Information** |
|--|----------|-----------------------------------------------|

**ITEM          11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT          MARKET RISK**

**ITEM          12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY          SECURITIES**

----

**PART        II**

**ITEM          13.  DEFAULTS, DIVIDEND ARREARAGES AND          DELINQUENCIES**

**ITEM          14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY          HOLDERS AND USE OF PROCEEDS**

**ITEM          15.  CONTROLS AND          PROCEDURES**

**(a)   Disclosure          Controls and Procedures**

**(b)  Management’s          Annual Report on Internal Control over Financial Reporting**

----

**(c)          Report of the Registered Public Accounting Firm**

**(d)          Changes in Internal Control over Financial Reporting**

**ITEM          16.A    AUDIT COMMITTEE          FINANCIAL EXPERT**

**ITEM          16.B    CODE OF          ETHICS**

----

**ITEM        16.C    PRINCIPAL ACCOUNTANT        FEES AND SERVICES**

|                                      |   | 2004                                    |    |   | 2005   |       |    | 2006   |   |
|-------------------------------------------|--------|-----------------------------------------|---------|--------|--------|------------|---------|--------|--------|
|                                      |   | (In                    millions of SEK) |    |
| Audit                    Fees (1)         |   |                                    | 78      |   |   |       | 78      |   |   |   | 130 |   |
| Audit-related                    Fees (2) |   |                                    | 20      |   |   |       | 28      |   |   |   | 20 |   |
| Tax                    Fees (3)           |   |                                    | 16      |   |   |       | 17      |   |   |   | 14 |   |
| All                    Other Fees (4)     |   |                                    | 0       |   |   |       | 0       |   |   |   | 0 |   |
| Total                    Fees             |   | ** **                              | **114** |   |   | ** ** | **123** |   |   | ** ** | **164** |   |

**ITEM          16.D    EXEMPTION FROM THE          LISTING STANDARDS FOR AUDIT COMMITTEES**

----

**ITEM        16.E    ****PURCHASES        OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED        PURCHASERS**

----

**PART        III**

**ITEM          17.    FINANCIAL          STATEMENTS**

----

**ITEM        18.    FINANCIAL        STATEMENTS**

|                                                                                        | Page   |
|---------------------------------------------------------------------------------------------|--------|
| AB                      VOLVO AND SUBSIDIARIES:                                             |   |
| Index                      to Financial Statements                                          | F-1    |
| Report                      of Independent Registered Public Accounting Firm:               | F-2    |
| Consolidated                      Financial Statements:                                     |   |
| Consolidated                      Income Statements for the Years Ended                     |   |
| December                      31, 2004, 2005 and 2006                                       | F-4    |
| Consolidated                      Balance Sheets at December 31, 2004, 2005 and 2006        | F-5    |
| Changes                      in Consolidated Shareholders’ Equity for the years ended |   |
| December                      31, 2004, 2005 and 2006                                       | F-6    |
| Consolidated                      Cash Flow Statements for the Years Ended                  |   |
| December                      31, 2004, 2005 and 2006                                       | F-7    |
| Notes                      to the Consolidated Financial Statements                         | F-8    |

----

**INDEX        TO FINANCIAL STATEMENTS**

|                                                                                    | Page   |
|-----------------------------------------------------------------------------------------|--------|
| AB                  VOLVO AND SUBSIDIARIES:                                             |   |
| Report                  of Independent Registered Public Accounting Firm:               | F-2    |
| Consolidated                  Financial Statements:                                     |   |
| Consolidated                  Income Statements for the Years Ended                     |   |
| December                  31, 2004 ,2005 and 2006                                       | F-4    |
| Consolidated                  Balance Sheets at December 31, 2004, 2005 and 2006        | F-5    |
| Changes                  in Consolidated Shareholders’ equity for the Years Ended |   |
| December                  31, 2004, 2005 and 2006                                       | F-6    |
| Consolidated                  Cash Flow Statements for the Years Ended                  |   |
| December                  31, 2004, 2005 and 2006                                       | F-7    |
| Notes                  to the Consolidated Financial Statements                         | F-8    |

----

**Report      of Independent Registered Public Accounting Firm **

**To**
** **
**the        Board of Directors and Shareholders of AB Volvo**

** **
** **

*Internal        Control - Integrated Framework*
*Internal        Control - Integrated Framework*

----

----

**Consolidated        income statements**

| SEK M                                                       |   |   |                       | 2004   |   | 2005     |   | **2006** |     |
|------------------------------------------------------------------|--------|--------|----------------------------|--------|--------|----------|--------|----------|----------|
| **Net                  sales **                             |   |   | Note                  7    |   |   | 211,076  |   |     | 240,559  |   |   | **258,835** |   |
| Cost                  of sales                                   |   |   |                            |   |   | (164,170 | )      |     | (186,662 | ) |   | **(199,054** | **)** |
| **Gross                  income**                                |   |   |                            |   |   | 46,906   |   |     | 53,897   |   |   | **59,781** |   |
|                                                             |   |   |                            |   |   |          |   |     |          |   |   |  |   |
| Research                  and development expenses               |   |   | Note                  7    |   |   | (7,614   | )      |     | (7,557   | ) |   | **(8,354** | **)** |
| Selling                  expenses                                |   |   |                            |   |   | (19,369  | )      |     | (20,778  | ) |   | **(21,213** | **)** |
| Administrative                  expenses                         |   |   |                            |   |   | (5,483   | )      |     | (6,301   | ) |   | **(6,551** | **)** |
| Other                  operating income and expenses             |   |   | Note                  8    |   |   | (618     | )      |     | (588     | ) |   | **(3,466** | **)** |
| Income                  from investments in associated companies |   |   | Note                  7, 9 |   |   | 27       |   |     | (557     | ) |   | **61** |   |
| Income                  from other investments                   |   |   | Note                  10   |   |   | 830      |   |     | 37       |   |   | **141** |   |
| **Operating                  income**                            |   |   | Note                  7    |   |   | 14,679   |   |     | 18,153   |   |   | **20,399** |   |
|                                                             |   |   |                            |   |   |          |   |     |          |   |   |  |   |
| Interest                  income and similar credits             |   |   |                            |   |   | 821      |   |     | 654      |   |   | **666** |   |
| Interest                  expenses and similar charges           |   |   |                            |   |   | (1,254   | )      |     | (972     | ) |   | **(585** | **)** |
| Other                  financial income and expenses             |   |   | Note                  11   |   |   | (1,210   | )      |     | 181      |   |   | **(181** | **)** |
| **Income                  after financial items**                |   |   |                            |   |   | 13,036   |   |     | 18,016   |   |   | **20,299** |   |
|                                                             |   |   |                            |   |   |          |   |     |          |   |   |  |   |
| Income                  taxes                                    |   |   | Note                  12   |   |   | (3,129   | )      |     | (4,908   | ) |   | **(3,981** | **)** |
| **Income                  for the period**                       |   |   |                            |   |   | 9,907    |   |     | 13,108   |   |   | **16,318** |   |
|                                                             |   |   |                            |   |   |          |   |     |          |   |   |  |   |
| Attributable                  to:                                |   |   |                            |   |   |          |   |     |          |   |   |  |   |
| Equity                  holders of the parent company            |   |   |                            |   |   | 9,867    |   |     | 13,054   |   |   | **16,268** |   |
| Minority                  interests                              |   |   | Note                  13   |   |   | 40       |   |     | 54       |   |   | **50** |   |
|                                                             |   |   |                            |   |   | 9,907    |   |     | 13,108   |   |   | **16,318** |   |
|                                                             |   |   |                            |   |   |          |   |     |          |   |   |  |   |
| Basic                  earnings per share, SEK                   |   |   | Note                  23   |   |   | 23.58    |   |     | 32.22    |   |   | **40.20** |   |
| Diluted                  earnings per share, SEK                 |   |   | Note                  23   |   |   | 23.55    |   |     | 32.16    |   |   | **40.17** |   |

----

**Consolidated      balance sheets**

| SEK                  M                                                           |   |   |                     | December                  31, 2004 |   | December                  31, 2005 |   | **December                  31, 2006** |    |
|----------------------------------------------------------------------------------|--------|--------|--------------------------|------------------------------------|--------|------------------------------------|--------|----------------------------------------|---------|
| **Assets**                                                                       |   |   |                     |                               |   |                               |   |                                   |    |   |   |   |   |   |   |
| Non-current                  assets                                              |   |   |                     |                               |   |                               |   |                                   |    |   |   |   |   |   |   |
| Intangible                  assets                                               |   |   | Note                  14 |                               |   |                                    |   |                                   | 17,612  |   |   |  |   |   | 20,421 |   |   |  |   |   | **19,117** |   |
| Tangible                  assets                                                 |   |   | Note                  14 |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
|   Property,                  plant and equipment                       |   |   |                          |                               |   | 29,764                             |   |                                   |         |   |   | 33,997 |   |   |  |   |   | **33,269** |   |   |  |   |
|   Investment                  property                                 |   |   |                          |                               |   | 1,387                              |   |                                   |         |   |   | 1,071 |   |   |  |   |   | **1,110** |   |   |  |   |
|   Assets                  under operating leases                       |   |   |                          |                               |   | 19,534                             |   |                                   | 50,685  |   |   | 20,839 |   |   | 55,907 |   |   | **20,501** |   |   | **54,880** |   |
| Financial                  assets                                                |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
|   Associated                  companies                                |   |   | Note                  15 |                               |   | 913                                |   |                                   |         |   |   | 195 |   |   |  |   |   | **5,794** |   |   |  |   |
|   Other                  shares and participations                     |   |   | Note                  15 |                               |   | 1,090                              |   |                                   |         |   |   | 556 |   |   |  |   |   | **1,096** |   |   |  |   |
|   Long-term                  customer-financing receivables            |   |   | Note                  16 |                               |   | 25,187                             |   |                                   |         |   |   | 31,184 |   |   |  |   |   | **32,089** |   |   |  |   |
|   Deferred                  tax assets                                 |   |   | Note                  12 |                               |   | 5,078                              |   |                                   |         |   |   | 5,332 |   |   |  |   |   | **6,663** |   |   |  |   |
|   Other                  long-term receivables                         |   |   | Note                  17 |                               |   | 2,763                              |   |                                   | 35,031  |   |   | 3,127 |   |   | 40,394 |   |   | **4,400** |   |   | **50,042** |   |
| Total                  non-current assets                                        |   |   |                          |                               |   |                                    |   |                                   | 103,328 |   |   |  |   |   | 116,722 |   |   |  |   |   | **124,039** |   |
|                                                                             |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Current                  assets                                                  |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Inventories                                                                      |   |   | Note                  18 |                               |   |                                    |   |                                   | 28,598  |   |   |  |   |   | 33,937 |   |   |  |   |   | **34,211** |   |
| Short-term                  receivables                                          |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
|   Customer-financing                  receivables                      |   |   | Note                  19 |                               |   | 26,006                             |   |                                   |         |   |   | 33,282 |   |   |  |   |   | **32,653** |   |   |  |   |
|   Current                  tax assets                                  |   |   |                          |                               |   | 1,426                              |   |                                   |         |   |   | 855 |   |   |  |   |   | **1,221** |   |   |  |   |
|   Other                  receivables                                   |   |   | Note                  20 |                               |   | 29,864                             |   |                                   | 57,296  |   |   | 35,464 |   |   | 69,601 |   |   | **34,399** |   |   | **68,273** |   |
| Non-current                  assets held for sale                                |   |   | Note                  4  |                               |   |                                    |   |                                   | -       |   |   |  |   |   | - |   |   |  |   |   | **805** |   |
| Marketable                  securities                                           |   |   | Note                  21 |                               |   |                                    |   |                                   | 25,955  |   |   |  |   |   | 28,834 |   |   |  |   |   | **20,342** |   |
| Cash                  and cash equivalents                                       |   |   | Note                  22 |                               |   |                                    |   |                                   | 8,791   |   |   |  |   |   | 8,113 |   |   |  |   |   | **10,757** |   |
| Total                  current assets                                            |   |   |                          |                               |   |                                    |   |                                   | 120,640 |   |   |  |   |   | 140,485 |   |   |  |   |   | **134,388** |   |
| **Total                  assets**                                                |   |   |                          |                               |   |                                    |   |                                   | 223,968 |   |   |  |   |   | 257,207 |   |   |  |   |   | **258,427** |   |
|                                                                             |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| **Shareholders’                  equity and liabilities**                  |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Shareholders’                  equity                                      |   |   | Note                  23 |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
|   Share                  capital                                       |   |   |                          |                               |   | 2,649                              |   |                                   |         |   |   | 2,554 |   |   |  |   |   | **2,554** |   |   |  |   |
|   Additional                  contributed capital                      |   |   |                          |                               |   | -                                  |   |                                   |         |   |   | - |   |   |  |   |   | **-** |   |   |  |   |
|   Reserves                                                             |   |   |                          |                               |   | (71                                | )      |                                   |         |   |   | 2,924 |   |   |  |   |   | **1,664** |   |   |  |   |
|   Retained                  earnings                                   |   |   |                          |                               |   | 57,481                             |   |                                   |         |   |   | 59,968 |   |   |  |   |   | **66,418** |   |   |  |   |
|   Income                  for the period                               |   |   |                          |                               |   | 9,867                              |   |                                   |         |   |   | 13,054 |   |   |  |   |   | **16,268** |   |   |  |   |
| Equity                  attributable to the equity holders of the parent company |   |   |                          |                               |   | 69,926                             |   |                                   |         |   |   | 78,500 |   |   |  |   |   | **86,904** |   |   |  |   |
| Minority                  interests                                              |   |   |                          |                               |   | 229                                |   |                                   |         |   |   | 260 |   |   |  |   |   | **284** |   |   |  |   |
| Total                  shareholders’ equity                                |   |   |                          |                               |   |                                    |   |                                   | 70,155  |   |   |  |   |   | 78,760 |   |   |  |   |   | **87,188** |   |
|                                                                             |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
|                                                                             |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Non-current                  provisions                                          |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
|   Provisions                  for post-employment benefits             |   |   | Note                  24 |                               |   | 14,703                             |   |                                   |         |   |   | 11,986 |   |   |  |   |   | **8,692** |   |   |  |   |
|   Provisions                  for deferred taxes                       |   |   | Note                  12 |                               |   | 515                                |   |                                   |         |   |   | 2,265 |   |   |  |   |   | **4,422** |   |   |  |   |
|   Other                  non-current provisions                        |   |   | Note                  25 |                               |   | 7,296                              |   |                                   | 22,514  |   |   | 7,012 |   |   | 21,263 |   |   | **6,750** |   |   | **19,864** |   |
|                                                                             |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Non-current                  liabilities                                         |   |   | Note                  26 |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
|   Bond                  loans                                          |   |   |                          |                               |   | 27,612                             |   |                                   |         |   |   | 27,570 |   |   |  |   |   | **23,179** |   |   |  |   |
|   Other                  loans                                         |   |   |                          |                               |   | 12,799                             |   |                                   |         |   |   | 15,985 |   |   |  |   |   | **15,530** |   |   |  |   |
|   Other                  long-term liabilities                         |   |   |                          |                               |   | 4,653                              |   |                                   | 45,064  |   |   | 5,339 |   |   | 48,894 |   |   | **6,748** |   |   | **45,457** |   |
|                                                                             |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Current                  provisions                                              |   |   | Note                  25 |                               |   |                                    |   |                                   | 7,182   |   |   |  |   |   | 9,279 |   |   |  |   |   | **9,799** |   |
|                                                                             |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Current                  liabilities                                             |   |   | Note                  27 |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
|   Loans                                                                |   |   |                          |                               |   | 21,396                             |   |                                   |         |   |   | 31,330 |   |   |  |   |   | **28,247** |   |   |  |   |
|                    Liabilities associated with assets held for sale         |   |   | Note                  4  |                               |   | -                                  |   |                                   |         |   |   | - |   |   |  |   |   | **280** |   |   |  |   |
|   Trade                  payables                                      |   |   |                          |                               |   | 30,813                             |   |                                   |         |   |   | 35,693 |   |   |  |   |   | **38,080** |   |   |  |   |
|   Current                  tax liabilities                             |   |   |                          |                               |   | 1,753                              |   |                                   |         |   |   | 1,726 |   |   |  |   |   | **1,801** |   |   |  |   |
|   Other                  current liabilities                           |   |   |                          |                               |   | 25,091                             |   |                                   | 79,053  |   |   | 30,262 |   |   | 99,011 |   |   | **27,711** |   |   | **96,119** |   |
| **Total                  shareholders’ equity and liabilities**            |   |   |                          |                               |   |                                    |   |                                   | 223,968 |   |   |  |   |   | 257,207 |   |   |  |   |   | **258,427** |   |
|                                                                             |   |   |                          |                               |   |                                    |   |                                   |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Assets                  pledged                                                  |   |   | Note                  28 |                               |   |                                    |   |                                   | 3,046   |   |   |  |   |   | 3,255 |   |   |  |   |   | **1,960** |   |
| Contingent                  liabilities                                          |   |   | Note                  29 |                               |   |                                    |   |                                   | 9,189   |   |   |  |   |   | 7,850 |   |   |  |   |   | **7,726** |   |

----

| **Changes                  in consolidated Shareholders’ equity**                                                 |
|-------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                                                    |   |   |   | Shareholders’                  equity                  attributable to equity holders of the parent company |   |   |   |   |   |
| SEK                  M                                                                                                  |   |   |   | Share                  capital |   | Other                  reserves |   | Translation                  reserve |   | Retained                  earnings |   | **Total** |   | Minority                  interests |   | **Total****equity** |   |
| **Balance                  at January 1, 2004**                                                                         |   |   |  |   |   | **2,649** |   |   | **-** |   |   | **-** |   |   | **69,666** |   |   | **72,315** |   |   | **217** |   |   | **72,532** |   |
|                                                                                                                    |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Translation                  differences                                                                                |   |   |  |   |   | - |   |   | - |   |   | (151 | ) |   | - |   |   | (151 | ) |   | (6 | ) |   | (157 | ) |
| Translation                  differences on hedge instruments of net investments in foreign                  operations |   |   |  |   |   | - |   |   | - |   |   | 80 |   |   | - |   |   | 80 |   |   | - |   |   | 80 |   |
| *Net                  income recognised directly in equity*                                                             |   |   |  |   |   | *-* |   |   | *-* |   |   | *(71* | *)* |   | *-* |   |   | *(71* | *)* |   | *(6* | *)* |   | *(77* | *)* |
| Income                  for the period                                                                                  |   |   |  |   |   | - |   |   | - |   |   | - |   |   | 9,867 |   |   | 9,867 |   |   | 40 |   |   | 9,907 |   |
| *Total                  recognised income and expense for the period*                                                   |   |   |  |   |   | *-* |   |   | *-* |   |   | *(71* | *)* |   | *9,867* |   |   | *9,796* |   |   | *34* |   |   | *9,830* |   |
|                                                                                                                    |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Cash                  dividend                                                                                          |   |   |  |   |   | - |   |   | - |   |   | - |   |   | (3,356 | ) |   | (3,356 | ) |   | (9 | ) |   | (3,365 | ) |
| Distribution                  of shares in Ainax AB to shareholders                                                     |   |   |  |   |   | - |   |   | - |   |   | - |   |   | (6,310 | ) |   | (6,310 | ) |   | - |   |   | (6,310 | ) |
| Repurchase                  own shares                                                                                  |   |   | Note                  23 |   |   | - |   |   | - |   |   | - |   |   | (2,532 | ) |   | (2,532 | ) |   | - |   |   | (2,532 | ) |
| Share                  based payments                                                                                   |   |   | Note                  34 |   |   | - |   |   | - |   |   | - |   |   | 14 |   |   | 14 |   |   | - |   |   | 14 |   |
| Other                  changes                                                                                          |   |   |  |   |   | - |   |   | - |   |   | - |   |   | (1 | ) |   | (1 | ) |   | (13 | ) |   | (14 | ) |
| **Balance                  at December 31, 2004**                                                                       |   |   |  |   |   | **2,649** |   |   | **-** |   |   | **(71** | **)** |   | **67,348** |   |   | **69,926** |   |   | **229** |   |   | **70,155** |   |
|                                                                                                                    |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| IFRS                  Transition effect IAS 39                                                                          |   |   |  |   |   | - |   |   | 1,007 |   |   | - |   |   | (659 | ) |   | 348 |   |   | - |   |   | 348 |   |
| IAS                  39 Financial guarantees, IFRIC 4                                                                   |   |   |  |   |   | - |   |   | - |   |   | - |   |   | (10 | ) |   | (10 | ) |   | - |   |   | (10 | ) |
| **Balance                  at January 1, 2005**                                                                         |   |   |  |   |   | **2,649** |   |   | **1,007** |   |   | **(71** | **)** |   | **66,679** |   |   | **70,264** |   |   | **229** |   |   | **70,493** |   |
|                                                                                                                    |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Translation                  differences                                                                                |   |   |  |   |   | - |   |   | 24 |   |   | 3,543 |   |   | - |   |   | 3,567 |   |   | 24 |   |   | 3,591 |   |
| Translation                  differences on hedge instruments of net investments in foreign                  operations |   |   |  |   |   | - |   |   | - |   |   | (220 | ) |   | - |   |   | (220 | ) |   | - |   |   | (220 | ) |
| Available-for-sale                  investments:                                                                        |   |   | Note                  15, 23 |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
|                      Valuation gains/(losses)                                                            |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
|                      taken to equity                                                                     |   |   |  |   |   | - |   |   | 83 |   |   | - |   |   | - |   |   | 83 |   |   | - |   |   | 83 |   |
| Change                  in hedge reserve                                                                           |   |   |  |   |   | - |   |   | (1,442 | ) |   | - |   |   | - |   |   | (1,442 | ) |   | - |   |   | (1,442 | ) |
| *Net                  income recognised directly in equity*                                                             |   |   |  |   |   | *-* |   |   | *(1,335* | *)* |   | *3,323* |   |   | *-* |   |   | *1,988* |   |   | *24* |   |   | *2,012* |   |
| Income                  for the period                                                                                  |   |   |  |   |   | - |   |   | - |   |   | - |   |   | 13,054 |   |   | 13,054 |   |   | 54 |   |   | 13,108 |   |
| *Total                  recognised income and expense for the period*                                                   |   |   |  |   |   | *                   -* |  |   | *(1,335* | *)* |   | *3,323* |   |   | 13,054 |   |   | 15,042 |   |   | 78 |   |   | 15,120 |   |
|                                                                                                                    |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Cash                  dividend                                                                                          |   |   |  |   |   | - |   |   | - |   |   | - |   |   | (5,055 | ) |   | (5,055 | ) |   | (28 | ) |   | (5,083 | ) |
| Repurchase                  own shares                                                                                  |   |   | Note                  23 |   |   | - |   |   | - |   |   | - |   |   | (1,764 | ) |   | (1,764 | ) |   | - |   |   | (1,764 | ) |
| Share                  based payments                                                                                   |   |   | Note                  34 |   |   | - |   |   | - |   |   | - |   |   | 23 |   |   | 23 |   |   | - |   |   | 23 |   |
| Decrease                  of share capital                                                                              |   |   | Note                  23 |   |   | (95 | ) |   | - |   |   | - |   |   | 95 |   |   | - |   |   | - |   |   | - |   |
| Other                  changes                                                                                          |   |   |  |   |   | - |   |   | - |   |   | - |   |   | (10 | ) |   | (10 | ) |   | (19 | ) |   | (29 | ) |
| **Balance                  at December 31, 2005**                                                                       |   |   |  |   |   | **2,554** |   |   | **(328** | **)** |   | **3,252** |   |   | **73,022** |   |   | **78,500** |   |   | **260** |   |   | **78,760** |   |
|                                                                                                                    |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Translation                  differences                                                                                |   |   |  |   |   | - |   |   | - |   |   | (2,743 | ) |   | - |   |   | (2,743 | ) |   | (20 | ) |   | (2,763 | ) |
| Translation                  differences on hedge instruments of net investments in foreign                  operations |   |   |  |   |   | - |   |   | - |   |   | 149 |   |   | - |   |   | 149 |   |   | - |   |   | 149 |   |
| Available-for-sale                  investments:                                                                        |   |   | Note                  15, 23 |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
|                      Valuation gains/(losses)                                                            |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
|                      taken to equity                                                                     |   |   |  |   |   | - |   |   | 383 |   |   | - |   |   | - |   |   | 383 |   |   | - |   |   | 383 |   |
| Change                  in hedge reserve                                                                           |   |   | Note                  23 |   |   | - |   |   | 999 |   |   | - |   |   | - |   |   | 999 |   |   | - |   |   | 999 |   |
| *Net                  income recognised directly in equity*                                                             |   |   |  |   |   | *-* |   |   | *1,382* |   |   | *(2,594* | *)* |   | *0* |   |   | *(1,212* | *)* |   | *(20* | *)* |   | *(1,232* | *)* |
| Income                  for the period                                                                                  |   |   |  |   |   | - |   |   | - |   |   | - |   |   | 16,268 |   |   | 16,268 |   |   | 50 |   |   | 16,318 |   |
| *Total                  recognised income and expense for the period*                                                   |   |   |  |   |   | *-* |   |   | *1,382* |   |   | *(2,594* | *)* |   | *16,268* |   |   | *15,056* |   |   | *30* |   |   | *15,086* |   |
|                                                                                                                    |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Cash                  dividend                                                                                          |   |   |  |   |   | - |   |   | - |   |   | - |   |   | (6,775 | ) |   | (6,775 | ) |   | (7 | ) |   | (6,782 | ) |
| Share                  based payments                                                                                   |   |   | Note                  34 |   |   | - |   |   | - |   |   | - |   |   | 159 |   |   | 159 |   |   | - |   |   | 159 |   |
| Other                  changes in Nissan Diesel's equity                                                                |   |   |  |   |   | - |   |   | - |   |   | - |   |   | (65 | ) |   | (65 | ) |   | - |   |   | (65 | ) |
| Other                  changes                                                                                          |   |   |  |   |   | - |   |   | (67 | ) |   | 19 |   |   | 77 |   |   | 29 |   |   | 1 |   |   | 30 |   |
| **Balance                  at December 31, 2006**                                                                       |   |   |  |   |   | **2,554** |   |   | **987** |   |   | **677** |   |   | **82,686** |   |   | **86,904** |   |   | **284** |   |   | **87,188** |   |

----

**Consolidated      cash-flow statements**

| SEK                  M                                                                                       |   |   |                        |   |   | 2004   |   |   |    | 2005   |   | **2006** |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------|--------|--------|--------|--------|--------|---------|--------|--------|----------|--------|
| **Operating                  activities**                                                                    |   |   |                        |   |   |   |   |   |    |   |   |     |   |   |   |
| Operating                  income                                                                            |   |   |                             |   |   |        |   |   | 14,679  |   |   |          |   |   | 18,153 |   |   |  |   |   | **20,399** |   |
| Depreciation                  and amortization                                                               |   |   | Note                  14    |   |   |        |   |   | 10,003  |   |   |          |   |   | 9,894 |   |   |  |   |   | **12,384** |   |
| Other                  items not affecting cash                                                              |   |   | Note                  30    |   |   |        |   |   | (30     | )      |   |          |   |   | 413 |   |   |  |   |   | **652** |   |
| Changes                  in working capital:                                                                 |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
|   (Increase)/decrease                  in receivables                                              |   |   |                             |   |   |        |   |   | (4,017  | )      |   |          |   |   | (1,253 | ) |   |  |   |   | **(475** | **)** |
|   (Increase)/decrease                  in                                                          |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
|   customer                  finance receivables                                                    |   |   | Note                  30    |   |   |        |   |   | (7,382  | )      |   |          |   |   | (7,773 | ) |   |  |   |   | **(5,188** | **)** |
|                    (Increase)/decrease in inventories                                                   |   |   |                             |   |   |        |   |   | (2,243  | )      |   |          |   |   | (2,438 | ) |   |  |   |   | **(3,111** | **)** |
|                    Increase/(decrease) in                                                               |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
|                    liabilities and provisions                                                           |   |   |                             |   |   |        |   |   | 4,797   |   |   |          |   |   | (983 | ) |   |  |   |   | **1,106** |   |
| Interest                  and similar items received                                                         |   |   |                             |   |   |        |   |   | 1,047   |   |   |          |   |   | 2,430 |   |   |  |   |   | **737** |   |
| Interest                  and similar items paid                                                             |   |   |                             |   |   |        |   |   | (335    | )      |   |          |   |   | (2,341 | ) |   |  |   |   | **(585** | **)** |
| Other                  financial items                                                                       |   |   |                             |   |   |        |   |   | (25     | )      |   |          |   |   | (70 | ) |   |  |   |   | **(29** | **)** |
| Income                  taxes paid                                                                           |   |   |                             |   |   |        |   |   | (1,194  | )      |   |          |   |   | (2,023 | ) |   |  |   |   | **(4,388** | **)** |
| **Cash                  flow from operating activities**                                                     |   |   |                             |   |   |        |   |   | 15,300  |   |   |          |   |   | 14,009 |   |   |  |   |   | **21,502** |   |
|                                                                                                         |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
| **Investing                  activities**                                                                    |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
| Investments                  in fixed assets                                                                 |   |   |                             |   |   | (7,405 | )      |   |         |   |   | (10,271  | )      |   |  |   |   | **(9,969** | **)** |   |  |   |
| Investments                  in leasing assets                                                               |   |   |                             |   |   | (4,360 | )      |   |         |   |   | (4,549   | )      |   |  |   |   | **(4,611** | **)** |   |  |   |
| Disposals                  of fixed assets and leasing assets                                                |   |   |                             |   |   | 2,444  |   |   |         |   |   | 2,646    |   |   |  |   |   | **3,240** |   |   |  |   |
| Shares                  and participations, net                                                              |   |   | Note                  30    |   |   | 15,064 |   |   |         |   |   | 336      |   |   |  |   |   | **(5,817** | **)** |   |  |   |
| Acquired                  and divested subsidiaries and other business units, net                            |   |   | Note                  4, 30 |   |   | (141   | )      |   |         |   |   | 650      |   |   |  |   |   | **510** |   |   |  |   |
| Interest-bearing                  receivables including marketable securities                                |   |   |                             |   |   | (6,413 | )      |   | (811    | )      |   | (1,359   | )      |   | (12,547 | ) |   | **7,650** |   |   | **(8,997** | **)** |
| **Cash                  flow after net investments**                                                         |   |   |                             |   |   |        |   |   | 14,489  |   |   |          |   |   | 1,462 |   |   |  |   |   | **12,505** |   |
|                                                                                                         |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
| **Financing                  activities**                                                                    |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
| Increase/(decrease)                  in bond loans and other loans                                           |   |   | Note                  30    |   |   | (8,840 | )      |   |         |   |   | 3,564    |   |   |  |   |   | **(2,609** | **)** |   |  |   |
| Cash                  dividend to AB Volvo shareholders'                                                     |   |   |                             |   |   | (3,356 | )      |   |         |   |   | (5,055   | )      |   |  |   |   | **(6,775** | **)** |   |  |   |
| Repurchase                  of own shares                                                                    |   |   |                             |   |   | (2,532 | )      |   |         |   |   | (1,764   | )      |   |  |   |   | - |   |   |  |   |
| Dividends                  to minority shareholders                                                          |   |   |                             |   |   | (9     | )      |   |         |   |   | (28      | )      |   |  |   |   | **(7** | **)** |   |  |   |
| Other                                                                                                        |   |   |                             |   |   | 38     |   |   | (14,699 | )      |   | 15       |   |   | (3,268 | ) |   | **35** |   |   | **(9,356** | **)** |
| **Change                  in cash and cash equivalents, excluding translation                  differences** |   |   |                             |   |   |        |   |   | (210    | )      |   |          |   |   | (1,806 | ) |   |  |   |   | **3,149** |   |
|                                                                                                         |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
| Translation                  difference on cash and cash equivalents                                         |   |   |                             |   |   |        |   |   | (205    | )      |   |          |   |   | 1,128 |   |   |  |   |   | **(505** | **)** |
| **Change                  in cash and cash equivalents**                                                     |   |   |                             |   |   |        |   |   | (415    | )      |   |          |   |   | (678 | ) |   |  |   |   | **2,644** |   |
|                                                                                                         |   |   |                             |   |   |        |   |   |         |   |   |          |   |   |  |   |   |  |   |   |  |   |
| **Cash                  and cash equivalents, January 1**                                                    |   |   | Note                  22    |   |   |        |   |   | 9,206   |   |   |          |   |   | 8,791 |   |   |  |   |   | **8,113** |   |
| **Cash                  and cash equivalents, December 31**                                                  |   |   | Note                  22    |   |   |        |   |   | 8,791   |   |   |          |   |   | 8,113 |   |   |  |   |   | **10,757** |   |

----

**Notes        to consolidated financial statements**

**Note        1 Accounting principles**

**Changes        of accounting principles **

***IAS        1 supplement - Presentation of Financial statements:***

***Information        about capital***

***IFRS        7 Financial Instruments: Disclosure***

***IFRS        8 Operating segments****

***IFRIC        7 Applying the Restatement Approach under IAS 29***

***Financial        reporting in Hyperinflationary Economies***

***IFRIC        8 Scope of IFRS 2***

***IFRIC        9 Reassessment of Embedded Derivatives***

----

**Notes        to consolidated financial statements**

| **Exchange                  rates** |   |     |   | Average                  rate |   | Year-end                  rate |   |
|-------------------------------------|--------|----------|--------|-------------------------------|--------|--------------------------------|--------|
| Country                             |   | Currency |   | 2004                          |   | 2005                           |   | 2006 |   | 2004 |   | 2005 |   | 2006 |   |
| Brasil                              |   |     | BRL    |                          |   | 2.5388                         |   |   | 3.0947 |   |   | 3.3927 |   |   | 2.5125 |   |   | 3.4215 |   |   | 3.2190 |   |
| Canada                              |   |     | CAD    |                          |   | 5.6495                         |   |   | 6.1864 |   |   | 6.5096 |   |   | 5.4635 |   |   | 6.8435 |   |   | 5.9235 |   |
| Denmark                             |   |     | DKK    |                          |   | 1.2285                         |   |   | 1.2471 |   |   | 1.2420 |   |   | 1.2126 |   |   | 1.2651 |   |   | 1.2146 |   |
| Euro                                |   |     | EUR    |                          |   | 9.1408                         |   |   | 9.2943 |   |   | 9.2649 |   |   | 9.0163 |   |   | 9.4393 |   |   | 9.0593 |   |
| Great                  Britain      |   |     | GBP    |                          |   | 13.4515                        |   |   | 13.5849 |   |   | 13.5822 |   |   | 12.7163 |   |   | 13.7388 |   |   | 13.4938 |   |
| Japan                               |   |     | JPY    |                          |   | 0.0680                         |   |   | 0.0679 |   |   | 0.0635 |   |   | 0.0638 |   |   | 0.0679 |   |   | 0.0579 |   |
| Norway                              |   |     | NOK    |                          |   | 1.0926                         |   |   | 1.1611 |   |   | 1.1516 |   |   | 1.0890 |   |   | 1.1770 |   |   | 1.0955 |   |
| South                  Korea        |   |     | KRW    |                          |   | 0.0065                         |   |   | 0.0073 |   |   | 0.0077 |   |   | 0.0064 |   |   | 0.0079 |   |   | 0.0074 |   |
| United                  States      |   |     | USD    |                          |   | 7.3655                         |   |   | 7.4791 |   |   | 7.3791 |   |   | 6.6138 |   |   | 7.9538 |   |   | 6.8738 |   |

***IFRIC        10 Interim Financial Reporting and Impairment***

***IFRIC        11 IFRS 2 Group and Treasury Share Transactions***

***IFRIC        12 Service Concession Arrangements***

**Consolidated        financial statements**

**Translation        to Swedish kronor when **
**consolidating        companies using foreign currencies **

----

**Receivables        and liabilities in foreign currency**

**Net        sales and revenue recognition**

**Leasing        - Volvo as the lessor**

**Investments        in other companies**

**Reporting        of financial assets and liabilities**

**Receivables**

**Hedge        accounting **

----

**Notes        to consolidated financial statements**

**Research        and development expenses **

**Depreciation,        amortization and impairments of tangible **
**and        intangible non-current assets **

| **Depreciation                  periods**          |   |   |                            |
|----------------------------------------------------|--------|--------|---------------------------------|
| Capitalized                  type-specific tools   |   |   | 2                  to 8 years   |   |
| Operational                  leases                |   |   | 3                  to 5 years   |   |
| Machinery                                          |   |   | 5                  to 20 years  |   |
| Buildings                  and Investment property |   |   | 25                  to 50 years |   |
| Land                  improvements                 |   |   | 20                  years       |   |
| Product                  and software development  |   |   | 3                  to 8 years   |   |

**Leasing        - Volvo as the lessee**

**Non-current        assets held for sale and discontinued operations **

**Inventories        **

**Share-based        payments **

----

**Pensions        and similar obligations (Postemployment benefits)**

**Provisions        for residual value risks **

**Warranty        expenses **

**Restructuring        costs **

**Deferred        taxes, allocations and untaxed reserves **

**Cash-flow        statement**

**Earnings        per share**

----

**Notes        to consolidated financial statements**

**Note        2 Key sources of estimation uncertainty **

**Key        sources of estimation uncertainty **

**Impairment        of goodwill, other intangible assets **
**and        other non-current assets**

**Residual        value risks**

**Revenue        recognition **

**Deferred        taxes**

**Inventory        obsolescence**

----

**Credit        loss reserves**

**Pensions        and other post-employment benefits**

**Product        warranty costs**

**Legal        proceedings**

**Note        3 Transition to IFRS **

**Reporting        in accordance with IFRS as from 2005 **

**Restatements        and transition effects **

----

**Notes        to consolidated financial statements**

**Capitalization        and amortization of development costs **

**Minority        interests **

**Non-amortization        of intangible assets **
**with        indefinite useful lives**

**Employee        benefits**

**Investments        in other companies**

**Fair        value of derivative instruments **

**Derecognition        of financial assets **

**Consolidation        of temporary investments **

----

**IFRS        2 Share-based Payments **

**IFRS        5 Non-Current Asset Held for Sale **
**and        Discontinued Operations **

**Other        transition rules according to IFRS 1 **
**and        IFRS standards **

**Definition        of cash and cash equivalents in  **
**presentation        of cash-flow statements **

**Classification        of leasing contracts in segment reporting **
**of        Financial Services **

| **Cash-flow                  statement**                       |   | According                  to previous presentation |     | Presentation                  according to IFRS |   |
|----------------------------------------------------------------|--------|-----------------------------------------------------|----------|-------------------------------------------------|--------|
| SEK                  billion                                   |   | 2004                                                |     | 2005                                            |   | 2004 |   | 2005 |   |
| **Operating                  activities**                      |   |                                                |     |                                            |   |   |   |   |   |
| Operating                  income                              |   |                                                | 14.7     |                                            |   | 18.2 |   |   | 14.7 |   |   | 18.2 |   |
| Depreciation                  and amortization                 |   |                                                | 10.0     |                                            |   | 9.9 |   |   | 10.0 |   |   | 9.9 |   |
| Other                  non-cash items                          |   |                                                | (0.1     | )                                               |   | 0.4 |   |   | (0.1 | ) |   | 0.4 |   |
| Change                  in working capital                     |   |                                                | (1.4     | )                                               |   | (4.7 | ) |   | (1.4 | ) |   | (4.7 | ) |
| Customer                  Finance receivables, net             |   |                                                |          |                                            |   |  |   |   | (7.4 | ) |   | (7.8 | ) |
| Financial                  items and income taxes              |   |                                                | (0.5     | )                                               |   | (2.0 | ) |   | (0.5 | ) |   | (2.0 | ) |
| **Cash                  flow from operating activities**       |   |                                                | **22.7** |                                            |   | **21.8** |   |   | **15.3** |   |   | **14.0** |   |
|                                                           |   |                                                |          |                                            |   |  |   |   |  |   |   |  |   |
| **Investing                  activities**                      |   |                                                |          |                                            |   |  |   |   |  |   |   |  |   |
| Investments                  in fixed assets                   |   |                                                | (7.4     | )                                               |   | (10.3 | ) |   | (7.4 | ) |   | (10.3 | ) |
| Investment                  in leasing vehicles                |   |                                                | (4.4     | )                                               |   | (4.5 | ) |   | (4.4 | ) |   | (4.5 | ) |
| Disposal                  of fixed assets and leasing vehicles |   |                                                | 2.4      |                                            |   | 2.6 |   |   | 2.4 |   |   | 2.6 |   |
| Customer                  Finance receivables, net             |   |                                                | (7.4     | )                                               |   | (7.8 | ) |   |  |   |   |  |   |
| **Operating                  cash flow**                       |   |                                                | **5.9**  |                                            |   | **1.8** |   |   | **5.9** |   |   | **1.8** |   |

----

**Notes        to consolidated financial statements**

**Financial        position December 31, 2004**

| **Consolidated                  balance sheets**          |        | Volvo                  Group excl    |        |                                |   |                                  |   |                    |        |        |   |
|-----------------------------------------------------------|--------|--------------------------------------|-------------|-------------------------------------|--------|---------------------------------------|--------|-------------------------|-------------|-------------|--------|
| December                  31, 2004                        |   | Financial                  Services1 |        | Financial                  Services |   | Volvo                    Group total2 |   |
|                                                      |   | Dec                  31              |        | IFRS                                |   | Dec                  31               |   | Dec                  31 |        | IFRS        |   | Dec                  31 |   | Dec                  31 |   | IFRS |   | Dec                  31 |   |
| SEK                  M                                    |   | 2004                                 |        | adjustments                         |   | 2004                                  |   | 2004                    |        | adjustments |   | 2004 |   | 2004 |   | adjustments |   | 2004 |   |
| **Assets**                                                |   |                                 |        |                                |   |                                  |   |                    |        |        |   |   |   |   |   |   |   |   |   |
| Intangible                  assets                        |   |                                 | 16,564      |                                |   | 1,006                                 |   |                    | 17,570      |        |   | 42 |   |   |  |   |   | 42 |   |   | 16,606 |   |   | 1,006 |   |   | 17,612 |   |
| Property,                  plant and equipment            |   |                                 | 27,260      |                                |   |                                       |   |                    | 27,260      |        |   | 3,891 |   |   |  |   |   | 3,891 |   |   | 31,151 |   |   |  |   |   | 31,151 |   |
| Assets                  under operating leases            |   |                                 | 8,477       |                                |   |                                       |   |                    | 8,477       |        |   | 12,817 |   |   | (12,044 | ) |   | 773 |   |   | 19,534 |   |   |  |   |   | 19,534 |   |
| Shares                  and participations                |   |                                 | 10,116      |                                |   |                                       |   |                    | 10,116      |        |   | 193 |   |   |  |   |   | 193 |   |   | 2,003 |   |   |  |   |   | 2,003 |   |
| Long-term                  customer finance receivables   |   |                                 | 147         |                                |   |                                       |   |                    | 147         |        |   | 25,200 |   |   | 8,687 |   |   | 33,887 |   |   | 25,187 |   |   |  |   |   | 25,187 |   |
| Long-term                  interest-bearing receivables   |   |                                 | 1,797       |                                |   |                                       |   |                    | 1,797       |        |   | 5 |   |   |  |   |   | 5 |   |   | 1,741 |   |   |  |   |   | 1,741 |   |
| Other                  long-term receivables              |   |                                 | 6,426       |                                |   | 66                                    |   |                    | 6,492       |        |   | 212 |   |   |  |   |   | 212 |   |   | 6,034 |   |   | 66 |   |   | 6,100 |   |
| Inventories                                               |   |                                 | 28,291      |                                |   |                                       |   |                    | 28,291      |        |   | 307 |   |   |  |   |   | 307 |   |   | 28,598 |   |   |  |   |   | 28,598 |   |
| Short-term                  customer finance receivables  |   |                                 | 83          |                                |   |                                       |   |                    | 83          |        |   | 26,207 |   |   | 3,324 |   |   | 29,531 |   |   | 26,006 |   |   |  |   |   | 26,006 |   |
| Short-term                  interest bearing receivables  |   |                                 | 10,330      |                                |   |                                       |   |                    | 10,330      |        |   | 0 |   |   |  |   |   | 0 |   |   | 1,643 |   |   |  |   |   | 1,643 |   |
| Other                  short-term receivables             |   |                                 | 30,043      |                                |   |                                       |   |                    | 30,043      |        |   | 1,628 |   |   |  |   |   | 1,628 |   |   | 29,647 |   |   |  |   |   | 29,647 |   |
| Marketable                  securities                    |   |                                 | 25,839      |                                |   |                                       |   |                    | 25,839      |        |   | 116 |   |   |  |   |   | 116 |   |   | 25,955 |   |   |  |   |   | 25,955 |   |
| Cash                  and cash equivalent                 |   |                                 | 8,789       |                                |   |                                       |   |                    | 8,789       |        |   | 914 |   |   |  |   |   | 914 |   |   | 8,791 |   |   |  |   |   | 8,791 |   |
| **Total                  assets**                         |   |                                 | **174,162** |                                |   | **1,072**                             |   |                    | **175,234** |        |   | **71,532** |   |   | **(33** | **)** |   | **71,499** |   |   | **222,896** |   |   | **1,072** |   |   | **223,968** |   |
|                                                      |   |                                 |             |                                |   |                                       |   |                    |             |        |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| **Shareholders'                  equity and liabilities** |   |                                 |             |                                |   |                                       |   |                    |             |        |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Shareholders'                  equity                     |   |                                 | 69,409      |                                |   | 746                                   |   |                    | 70,155      |        |   | 8,306 |   |   |  |   |   | 8,306 |   |   | 69,409 |   |   | 746 |   |   | 70,155 |   |
| Minority                  interests                       |   |                                 | 229         |                                |   | (229                                  | )      |                    | -           |        |   | 0 |   |   |  |   |   | - |   |   | 229 |   |   | (229 | ) |   | - |   |
| Provisions                  for post-employment benefits  |   |                                 | 14,129      |                                |   | 548                                   |   |                    | 14,677      |        |   | 26 |   |   |  |   |   | 26 |   |   | 14,155 |   |   | 548 |   |   | 14,703 |   |
| Other                  provisions                         |   |                                 | 14,020      |                                |   | 95                                    |   |                    | 14,115      |        |   | 878 |   |   | (33 | ) |   | 845 |   |   | 14,898 |   |   | 95 |   |   | 14,993 |   |
| Loans                                                     |   |                                 | 13,968      |                                |   |                                       |   |                    | 13,968      |        |   | 57,860 |   |   |  |   |   | 57,860 |   |   | 61,807 |   |   |  |   |   | 61,807 |   |
| Other                  liabilities                        |   |                                 | 62,407      |                                |   | (88                                   | )      |                    | 62,319      |        |   | 4,462 |   |   |  |   |   | 4,462 |   |   | 62,398 |   |   | (88 | ) |   | 62,310 |   |
| **Shareholders'                  equity and liabilities** |   |                                 | **174,162** |                                |   | **1,072**                             |   |                    | **175,234** |        |   | **71,532** |   |   | **(33** | **)** |   | **71,499** |   |   | **222,896** |   |   | **1,072** |   |   | **223,968** |   |

----

**Financial        position January 1, 2005 **

| Consolidated                  balance sheets              |   | Volvo                  Group excl    |        |                                |   |                                  |   |                    |        |                    |   |
|-----------------------------------------------------------|--------|--------------------------------------|-------------|-------------------------------------|--------|---------------------------------------|--------|-------------------------|-------------|-------------------------|--------|
| January                  1, 2005                          |   | Financial                  Services1 |        | Financial                  Services |   | Volvo                    Group total2 |   |
|                                                      |   | Dec                  31              |        | IAS                  39             |   | Jan                  1                |   | Dec                  31 |        | IAS                  39 |   | Jan                  1 |   | Dec                  31 |   | IAS                  39 |   | Jan                  1 |   |
| SEK                  M                                    |   | 2004                                 |        | adjustments                         |   | 2005                                  |   | 2004                    |        | adjustments             |   | 2005 |   | 2004 |   | adjustments |   | 2005 |   |
| **Assets**                                                |   |                                 |        |                                |   |                                  |   |                    |        |                    |   |   |   |   |   |   |   |   |   |
| Intangible                  assets                        |   |                                 | 17,570      |                                |   |                                       |   |                    | 17,570      |                    |   | 42 |   |   |  |   |   | 42 |   |   | 17,612 |   |   |  |   |   | 17,612 |   |
| Property,                  plant and equipment            |   |                                 | 27,260      |                                |   |                                       |   |                    | 27,260      |                    |   | 3,891 |   |   |  |   |   | 3,891 |   |   | 31,151 |   |   |  |   |   | 31,151 |   |
| Assets                  under operating leases            |   |                                 | 8,477       |                                |   |                                       |   |                    | 8,477       |                    |   | 773 |   |   |  |   |   | 773 |   |   | 19,534 |   |   |  |   |   | 19,534 |   |
| Shares                  and participations                |   |                                 | 10,116      |                                |   | (494                                  | )      |                    | 9,622       |                    |   | 193 |   |   |  |   |   | 193 |   |   | 2,003 |   |   | (494 | ) |   | 1,509 |   |
| Long-term                  customer finance receivables   |   |                                 | 147         |                                |   | 424                                   |   |                    | 571         |                    |   | 33,887 |   |   | 611 |   |   | 34,498 |   |   | 25,187 |   |   | 1,035 |   |   | 26,222 |   |
| Long-term                  interest-bearing receivables   |   |                                 | 1,797       |                                |   |                                       |   |                    | 1,797       |                    |   | 5 |   |   |  |   |   | 5 |   |   | 1,741 |   |   |  |   |   | 1,741 |   |
| Other                  long-term receivables              |   |                                 | 6,492       |                                |   | 985                                   |   |                    | 7,477       |                    |   | 212 |   |   |  |   |   | 212 |   |   | 6,100 |   |   | 988 |   |   | 7,088 |   |
| Inventories                                               |   |                                 | 28,291      |                                |   |                                       |   |                    | 28,291      |                    |   | 307 |   |   |  |   |   | 307 |   |   | 28,598 |   |   |  |   |   | 28,598 |   |
| Short-term                  customer finance receivables  |   |                                 | 83          |                                |   | 430                                   |   |                    | 513         |                    |   | 29,531 |   |   | 298 |   |   | 29,829 |   |   | 26,006 |   |   | 727 |   |   | 26,733 |   |
| Short-term                  interest bearing receivables  |   |                                 | 10,330      |                                |   |                                       |   |                    | 10,330      |                    |   | 0 |   |   |  |   |   | 0 |   |   | 1,643 |   |   |  |   |   | 1,643 |   |
| Other                  short-term receivables             |   |                                 | 30,043      |                                |   | 4,040                                 |   |                    | 34,083      |                    |   | 1,628 |   |   |  |   |   | 1,628 |   |   | 29,647 |   |   | 1,690 |   |   | 31,337 |   |
| Marketable                  securities                    |   |                                 | 25,839      |                                |   |                                       |   |                    | 25,839      |                    |   | 116 |   |   |  |   |   | 116 |   |   | 25,955 |   |   |  |   |   | 25,955 |   |
| Cash                  and cash equivalent                 |   |                                 | 8,789       |                                |   |                                       |   |                    | 8,789       |                    |   | 914 |   |   |  |   |   | 914 |   |   | 8,791 |   |   |  |   |   | 8,791 |   |
| **Total                  assets**                         |   |                                 | **175,234** |                                |   | **5,385**                             |   |                    | **180,619** |                    |   | **71,499** |   |   | **909** |   |   | **72,408** |   |   | **223,968** |   |   | **3,946** |   |   | **227,914** |   |
|                                                      |   |                                 |             |                                |   |                                       |   |                    |             |                    |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| **Shareholders'                  equity and liabilities** |   |                                 |             |                                |   |                                       |   |                    |             |                    |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Shareholders'                  equity                     |   |                                 | 70,155      |                                |   | 348                                   |   |                    | 70,503      |                    |   | 8,306 |   |   |  |   |   | 8,306 |   |   | 70,155 |   |   | 348 |   |   | 70,503 |   |
| Minority                  interests                       |   |                                 | -           |                                |   |                                       |   |                    | -           |                    |   | - |   |   |  |   |   | - |   |   | - |   |   |  |   |   | - |   |
| Provisions                  for post-employment benefits  |   |                                 | 14,677      |                                |   |                                       |   |                    | 14,677      |                    |   | 26 |   |   |  |   |   | 26 |   |   | 14,703 |   |   |  |   |   | 14,703 |   |
| Other                  provisions                         |   |                                 | 14,115      |                                |   | 439                                   |   |                    | 14,554      |                    |   | 845 |   |   | (6 | ) |   | 839 |   |   | 14,993 |   |   | 432 |   |   | 15,425 |   |
| Loans                                                     |   |                                 | 13,968      |                                |   | 3,340                                 |   |                    | 17,308      |                    |   | 57,860 |   |   | 915 |   |   | 58,775 |   |   | 61,807 |   |   | 1,908 |   |   | 63,715 |   |
| Other                  liabilities                        |   |                                 | 62,319      |                                |   | 1,258                                 |   |                    | 63,577      |                    |   | 4,462 |   |   |  |   |   | 4,462 |   |   | 62,310 |   |   | 1,258 |   |   | 63,568 |   |
| **Shareholders'                  equity and liabilities** |   |                                 | **175,234** |                                |   | **5,385**                             |   |                    | **180,619** |                    |   | **71,499** |   |   | **909** |   |   | **72,408** |   |   | **223,968** |   |   | **3,946** |   |   | **227,914** |   |

----

**Notes        to consolidated financial statements**

| **Consolidated                  income statements IFRS comparison 2004** |   |
|--------------------------------------------------------------------------|--------|
| VFS                  reported according to the equity method             |   |   |   |   |   |
| SEK                  M unless otherwise specified                        |   | **IFRS** |   | **Sw                  GAAP** |   |
| Net                  sales                                               |   |   | **202,171** |   |   | **201,496** |   |
| Cost                  of sales                                           |   |   | (158,453 | ) |   | (158,231 | ) |
| **Gross                  income**                                        |   |   | **43,718** |   |   | **43,265** |   |
|                                                                     |   |   |  |   |   |  |   |
| Research                  and development expenses                       |   |   | (7,614 | ) |   | (7,233 | ) |
| Selling                  expenses                                        |   |   | (18,317 | ) |   | (18,048 | ) |
| Administrative                  expenses                                 |   |   | (5,310 | ) |   | (5,321 | ) |
| Other                  operating income and expenses                     |   |   | 7 |   |   | (658 | ) |
| Income                  from Financial Services                          |   |   | 1,365 |   |   | 1,365 |   |
| Income                  from investments in associated companies         |   |   | 2 |   |   | 2 |   |
| Income                  from other investments                           |   |   | 828 |   |   | 828 |   |
| **Operating                  income**                                    |   |   | **14,679** |   |   | **14,200** |   |
|                                                                     |   |   |  |   |   |  |   |
| Interest                  income and similar credits                     |   |   | 993 |   |   | 993 |   |
| Interest                  expenses and similar charges                   |   |   | (1,426 | ) |   | (1,404 | ) |
| Other                  financial income and expenses                     |   |   | (1,210 | ) |   | (1,210 | ) |
| **Income                  after financial items**                        |   |   | **13,036** |   |   | **12,579** |   |
|                                                                     |   |   |  |   |   |  |   |
| Minority                  interest                                       |   |   | - |   |   | (40 | ) |
| Income                  taxes                                            |   |   | (3,129 | ) |   | (3,184 | ) |
| **Income                  for the period**                               |   |   | **9,907** |   |   | **9,355** |   |
| *                  Attributable to:                                      |   |   |  |   |   |  |   |
| Equity                  holders of the parent company                    |   |   | 9,867 |   |   | - |   |
| Minority                  interest                                       |   |   | 40 |   |   | - |   |
|                                                                     |   |   | **9,907** |   |   | **-** |   |
|                                                                     |   |   |  |   |   |  |   |
| **Depreciation                     and amortization included above**     |   |   |  |   |   |  |   |
| **Depreciation**                                                         |   |   |  |   |   |  |   |
| Industrial                  and Commercial                               |   |   | (5,540 | ) |   | (5,540 | ) |
| Financial                  Services                                      |   |   | (3,066 | ) |   | (3,066 | ) |
| **Total                  Depreciation**                                  |   |   | **(8,606** | **)** |   | **(8,606** | **)** |
|                                                                     |   |   |  |   |   |  |   |
| **Amortization**                                                         |   |   |  |   |   |  |   |
| Industrial                  and Commercial                               |   |   | (1,333 | ) |   | (1,635 | ) |
| Financial                  Services                                      |   |   | (63 | ) |   | (63 | ) |
| **Total                  Amortization**                                  |   |   | **(1,396** | **)** |   | **(1,698** | **)** |
|                                                                     |   |   |  |   |   |  |   |
| Basic                  earnings per share, SEK                      |   |   | 23.58 |   |   | 22.35 |   |
| Diluted                  earnings per share, SEK                         |   |   | 23.55 |   |   | 22.33 |   |
| Average                  number of shares, million                       |   |   | 418.5 |   |   | 418.5 |   |

**Key        operating ratios**

| %                  of                  net sales   |   | **IFRS** |   | **Sw                  GAAP** |   |
|----------------------------------------------------|--------|----------|--------|------------------------------|--------|
| Gross                  margin                      |   |     | 21.6   |                         |   | 21.5 |   |
| Research                  and development expenses |   |     | 3.8    |                         |   | 3.6 |   |
| Selling                  expenses                  |   |     | 9.1    |                         |   | 9.0 |   |
| Administrative                  expenses           |   |     | 2.6    |                         |   | 2.6 |   |
| Operating                  margin                  |   |     | 7.3    |                         |   | 7.0 |   |

**Net        sales**

| SEK                  M                   |   | **IFRS** |        | **Sw                  GAAP** |   |
|------------------------------------------|--------|----------|-------------|------------------------------|--------|
| Trucks                                   |   |     | 136,879     |                         |   | 136,879 |   |
| Buses                                    |   |     | 12,722      |                         |   | 12,722 |   |
| Construction                  Equipment1 |   |     | 29,360      |                         |   | 28,685 |   |
| Volvo                  Penta             |   |     | 9,057       |                         |   | 9,057 |   |
| Volvo                  Aero              |   |     | 6,925       |                         |   | 6,925 |   |
| Other                                    |   |     | 7,228       |                         |   | 7,228 |   |
| **Net                  sales**           |   |     | **202,171** |                         |   | **201,496** |   |

**Operating        income **

| SEK                  M                       |   | **IFRS** |       | **Sw                  GAAP** |   |
|----------------------------------------------|--------|----------|------------|------------------------------|--------|
| Trucks                                       |   |     | 8,992      |                         |   | 8,989 |   |
| Buses                                        |   |     | 253        |                         |   | 185 |   |
| Construction                  Equipment      |   |     | 1,898      |                         |   | 1,572 |   |
| Volvo                  Penta                 |   |     | 940        |                         |   | 937 |   |
| Volvo                  Aero                  |   |     | 403        |                         |   | 377 |   |
| Financial                  Services          |   |     | 1,365      |                         |   | 1,365 |   |
| Other                  units                 |   |     | 8          |                         |   | (45 | ) |
| **Operating                  income1**       |   |     | **13,859** |                         |   | **13,380** |   |
|                                         |   |     |            |                         |   |  |   |
| Revaluation                  of shares       |   |     | 820        |                         |   | 820 |   |
| **Operating                  income (loss)** |   |     | **14,679** |                         |   | **14,200** |   |

**Operating        margins **

| **%**                                   |   | **IFRS** |    | **Sw                  GAAP** |   |
|-----------------------------------------|--------|----------|---------|------------------------------|--------|
| Trucks                                  |   |     | 6.6     |                         |   | 6.6 |   |
| Buses                                   |   |     | 2.0     |                         |   | 1.5 |   |
| Construction                  Equipment |   |     | 6.5     |                         |   | 5.5 |   |
| Volvo                  Penta            |   |     | 10.4    |                         |   | 10.3 |   |
| Volvo                  Aero             |   |     | 5.8     |                         |   | 5.4 |   |
| **Operating                  margin1**  |   |     | **6.9** |                         |   | **6.6** |   |
| **Operating                  margin**   |   |     | **7.3** |                         |   | **7.0** |   |

----

**Significant        differences between Swedish GAAP and IFRS**

**Summarized        reconciliation of shareholders’ equity**

|  SEK                  M                                              |   | **040101** |       | **041231** |   | **050101** |   |
|---------------------------------------------------------------------------|--------|------------|------------|------------|--------|------------|--------|
| **Equity                  under Swedish GAAP**                            |   |       | **72,420** |       |   | **69,409** |   |   | **69,409** |   |
| ***IFRS                  adjustments:***                                  |   |       |            |       |   |            |   |   |  |   |
| Capitalization                  and amortization of intangible assets     |   |       | 722        |       |   | 340        |   |   | 340 |   |
| Minority                  interest                                        |   |       | 217        |       |   | 229        |   |   | 229 |   |
| Non-amortization                  of goodwill                             |   |       | 0          |       |   | 665        |   |   | 665 |   |
| Post                  employee benefits                                   |   |       | (580       | )          |   | (473       | )      |   | (473 | ) |
| Investments                  in listed companies                          |   |       |            |       |   |            |   |   | (494 | ) |
| Fair                  value gains and losses on derivatives for hedge of: |   |       |            |       |   |            |   |   |  |   |
| -                  Commercial cash flow                                   |   |       |            |       |   |            |   |   | 1,195 |   |
| -                  Electricity contracts                                  |   |       |            |       |   |            |   |   | (25 | ) |
| Consolidation                  of temporary investments                   |   |       | (152       | )          |   | -          |   |   | - |   |
| Share                  based payments                                     |   |       | 0          |       |   | 14         |   |   | 14 |   |
| Deferred                  taxes on IFRS adjustments                       |   |       | (96        | )          |   | (29        | )      |   | (358 | ) |
| ***Total                  adjustments to IFRS***                          |   |       | ***112***  |       |   | ***746***  |   |   | ***1,094*** |   |
| **Equity                  under IFRS**                                    |   |       | **72,532** |       |   | **70,155** |   |   | **70,503** |   |

**Summarized        reconciliation of net income**

|  SEK                  M                                          |   | **2004** |      |
|-----------------------------------------------------------------------|--------|----------|-----------|
| **Net                  income under Swedish GAAP**                    |   |     | **9,355** |   |
| ***IFRS                  adjustments:***                              |   |     |           |   |
| Capitalization                  and amortization of intangible assets |   |     | (382      | ) |
| Minority                  interest                                    |   |     | 40        |   |
| Non-amortization                  of goodwill                         |   |     | 684       |   |
| Post-employment                  benefits                             |   |     | 13        |   |
| Consolidation                  of temporary investments               |   |     | 142       |   |
| Deferred                  taxes on IFRS adjustments                   |   |     | 55        |   |
| ***Total                  adjustments to IFRS***                      |   |     | ***552*** |   |
| **Income                  for the period under IFRS**                 |   |     | **9,907** |   |

**Summarized        reconciliation of net financial position**

| SEK                  bn                                                                              |   | 2004   |       |
|------------------------------------------------------------------------------------------------------|--------|--------|------------|
| Volvo                  Group excl VFS                                                                |   |   |       |
| **Net                  financial position at December 31, 2004 under Swedish                  GAAP** |   |   | **18.7**   |   |
|                                                                                                 |   |   |            |   |
| ***IFRS                  adjustments:***                                                             |   |   |            |   |
| Post-employment                  benefits                                                            |   |   | (0.5       | ) |
| Derecognition                  of financial assets                                                   |   |   | (3.4       | ) |
| ***Total                  adjustments to IFRS***                                                     |   |   | ***(3.9*** | ***)*** |
| **Net                  financial position at January 1, 2005 under IFRS**                            |   |   | **14.8**   |   |

----

**Notes        to consolidated financial statements**

**Note        4 Acquisition and divestments of shares in subsidiaries **

**AB Volvo’s holding of shares.**

**Shandong        Lingong Construction Machinery Co.**

**Celero        Support AB**

**Properties**

**L.B.        Smith (SABA Holding Inc.)**

**Renault        V.I. and Mack**

**Prévost        Car Inc.**

**Axle        manufacturing**

**acquisition of subsidiaries and        other business units**

|                                                                                               |   | 2004   |     | 2005   |   | 2006    |   |
|----------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|---------|--------|
| Intangible                  assets                                                                 |   |   | (599     | )      |   | 20      |   |   | 0 |   |
| Property,                  plant and equipment                                                     |   |   | 300      |   |   | 124     |   |   | 73 |   |
| Assets                  under operating lease                                                      |   |   | 115      |   |   | 0       |   |   | 0 |   |
| Shares                  and participations                                                         |   |   | (260     | )      |   | (80     | )      |   | 5 |   |
| Inventories                                                                                        |   |   | 630      |   |   | 129     |   |   | 131 |   |
| Current                  receivables                                                               |   |   | 958      |   |   | 257     |   |   | 91 |   |
| Cash                  and cash equivalents                                                         |   |   | 180      |   |   | 42      |   |   | 8 |   |
| Other                  assets                                                                      |   |   | 62       |   |   | 3       |   |   | 0 |   |
| Minority                  interests                                                                |   |   | (20      | )      |   | (45     | )      |   | 0 |   |
| Provisions                                                                                         |   |   | (63      | )      |   | (4      | )      |   | (24 | ) |
| Loans                                                                                              |   |   | (347     | )      |   | (115    | )      |   | (20 | ) |
| Liabilities                                                                                        |   |   | (448     | )      |   | (203    | )      |   | (69 | ) |
| **Acquired                  net assets**                                                           |   |   | **508**  |   |   | **128** |   |   | **195** |   |
|                                                                                               |   |   |          |   |   |         |   |   |  |   |
| Cash                  and cash equivalents paid                                               |   |   | (508     | )      |   | (60     | )      |   | (167 | ) |
| Cash                  and cash equivalents according to acquisition                  analysis |   |   | 180      |   |   | 42      |   |   | 8 |   |
| **Effect                  on Group cash and cash equivalents**                                     |   |   | **(328** | **)**  |   | **(18** | **)**  |   | **(159** | **)** |

----

**divestment of subsidiaries and        other business units**

|                                                           |   | 2004   |     | 2005   |   | 2006     |   |
|----------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
| Intangible                  assets                             |   |   | -        |   |   | -        |   |   | (2 | ) |
| Property,                  plant and equipment                 |   |   | (440     | )      |   | (519     | )      |   | (181 | ) |
| Assets                  under operating lease                  |   |   | -        |   |   | -        |   |   | (369 | ) |
| Inventories                                                    |   |   | (4       | )      |   | (41      | )      |   | (254 | ) |
| Other                  receivables                             |   |   | 181      |   |   | (334     | )      |   | (416 | ) |
| Cash                  and cash equivalents                     |   |   | -        |   |   | (114     | )      |   | (128 | ) |
| Provisions                                                     |   |   | 94       |   |   | (12      | )      |   | 84 |   |
| Other                  liabilities                             |   |   | 50       |   |   | 888      |   |   | 723 |   |
| **Divested                  net assets**                       |   |   | **(119** | **)**  |   | **(132** | **)**  |   | **(543** | **)** |
|                                                           |   |   |          |   |   |          |   |   |  |   |
| Cash                  and cash equivalents received            |   |   | 187      |   |   | 782      |   |   | 797 |   |
| Cash                  and cash equivalents, divested companies |   |   | -        |   |   | (114     | )      |   | (128 | ) |
| **Effect                  on Group cash and cash equivalents** |   |   | **187**  |   |   | **668**  |   |   | **669** |   |

**Non-Current        Assets Held for Sale**

**Volvo        Aero Engine Services (VAES)**

| **Non-Current                  Assets Held for Sale1**                                                                                                                                                                |   | 2004   |   | 2005   |   | 2006  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|-------|--------|
| Tangible                  assets                                                                                                                                                                                      |   |   | -      |   |   | -     |   |   | 56 |   |
| Financial                  assets                                                                                                                                                                                     |   |   | -      |   |   | -     |   |   | 22 |   |
| Inventories                                                                                                                                                                                                           |   |   | -      |   |   | -     |   |   | 480 |   |
| Short-term                  recievables                                                                                                                                                                               |   |   | -      |   |   | -     |   |   | 247 |   |
| **Total                  assets**                                                                                                                                                                                     |   |   | **-**  |   |   | **-** |   |   | **805** |   |
|                                                                                                                                                                                                                  |   |   |        |   |   |       |   |   |  |   |
| Provision                  for post-employment benefits                                                                                                                                                               |   |   | -      |   |   | -     |   |   | 7 |   |
| Other                  provisions                                                                                                                                                                                     |   |   | -      |   |   | -     |   |   | 20 |   |
| Current                  liabilities                                                                                                                                                                                  |   |   | -      |   |   | -     |   |   | 253 |   |
| **Total                  shareholders equity and liabilities**                                                                                                                                                        |   |   | **-**  |   |   | **-** |   |   | **280** |   |
| 1 Assets                  and liabilities do not balance since the table only display the                  assets and                  liabilities in Volvo Aero Engine Services held for                  sale. |

----

**AB        Volvo’s holding of shares**

|                                                             |   |         |        |       |   | Dec                  31, 2005    |   | Dec                  31, 2006    |   |
|------------------------------------------------------------------|--------|--------------|-------------|------------|--------|----------------------------------|--------|----------------------------------|--------|
| **AB                  Volvo’s holding of shares**          |   | Registration |        | Percentage |   | Carrying                  value, |   | Carrying                  value, |   |
| **and                  participations in non-Group companies**   |   | number       |        | holding1   |   | SEK                  M      |   | SEK                  M      |   |
| Nissan                  Diesel, Japan                            |   |         | -           |       |   | 19                               |   |                             | -      |   |   | 5,494 |   |
| Deutz                  AG, Germany                               |   |         | -           |       |   | 7                                |   |                             | 253    |   |   | 740 |   |
| Blue                  Chip Jet II HB, Sweden                     |   |         | 969717-2105 |       |   | 50                               |   |                             | -      |   |   | 148 |   |
| Blue                  Chip Jet I HB, Sweden                      |   |         | 969639-1011 |       |   | 40                               |   |                             | 0      |   |   | 0 |   |
| Other                  investments                               |   |         |             |       |   |                                  |   |                             | 18     |   |   | 18 |   |
| **Total                    carrying value, Non-Group companies** |   |         |             |       |   |                                  |   |                             | 271    |   |   | 6,400 |   |

|                                                                            |   |         |        |       |   | Dec                  31, 2005    |   | Dec                  31, 2006    |   |
|---------------------------------------------------------------------------------|--------|--------------|-------------|------------|--------|----------------------------------|--------|----------------------------------|--------|
| **AB                  Volvo’s holding of shares and**                     |   | Registration |        | Percentage |   | Carrying                  value, |   | Carrying                  value, |   |
| **participations                  in major Group companies**                    |   | number       |        | holding    |   | SEK                  M           |   | SEK                  M           |   |
| **Volvo                  Lastvagnar AB, Sweden**                                |   |         | 556013-9700 |       |   | 100                              |   |                             | 8,678  |   |   | 8,678 |   |
| Volvo                  Truck Center Sweden AB, Sweden                           |   |         | 556072-7777 |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Finland AB, Finland                                      |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Europe Finance NV, Belgium                               |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Europa Truck NV, Belgium                                 |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| VTC                  Holland NV, The Netherlands                                |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Otomotiv Turk Ltd STI, Turkey                            |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Trucks de Mexico, Mexico                                 |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  India Ltd, India                                         |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Commercial Vehicles Australia Pty, Australia             |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
|                                                                            |   |         |             |       |   |                                  |   |                             |        |   |   |  |   |
| **Volvo                  Holding Sverige AB, Sweden**                           |   |         | 556539-9853 |       |   | 100                              |   |                             | 7,634  |   |   | 7,634 |   |
| BRS                  Ltd, Great Britain                                         |   |         |             |       |   | 100                              |   |                             | -      |   |   | - |   |
| Mack                  Canada Inc, Canada                                        |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Construction Equipment North America,   Canada |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Polska Sp. O.O., Poland                                  |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Southern Africa Pty Ltd, South Africa                    |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  do Brasil Veiculos Ltda, Brasil                          |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Banco                  Volvo (Brasil) SA, Brasil                                |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Laponia                  Sudeste Ltda, Brasil                                   |   |         | -           |       |   | 100                              |   |                             | -      |   |   | -- |   |
|                                                                            |   |         |             |       |   |                                  |   |                             |        |   |   |  |   |
| **Volvo                  Holding France SA, France**                            |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Trucks France SAS, France                                |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  Compact Equipment SAS, France                            |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| Volvo                  CE Europe SAS, France                                    |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| VFS                  Finance France SAS, France                                 |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |
| VFS                  Location France SAS, France                                |   |         | -           |       |   | 100                              |   |                             | -      |   |   | - |   |

----

|                                                                  |   |         |   |       |   | Dec                    31, 2005    |   | Dec                    31, 2006    |   |
|-----------------------------------------------------------------------|--------|--------------|--------|------------|--------|------------------------------------|--------|------------------------------------|--------|
| **AB                    Volvo’s holding of shares and**         |   | Registration |   | Percentage |   | Carrying                    value, |   | Carrying                    value, |   |
| **participations                    in major Group companies**(cont.) |   | number       |   | holding    |   | SEK                    M           |   | SEK                    M           |   |

| **Renault                  Trucks, France**                                 |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|-----------------------------------------------------------------------------|--------|--------|-------------|--------|--------|-----|--------|--------|-------|--------|--------|-------|--------|
| Renault                  Trucks UK Ltd, Great Britain                       |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|     Renault                  Trucks                     |   |   |             |   |   |     |   |   |       |   |   |       |   |
|     Deutschland                  GmbH, Germany          |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|     Renault                  VI España SA, Spain   |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|     Renault                  Trucks, España, Spain |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|                      Renault Trucks Italia Spa, Italy        |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|                                                                        |   |   |             |   |   |     |   |   |       |   |   |       |   |
| **Mack                  Trucks Inc, USA**                                   |   |   | -           |   |   | 100 |   |   | 3,225 |   |   | 3,225 |   |
| Mack                  de Venezuela C.A., Venezuela                          |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Mack                  Trucks Australia Pty Ltd, Australia                   |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|                                                                        |   |   |             |   |   |     |   |   |       |   |   |       |   |
| **Volvo                  Bussar AB, Sweden**                                |   |   | 556197-3826 |   |   | 100 |   |   | 1,877 |   |   | 1,877 |   |
| Volvo                  Bussar S’ffle AB, Sweden                       |   |   | 556058-3485 |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Bus Finland Oy, Finland                              |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Prévost                  Car Inc, Canada                               |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|                                                                        |   |   |             |   |   |     |   |   |       |   |   |       |   |
| **Volvo                  Construction**                                     |   |   |             |   |   |     |   |   |       |   |   |       |   |
| **Equipment                  NV, The Netherlands**                          |   |   | -           |   |   | 100 |   |   | 2,582 |   |   | 2,582 |   |
| Volvo                  Construction Equipment AB, Sweden               |   |   | 556021-9338 |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Maskin AS, Norway                                    |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Construction Equipment                               |   |   |             |   |   |     |   |   |       |   |   |       |   |
| Europe                  Ltd, Great Britain                                  |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Construction Equipment                               |   |   |             |   |   |     |   |   |       |   |   |       |   |
| Europe                  GmbH, Germany                                       |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Compact Equipment GmbH & Co KG, Germany          |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Motor Graders, Ltd, Canada                           |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
|                                                                        |   |   |             |   |   |     |   |   |       |   |   |       |   |
| **AB                  Volvo Penta, Sweden**                                 |   |   | 556034-1330 |   |   | 100 |   |   | 421   |   |   | 421   |   |
|                                                                        |   |   |             |   |   |     |   |   |       |   |   |       |   |
| **Volvo                  Aero AB, Sweden**                                  |   |   | 556029-0347 |   |   | 100 |   |   | 2,885 |   |   | 2,885 |   |
|   Volvo                  Aero Engine Services AB, Sweden          |   |   | 556328-9171 |   |   | 100 |   |   | -     |   |   | -     |   |
|   Volvo                  Aero Norge AS, Norway                    |   |   | -           |   |   | 78  |   |   | -     |   |   | -     |   |
|                                                                        |   |   |             |   |   |     |   |   |       |   |   |       |   |
| **VNA                  Holding Inc., USA**                                  |   |   | -           |   |   | 100 |   |   | 3,510 |   |   | 2,456 |   |
| Volvo Group                  North America Inc, USA                    |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Trucks Canada Inc., Canada                           |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Arrow                  Truck Sales Inc., USA                                |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Construction Equipment                               |   |   |             |   |   |     |   |   |       |   |   |       |   |
| North                  America Inc., USA                                    |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Penta of The Americas Inc., USA                      |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Aero Services LP, USA                                |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Commercial                                           |   |   |             |   |   |     |   |   |       |   |   |       |   |
| Finance                  LLC The Americas, USA                              |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| VFS                  US LLC, USA                                            |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Treasury North America, USA                          |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |
| Volvo                  Treasury Canada Inc., Canada                         |   |   | -           |   |   | 100 |   |   | -     |   |   | -     |   |

----

**AB          Volvo’s holding of shares**

|                                                                      |   |         |   |       |   | Dec                        31, 2005    |   | Dec                        31, 2006    |   |
|---------------------------------------------------------------------------|--------|--------------|--------|------------|--------|----------------------------------------|--------|----------------------------------------|--------|
| **AB                        Volvo’s holding of shares and**         |   | Registration |   | Percentage |   | Carrying                        value, |   | Carrying                        value, |   |
| **participations                        in major Group companies**(cont.) |   | number       |   | holding    |   | SEK                        M           |   | SEK                        M           |   |

| **Volvo                  Financial Services AB, Sweden**                                                  |   |   | 556000-5406 |   |   | 100 |   |   | 1,413      |   |   | 1,413      |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|-----|--------|--------|------------|--------|--------|------------|--------|
| VFS                  International AB, Sweden                                                             |   |   | 556316-6064 |   |   | 100 |   |   | -          |   |   | -          |   |
| VFS                  Financial Services BV, The Netherlands                                               |   |   | -           |   |   | 100 |   |   | -          |   |   | -          |   |
| VFS                  Financial Services (UK) Ltd, Great Britain                                           |   |   | -           |   |   | 100 |   |   | -          |   |   | -          |   |
| VFS                  Deutschland GmbH, Germany                                                            |   |   | -           |   |   | 100 |   |   | -          |   |   | -          |   |
| VFS                  Financial Services Spain EFC, SA Spain                                               |   |   | -           |   |   | 100 |   |   | -          |   |   | -          |   |
| VFS                  Canada Inc, Canada                                                                   |   |   | -           |   |   | 100 |   |   | -          |   |   | -          |   |
| Volvo                  Treasury AB, Sweden                                                                |   |   | 556135-4449 |   |   | 100 |   |   | 3,044      |   |   | 3,044      |   |
| Volvo                  Treasury Asia Ltd, Singapore                                                       |   |   |             |   |   | 100 |   |   | -          |   |   | -          |   |
| Sotrof                  AB, Sweden                                                                        |   |   | 556519-4494 |   |   | 100 |   |   | 1,388      |   |   | 1,388      |   |
| Volvo                  Logistics AB, Sweden                                                               |   |   | 556197-9732 |   |   | 100 |   |   | -          |   |   | -          |   |
| Danafjord                  AB, Sweden                                                                     |   |   | 556006-8313 |   |   | 100 |   |   | -          |   |   | -          |   |
| Volvo                  Group Finance Europe BV, The Netherlands                                           |   |   | -           |   |   | 100 |   |   | 1,003      |   |   | 1,003      |   |
| Volvo                  Korea Holding AB, Sweden                                                           |   |   | 556531-8572 |   |   | 100 |   |   | -          |   |   | -          |   |
| Volvo                  Construction Equipment                                                             |   |   |             |   |   |     |   |   |            |   |   |            |   |
| Korea                  Co Ltd, South Korea                                                                |   |   | -           |   |   | 100 |   |   | -          |   |   | -          |   |
| Volvo                  China Investment Co Ltd, China                                                     |   |   | -           |   |   | 100 |   |   | 523        |   |   | 523        |   |
| Shanghai                  Sunwin Bus Co, China2                                                           |   |   | -           |   |   | 50  |   |   | -          |   |   | -          |   |
| XIAN                  Silver Bus Co, China2                                                               |   |   | -           |   |   | 50  |   |   | -          |   |   | -          |   |
| Volvo                  Automotive Finance (China) Ltd, China                                              |   |   | -           |   |   | 100 |   |   | -          |   |   | 491        |   |
| Volvo                  Truck & Bus Ltd, Great Britain1                                                |   |   | -           |   |   | 100 |   |   | 413        |   |   | 413        |   |
| Volvo                  Holding Mexico, Mexico                                                             |   |   | -           |   |   | 100 |   |   | 388        |   |   | 388        |   |
| Volvo                  Technology Transfer AB, Sweden                                                     |   |   | 556542-4370 |   |   | 100 |   |   | 361        |   |   | 361        |   |
| Volvo                  Technology AB, Sverige                                                             |   |   | 556542-4321 |   |   | 100 |   |   | -          |   |   | -          |   |
| Volvo                  Powertrain AB, Sweden                                                              |   |   | 556000-0753 |   |   | 100 |   |   | 348        |   |   | 348        |   |
| Volvo                  Information Technology AB, Sweden                                                  |   |   | 556103-2698 |   |   | 100 |   |   | 8          |   |   | 276        |   |
| Volvo                  Parts AB, Sweden                                                                   |   |   | 556365-9746 |   |   | 100 |   |   | 200        |   |   | 200        |   |
| Volvo                  Group Insurance Försäkrings                  AB,                  Sweden |   |   | 516401-8037 |   |   | 100 |   |   | 182        |   |   | 182        |   |
| Volvo                  Business Services AB, Sweden                                                       |   |   | 556029-5197 |   |   | 100 |   |   | 107        |   |   | 107        |   |
| Volvo                  Danmark Holding AS, Denmark                                                        |   |   | -           |   |   | 100 |   |   | 104        |   |   | 104        |   |
| VFS                  Servizi Financiari Spa, Italy3                                                       |   |   | -           |   |   | 100 |   |   | 101        |   |   | 101        |   |
| Kommersiella                  Fordon Europa AB, Sweden                                                    |   |   | 556049-3388 |   |   | 100 |   |   | 249        |   |   | 89         |   |
| Volvo                  Norge AS, Norway                                                                   |   |   | -           |   |   | 100 |   |   | 56         |   |   | 56         |   |
| Volvo                  Malaysia Sdn, Malaysia                                                             |   |   | -           |   |   | 100 |   |   | 48         |   |   | 48         |   |
| ZAO                  Volvo Vostok, Russia4                                                                |   |   | -           |   |   | 100 |   |   | 0          |   |   | 34         |   |
| Volvo                  Italia Spa, Italy                                                                  |   |   | -           |   |   | 100 |   |   | 0          |   |   | 27         |   |
| Rossareds                  Fastighets AB, Sweden                                                          |   |   | 556009-1190 |   |   | 100 |   |   | 26         |   |   | 26         |   |
| Volvo                  Penta UK Ltd, Great Britain                                                        |   |   | -           |   |   | 100 |   |   | 16         |   |   | 16         |   |
| Volvo                  East Asia (Pte) Ltd, Singapore                                                     |   |   | -           |   |   | 100 |   |   | 9          |   |   | 9          |   |
| Volvo                  Automotive Holding BV, The Netherlands                                             |   |   | -           |   |   | 100 |   |   | 3          |   |   | 3          |   |
| Volvo                  Information Technology GB Ltd, Great Britain                                       |   |   | -           |   |   | 100 |   |   | 3          |   |   | 3          |   |
| Other                  holdings                                                                           |   |   |             |   |   |     |   |   | 7          |   |   | 8          |   |
| **Total                  carrying value Group companies5**                                                |   |   |             |   |   |     |   |   | **40,812** |   |   | **40,419** |   |

----

**Note        5 Joint ventures**

|                                              |   | Dec                  31, 2006 |   |
|---------------------------------------------------|--------|-------------------------------|--------|
|                                              |   | Holding                       |   | Holding |   |
| **Shares                  in Joint ventures**     |   | percentage                    |   | no                  of shares |   |
| Shanghai                  Sunwin Bus Corp., China |   |                          | 50     |   |   | - |   |
| Xian                  Silver Bus Corp., China     |   |                          | 50     |   |   | - |   |

| **Volvo's                  share of joint ventures' income statements** |   | 2004   |    | 2005   |   | 2006    |   |
|-------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Net                  sales                                              |   |   | 492     |   |   | 345     |   |   | 630 |   |
| Operating                  income                                       |   |   | (27     | )      |   | (62     | )      |   | (9 | ) |
| Income                  after financial items                           |   |   | (32     | )      |   | (71     | )      |   | (17 | ) |
| **Income                  of the period**                               |   |   | **(34** | **)**  |   | **(71** | **)**  |   | **(17** | **)** |
|                                                                    |   |   |         |   |   |         |   |   |  |   |
|                                                                    |   |   |         |   |   |         |   |   |  |   |
| **Volvo's                  share of joint ventures' balance sheets**    |   |   | 2004    |   |   | 2005    |   |   | 2006 |   |
| Non-current                  assets                                     |   |   | 100     |   |   | 117     |   |   | 99 |   |
| Current                  assets                                         |   |   | 394     |   |   | 386     |   |   | 359 |   |
| **Total                  assets**                                       |   |   | **494** |   |   | **503** |   |   | **458** |   |
|                                                                    |   |   |         |   |   |         |   |   |  |   |
| Shareholders'                  equity                                   |   |   | 228     |   |   | 207     |   |   | 168 |   |
| Provisions                                                              |   |   | 6       |   |   | 1       |   |   | 2 |   |
| Long-term                  liabilities                                  |   |   | 0       |   |   | 0       |   |   | 3 |   |
| Current                  liabilities                                    |   |   | 260     |   |   | 295     |   |   | 285 |   |
| **Total                  shareholders' equity and liabilities**         |   |   | **494** |   |   | **503** |   |   | **458** |   |

|                                           |   | 2004                       |    | 2005                      |   | 2006                       |   |
|------------------------------------------------|--------|----------------------------|---------|---------------------------|--------|----------------------------|--------|
|                                           |   | Number                  of |    | of                  which |   | Number                  of |   | of                  which |   | Number                  of |   | of                  which |   |
| **Average**number of employees                 |   | employees                  |    | women,                  % |   | employees                  |   | women,                  % |   | employees |   | women,                  % |   |
| Shanghai                  Sunwin Bus Corp.     |   |                       | 604     |                      |   | 21                         |   |   | 567 |   |   | 17 |   |   | 488 |   |   | 18 |   |
| Xian                  Silver Bus Corp.         |   |                       | 252     |                      |   | 12                         |   |   | 243 |   |   | 14 |   |   | 258 |   |   | 15 |   |
| **Total                  number of employees** |   |                       | **856** |                      |   | **18**                     |   |   | **810** |   |   | **16** |   |   | **746** |   |   | **17** |   |

**Note        6 Associated companies **

|                                                            |   |   |                  |   |   | 2006                    |   |
|-----------------------------------------------------------------|--------|--------|-----------------------|--------|--------|-------------------------|--------|
|                                                            |   |   |                  |   |   | Nissan                  |   |  |   |   |   |
| **Income                  statement data**                      |   | 2004   |                  | 2005   |   | Diesel1                 |   | Other |   | Total |   |
| Net                  sales                                      |   |   | 5,750                 |   |   | 7,133                   |   |   | 15,488 |   |   | 7,245 |   |   | 22,733 |   |
| Cost                  of operations                             |   |   | (5,575                | )      |   | (6,914                  | )      |   | (14,874 | ) |   | (7,167 | ) |   | (22,041 | ) |
| Financial                  income and expense                   |   |   | (10                   | )      |   | (16                     | )      |   | (22 | ) |   | (21 | ) |   | (43 | ) |
| **Income                  before taxes**                        |   |   | **165**               |   |   | **203**                 |   |   | **592** |   |   | **57** |   |   | **649** |   |
|                                                            |   |   |                       |   |   |                         |   |   |  |   |   |  |   |   |  |   |
| Income                  taxes                                   |   |   | (8                    | )      |   | (19                     | )      |   | (310 | ) |   | (17 | ) |   | (327 | ) |
| **Income                  of the period**                       |   |   | **157**               |   |   | **184**                 |   |   | **282** |   |   | **40** |   |   | **322** |   |
|                                                            |   |   |                       |   |   |                         |   |   |  |   |   |  |   |   |  |   |
|                                                            |   |   | Dec                31 |   |   | Dec                  31 |   |   | Dec                  31 |   |   | Dec                  31 |   |   | Dec                  31 |   |
| **Balance                  sheet data**                         |   |   | 2004                  |   |   | 2005                    |   |   | 2006 |   |   | 2006 |   |   | 2006 |   |
| Property,                  plant and equipment, net             |   |   | 2,099                 |   |   | 792                     |   |   | 10,292 |   |   | 1,093 |   |   | 11,385 |   |
| Other                  non-current assets                       |   |   | 88                    |   |   | 15                      |   |   | 7,984 |   |   | 11 |   |   | 7,995 |   |
| Current                  assets                                 |   |   | 9,637                 |   |   | 9,270                   |   |   | 10,666 |   |   | 7,494 |   |   | 18,160 |   |
| **Total                  Assets**                               |   |   | **11,824**            |   |   | **10,077**              |   |   | **28,942** |   |   | **8,598** |   |   | **37,540** |   |
|                                                            |   |   |                       |   |   |                         |   |   |  |   |   |  |   |   |  |   |
| Shareholders'                  equity                           |   |   | 981                   |   |   | 688                     |   |   | 8,334 |   |   | 996 |   |   | 9,330 |   |
| Provisions                                                      |   |   | 87                    |   |   | 55                      |   |   | 591 |   |   | 47 |   |   | 638 |   |
| Long-term                  liabilities                          |   |   | 1,132                 |   |   | 171                     |   |   | 7,921 |   |   | 206 |   |   | 8,127 |   |
| Current                  liabilities                            |   |   | 9,624                 |   |   | 9,163                   |   |   | 12,096 |   |   | 7,349 |   |   | 19,445 |   |
| **Total                  Shareholders' equity and liabilities** |   |   | **11,824**            |   |   | **10,077**              |   |   | **28,942** |   |   | **8,598** |   |   | **37,540** |   |

----

**Notes        to consolidated financial statements**

**Note        7 Segment reporting**

**Reporting        by business segment**

| **Net                  sales**                           |   | 2004   |        | 2005   |   | 2006        |   |
|----------------------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|
| Trucks                                                   |   |   | 136,879     |   |   | 155,396     |   |   | 166,306 |   |
| Buses                                                    |   |   | 12,722      |   |   | 16,589      |   |   | 16,856 |   |
| Construction                  Equipment                  |   |   | 29,360      |   |   | 34,816      |   |   | 40,564 |   |
| Volvo                  Penta                             |   |   | 9,057       |   |   | 9,776       |   |   | 10,485 |   |
| Volvo                  Aero                              |   |   | 6,925       |   |   | 7,538       |   |   | 8,048 |   |
| Other                  and eliminations                  |   |   | 7,228       |   |   | 7,076       |   |   | 5,876 |   |
| **Volvo                  Group excl Financial Services** |   |   | **202,171** |   |   | **231,191** |   |   | **248,135** |   |
|                                                     |   |   |             |   |   |             |   |   |  |   |
| Financial                  Services                      |   |   | 9,598       |   |   | 7,549       |   |   | 8,969 |   |
| Eliminations                                             |   |   | (693        | )      |   | 1,819       |   |   | 1,731 |   |
| **Volvo                  Group total**                   |   |   | **211,076** |   |   | **240,559** |   |   | **258,835** |   |

| **Net                  sales to Group companies**       |   | 2004   |    | 2005   |   | 2006    |   |
|---------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Trucks                                                  |   |   | 690     |   |   | 752     |   |   | 933 |   |
| Buses                                                   |   |   | 377     |   |   | 102     |   |   | 96 |   |
| Construction                  Equipment                 |   |   | 162     |   |   | 127     |   |   | 134 |   |
| Volvo                  Penta                            |   |   | 27      |   |   | 42      |   |   | 24 |   |
| Volvo                  Aero                             |   |   | 43      |   |   | 82      |   |   | 86 |   |
| Other                                                   |   |   | 9,440   |   |   | 10,589  |   |   | 10,788 |   |
| Eliminations                                            |   |   | (10,739 | )      |   | (11,694 | )      |   | (12,061 | ) |
| **Total                  excl Financial Services**      |   |   | **0**   |   |   | **0**   |   |   | **0** |   |
|                                                    |   |   |         |   |   |         |   |   |  |   |
| Financial                  Services                     |   |   | 693     |   |   | 755     |   |   | 814 |   |
| Eliminations                                            |   |   | (693    | )      |   | (755    | )      |   | (814 | ) |
| **Total                  net sales to Group companies** |   |   | **0**   |   |   | **0**   |   |   | **0** |   |

| **Operating                  income**   |   | 2004   |       | 2005   |   | 2006       |   |
|-----------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Trucks                                  |   |   | 8,992      |   |   | 11,717     |   |   | 12,657 |   |
| Buses                                   |   |   | 158        |   |   | 470        |   |   | 633 |   |
| Construction                  Equipment |   |   | 1,898      |   |   | 2,752      |   |   | 3,888 |   |
| Volvo                  Penta            |   |   | 940        |   |   | 943        |   |   | 1,002 |   |
| Volvo                  Aero             |   |   | 403        |   |   | 836        |   |   | 345 |   |
| Financial                  Services     |   |   | 1,365      |   |   | 2,033      |   |   | 2,301 |   |
| Other                                   |   |   | 923        |   |   | (598       | )      |   | (427 | ) |
| **Volvo                  Group total**  |   |   | **14,679** |   |   | **18,153** |   |   | **20,399** |   |

| **Depreciation                  and amortization**                        |   | 2004   |       | 2005   |   | 2006      |   |
|---------------------------------------------------------------------------|--------|--------|------------|--------|--------|-----------|--------|
| Trucks                                                                    |   |   | 5,306      |   |   | 5,307     |   |   | 7,820 |   |
| Buses                                                                     |   |   | 219        |   |   | 249       |   |   | 281 |   |
| Construction                  Equipment                                   |   |   | 627        |   |   | 658       |   |   | 802 |   |
| Volvo                  Penta                                              |   |   | 122        |   |   | 224       |   |   | 205 |   |
| Volvo                  Aero                                               |   |   | 391        |   |   | 366       |   |   | 363 |   |
| Other                                                                     |   |   | 220        |   |   | 88        |   |   | 23 |   |
| **Total                  excl Financial Services**                        |   |   | **6,885**  |   |   | **6,892** |   |   | **9,494** |   |
|                                                                      |   |   |            |   |   |           |   |   |  |   |
| Financial                  Services                                       |   |   | 3,117      |   |   | 429       |   |   | 344 |   |
| Reclassification                  Group versus segment Financial Services |   |   | -          |   |   | 2,573     |   |   | 2,545 |   |
| **Volvo                  Group total1**                                   |   |   | **10,002** |   |   | **9,894** |   |   | **12,383** |   |

| **Research                  and development expenses** |   | 2004   |      | 2005   |   | 2006      |   |
|--------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Trucks                                                 |   |   | 5,491     |   |   | 5,200     |   |   | 5,872 |   |
| Buses                                                  |   |   | 484       |   |   | 569       |   |   | 603 |   |
| Construction                  Equipment                |   |   | 1,033     |   |   | 1,083     |   |   | 1,008 |   |
| Volvo                  Penta                           |   |   | 311       |   |   | 413       |   |   | 445 |   |
| Volvo                  Aero                            |   |   | 209       |   |   | 225       |   |   | 288 |   |
| Other                                                  |   |   | 86        |   |   | 67        |   |   | 138 |   |
| **Volvo                  Group total**                 |   |   | **7,614** |   |   | **7,557** |   |   | **8,354** |   |

----

| **Income                  from investments in associated companies** |   | 2004   |   | 2005   |   | 2006     |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|----------|--------|
| Trucks                                                               |   |   | 13     |   |   | (6       | )      |   | 23 |   |
| Buses                                                                |   |   | 1      |   |   | 7        |   |   | 10 |   |
| Construction                  Equipment                              |   |   | -      |   |   | 0        |   |   | 0 |   |
| Volvo                  Penta                                         |   |   | -      |   |   | 0        |   |   | 0 |   |
| Volvo                  Aero                                          |   |   | (1     | )      |   | 68       |   |   | 8 |   |
| Other                                                                |   |   | (11    | )      |   | (637     | )      |   | 19 |   |
| **Volvo                  Group excl Financial Services**             |   |   | **2**  |   |   | **(568** | **)**  |   | **60** |   |
|                                                                 |   |   |        |   |   |          |   |   |  |   |
| Financial                  Services                                  |   |   | 25     |   |   | 11       |   |   | 1 |   |
| **Volvo                  Group total**                               |   |   | **27** |   |   | **(557** | **)**  |   | **61** |   |

| **Total                  assets**                                        |   | 2004   |        | 2005   |   | 2006        |   |
|--------------------------------------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|
| Operating                  assets, excluding Financial Services:1        |   |   |        |   |   |        |   |
| Trucks                                                                   |   |   | 71,439      |   |   | 83,973      |   |   | 89,188 |   |
| Buses                                                                    |   |   | 8,017       |   |   | 10,499      |   |   | 9,646 |   |
| Construction                  Equipment                                  |   |   | 16,858      |   |   | 21,437      |   |   | 24,040 |   |
| Volvo                  Penta                                             |   |   | 3,242       |   |   | 3,700       |   |   | 3,931 |   |
| Volvo                  Aero                                              |   |   | 8,695       |   |   | 10,118      |   |   | 10,102 |   |
| Other                                                                    |   |   | 3,881       |   |   | 2,938       |   |   | 644 |   |
| **Total                  operating assets excluding Financial Services** |   |   | **112,132** |   |   | **132,665** |   |   | **137,551** |   |
|                                                                     |   |   |             |   |   |             |   |   |  |   |
| Interest-bearing                  financial assets                       |   |   | 46,312      |   |   | 43,939      |   |   | 43,126 |   |
| Tax                  receivables                                         |   |   | 6,259       |   |   | 5,986       |   |   | 7,476 |   |
| Total                  assets in Financial Services                      |   |   | 71,499      |   |   | 85,849      |   |   | 84,102 |   |
| Other                  and eliminations                                  |   |   | (12,234     | )      |   | (11,232     | )      |   | (13,828 | ) |
| **Volvo                  Group total**                                   |   |   | **223,968** |   |   | **257,207** |   |   | **258,427** |   |

| **Total                  shareholders' equity and liabilities**                                |   | 2004   |        | 2005   |   | 2006        |   |
|------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|
| Operating                  liabilities, excluding Financial Services:1                         |   |   |        |   |   |        |   |
| Trucks                                                                                         |   |   | 55,105      |   |   | 62,743      |   |   | 65,586 |   |
| Buses                                                                                          |   |   | 3,324       |   |   | 4,728       |   |   | 4,565 |   |
| Construction                  Equipment                                                        |   |   | 6,602       |   |   | 9,350       |   |   | 11,177 |   |
| Volvo                  Penta                                                                   |   |   | 1,620       |   |   | 1,820       |   |   | 2,111 |   |
| Volvo                  Aero                                                                    |   |   | 3,695       |   |   | 4,622       |   |   | 4,186 |   |
| Other                                                                                          |   |   | 2,788       |   |   | 2,793       |   |   | 956 |   |
| **Total                  operating liabilities excluding Financial                  Services** |   |   | **73,134**  |   |   | **86,056**  |   |   | **88,581** |   |
|                                                                                           |   |   |             |   |   |             |   |   |  |   |
| Financial                  liabilities                                                         |   |   | 28,402      |   |   | 24,670      |   |   | 18,446 |   |
| Tax                  liabilities                                                               |   |   | 1,608       |   |   | 2,578       |   |   | 4,624 |   |
| Total                  liabilities in Financial Services                                       |   |   | 63,193      |   |   | 76,214      |   |   | 74,399 |   |
| Other                  and eliminations                                                        |   |   | (12,524     | )      |   | (11,071     | )      |   | (14,811 | ) |
| **Total                  liabilities**                                                         |   |   | **153,813** |   |   | **178,447** |   |   | **171,239** |   |
|                                                                                           |   |   |             |   |   |             |   |   |  |   |
| Shareholders'                  equity                                                          |   |   | 70,155      |   |   | 78,760      |   |   | 87,188 |   |
| **Volvo                  Group total**                                                         |   |   | **223,968** |   |   | **257,207** |   |   | **258,427** |   |

| **Investments                  in associated companies** |   | 2004   |    | 2005   |   | 2006    |   |
|----------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Trucks                                                   |   |   | 37      |   |   | 47      |   |   | 5,498 |   |
| Buses                                                    |   |   | 20      |   |   | 35      |   |   | 43 |   |
| Construction                  Equipment                  |   |   | -       |   |   | -       |   |   | - |   |
| Volvo                  Penta                             |   |   | -       |   |   | -       |   |   | - |   |
| Volvo                  Aero                              |   |   | 37      |   |   | 3       |   |   | 1 |   |
| Financial                  Services                      |   |   | 172     |   |   | 23      |   |   | 24 |   |
| Other                                                    |   |   | 647     |   |   | 87      |   |   | 228 |   |
| **Volvo                  Group total**                   |   |   | **913** |   |   | **195** |   |   | **5,794** |   |

| **Capital                  expenditures**                                 |   | 2004   |       | 2005   |   | 2006       |   |
|---------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Trucks                                                                    |   |   | 5,030      |   |   | 7,190      |   |   | 6,260 |   |
| Buses                                                                     |   |   | 176        |   |   | 250        |   |   | 263 |   |
| Construction                  Equipment                                   |   |   | 1,158      |   |   | 906        |   |   | 1,580 |   |
| Volvo                  Penta                                              |   |   | 297        |   |   | 243        |   |   | 248 |   |
| Volvo                  Aero                                               |   |   | 801        |   |   | 904        |   |   | 843 |   |
| Other                                                                     |   |   | 237        |   |   | 762        |   |   | 402 |   |
| **Volvo                  Group excl Financial Services**                  |   |   | **7,699**  |   |   | **10,255** |   |   | **9,596** |   |
|                                                                      |   |   |            |   |   |            |   |   |  |   |
| Financial                  Services                                       |   |   | 4,784      |   |   | 386        |   |   | 999 |   |
| Reclassification                  Group versus segment Financial Services |   |   | -          |   |   | 4,210      |   |   | 3,439 |   |
| **Volvo                  Group total**                                    |   |   | **12,483** |   |   | **14,851** |   |   | **14,034** |   |

| **Reporting                  by geographical segment** |   |   |        |   |   |        |   |
|--------------------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|
|                                                   |   |   |        |   |   |        |   |
| **Net                  sales**                         |   | 2004   |        | 2005   |   | 2006        |   |
| Europe                                                 |   |   | 119,077     |   |   | 124,023     |   |   | 138,342 |   |
| North                  America                         |   |   | 54,769      |   |   | 69,743      |   |   | 74,928 |   |
| South                  America                         |   |   | 7,338       |   |   | 12,479      |   |   | 13,159 |   |
| Asia                                                   |   |   | 20,789      |   |   | 22,699      |   |   | 19,655 |   |
| Other                  markets                         |   |   | 9,103       |   |   | 11,615      |   |   | 12,751 |   |
| **Volvo                  Group total***                |   |   | **211,076** |   |   | **240,559** |   |   | **258,835** |   |
|                                                   |   |   |             |   |   |             |   |   |  |   |
| *of                  which:                            |   |   |             |   |   |             |   |   |  |   |
| Sweden                                                 |   |   | 14,606      |   |   | 15,334      |   |   | 13,805 |   |
| United                  States                         |   |   | 45,926      |   |   | 59,254      |   |   | 61,793 |   |
| France                                                 |   |   | 26,900      |   |   | 27,610      |   |   | 31,155 |   |

| **Total                  assets**        |   | 2004   |        | 2005   |   | 2006        |   |
|------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|
| Sweden                                   |   |   | 79,578      |   |   | 86,865      |   |   | 81,173 |   |
| Europe                  excluding Sweden |   |   | 77,909      |   |   | 86,530      |   |   | 91,163 |   |
| North                  America           |   |   | 48,165      |   |   | 60,846      |   |   | 58,444 |   |
| South                  America           |   |   | 6,526       |   |   | 10,131      |   |   | 10,766 |   |
| Asia                                     |   |   | 7,757       |   |   | 9,460       |   |   | 11,512 |   |
| Other                  markets           |   |   | 4,033       |   |   | 3,375       |   |   | 5,369 |   |
| **Volvo                  Group total**   |   |   | **223,968** |   |   | **257,207** |   |   | **258,427** |   |

| **Capital                  expenditures** |   | 2004   |       | 2005   |   | 2006       |   |
|-------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Sweden                                    |   |   | 3,690      |   |   | 5,935      |   |   | 3,970 |   |
| Europe                  excluding Sweden  |   |   | 6,305      |   |   | 5,770      |   |   | 7,395 |   |
| North                  America            |   |   | 1,835      |   |   | 2,451      |   |   | 1,851 |   |
| South                  America            |   |   | 247        |   |   | 296        |   |   | 280 |   |
| Asia                                      |   |   | 362        |   |   | 259        |   |   | 421 |   |
| Other                  markets            |   |   | 44         |   |   | 140        |   |   | 117 |   |
| **Volvo                  Group total**    |   |   | **12,483** |   |   | **14,851** |   |   | **14,034** |   |

----

**Notes        to consolidated financial statements**

**Note        8 Other operating income and expenses**

|                                                                                                                    |   | 2004   |     | 2005   |   | 2006     |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
| Gains/losses                  on currency related forward and options contracts                                    |   |   | 828      |   |   | (566     | )      |   | 481 |   |
| Exchange                  rate differences on trade receivables and payables                                            |   |   | (86      | )      |   | 481      |   |   | (825 | ) |
| Gains/losses                  on divestment of group companies                                                          |   |   | 69       |   |   | 697      |   |   | 286 |   |
| Change                  in allowances and write offs for doubtful receivables, customer                  financing |   |   | (545     | )      |   | (460     | )      |   | (189 | ) |
| Change                  in allowances, and write offs for doubtful receivables,                  other             |   |   | 37       |   |   | (133     | )      |   | (273 | ) |
| Expenses                  for industrial relocation of Renault Trucks Villaverde plant in                  Spain        |   |   | (470     | )      |   | -        |   |   | - |   |
| Expenses                  for closing Volvo Buses Heilbronn plant in Germany                                            |   |   | -        |   |   | (95      | )      |   | - |   |
| Expenses                  for closing Volvo operations in Bromma, Sweden                                                |   |   | -        |   |   | -        |   |   | (258 | ) |
| Volvo                  profit sharing program                                                                           |   |   | (200     | )      |   | (419     | )      |   | (444 | ) |
| Adjustment                  of goodwill in the subsidiary Mack Trucks                                                   |   |   | -        |   |   | -        |   |   | (1,712 | ) |
| Other                  income and expenses                                                                              |   |   | (250     | )      |   | (93      | )      |   | (532 | ) |
| **Total**                                                                                                               |   |   | **(618** | **)**  |   | **(588** | **)**  |   | **(3,466** | **)** |

**Note        9 Income from investments in associated companies **

| **Income/loss**                                                                                    |   | 2004   |   | 2005   |   | 2006     |   |
|----------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|----------|--------|
| Nissan                  Diesel                                                                     |   |   | -      |   |   | -        |   |   | 39 |   |
| JV                  Fonderie Venissieux                                                            |   |   | 5      |   |   | 9        |   |   | (12 | ) |
| Aviation                  Lease Finance                                                            |   |   | 27     |   |   | 6        |   |   | - |   |
| Thomas                  Hardie Commercials Ltd                                                     |   |   | 8      |   |   | 5        |   |   | 3 |   |
| Merkavim                  Metal Works Ltd                                                          |   |   | 1      |   |   | 4        |   |   | 10 |   |
| Peach                  County Holdings                                                             |   |   | -      |   |   | (103     | )      |   | - |   |
| Other                  companies                                                                   |   |   | (12    | )      |   | (1       | )      |   | 15 |   |
| **Subtotal**                                                                                       |   |   | **29** |   |   | **(80**  | **)**  |   | **55** |   |
|                                                                                               |   |   |        |   |   |          |   |   |  |   |
| **Revaluation                  and write-down of shares**                                          |   |   |        |   |   |          |   |   |  |   |
| Peach                  County Holding                                                              |   |   | -      |   |   | (550     | )      |   | - |   |
| Other                  companies                                                                   |   |   | (2     | )      |   | (2       | )      |   | (2 | ) |
| **Subtotal**                                                                                       |   |   | **(2** | **)**  |   | **(552** | **)**  |   | **(2** | **)** |
|                                                                                               |   |   |        |   |   |          |   |   |  |   |
| **Gains                  (losses) on sale of shares in associated                  companies**     |   |   |        |   |   |          |   |   |  |   |
| Aviation                  Lease Finance                                                            |   |   | -      |   |   | 71       |   |   | - |   |
| Other                  companies                                                                   |   |   | -      |   |   | 4        |   |   | 8 |   |
| **Subtotal**                                                                                       |   |   | **0**  |   |   | **75**   |   |   | **8** |   |
| **Total                  income (loss) from investments in associated                  companies** |   |   | **27** |   |   | **(557** | **)**  |   | **61** |   |

**Note        10 Income from other investments **

| **Dividends                  received**                           |   | 2004   |    | 2005   |   | 2006   |   |
|-------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|
| Holdings                  of Volvo Technology Transfer1           |   |   | -       |   |   | 11     |   |   | - |   |
| Other                                                             |   |   | 11      |   |   | 2      |   |   | 2 |   |
| **Subtotal**                                                      |   |   | **11**  |   |   | **13** |   |   | **2** |   |
|                                                              |   |   |         |   |   |        |   |   |  |   |
| **Revaluation                  and write downs of shares**        |   |   |         |   |   |        |   |   |  |   |
| Scania                  AB                                        |   |   | 915     |   |   | -      |   |   | - |   |
| Henlys                  Group Plc                                 |   |   | (95     | )      |   | -      |   |   | - |   |
| Holdings                  of Volvo Technology Transfer1           |   |   | (13     | )      |   | -      |   |   | (7 | ) |
| Smith                  Land & Improvement (SABA Holding) |   |   | (22     | )      |   | -      |   |   | - |   |
| Other                                                             |   |   | (8      | )      |   | (2     | )      |   | 11 |   |
| **Subtotal**                                                      |   |   | **777** |   |   | **(2** | **)**  |   | **4** |   |
|                                                              |   |   |         |   |   |        |   |   |  |   |
| **Gain                  (loss) on divestment of shares**     |   |   |         |   |   |        |   |   |  |   |
| Holdings                  of Volvo Technology Transfer1           |   |   | 1       |   |   | 40     |   |   | 130 |   |
| Bilia                  AB                                         |   |   | 24      |   |   | -      |   |   | - |   |
| Other                                                             |   |   | 17      |   |   | (14    | )      |   | 5 |   |
| **Subtotal**                                                      |   |   | **42**  |   |   | **26** |   |   | **135** |   |
| **Total**                                                         |   |   | **830** |   |   | **37** |   |   | **141** |   |

**Note        11 Other financial income and expenses **

| SEK                  M                                                             |   | 2004   |       | 2005   |   | 2006    |   |
|------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|---------|--------|
| Financial                  instruments at fair value through profit or loss        |   |   | -          |   |   | 251     |   |   | (61 | ) |
| Exchange                  rate gains and losses on financial assets and liabilites |   |   | (1         | )      |   | (20     | )      |   | (52 | ) |
| Financial                  income and expenses related to taxes                    |   |   | -          |   |   | 56      |   |   | (22 | ) |
| Write-down                  pertaining to the restructuring of Henleys Group Plc   |   |   | (1,196     | )      |   | -       |   |   | - |   |
| Costs                  for Treasury function, credit facilities, etc               |   |   | (13        | )      |   | (106    | )      |   | (46 | ) |
| **Total**                                                                          |   |   | **(1,210** | **)**  |   | **181** |   |   | **(181** | **)** |

----

**Note        12 Income taxes **

|                                                                       |   | 2004   |       | 2005   |   | 2006       |   |
|----------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Current                  taxes relating to the period                      |   |   | (1,854     | )      |   | (2,568     | )      |   | (4,559 | ) |
| Adjustment                  of current taxes for prior periods             |   |   | 288        |   |   | 147        |   |   | 176 |   |
| Deferred                  taxes originated or reversed during the period   |   |   | (1,662     | )      |   | (2,933     | )      |   | (2,116 | ) |
| Recognition and                  derecognition of deferred tax assets |   |   | 99         |   |   | 446        |   |   | 2,518 |   |
| **Total                  income taxes**                                    |   |   | **(3,129** | **)**  |   | **(4,908** | **)**  |   | **(3,981** | **)** |

| Due                  date  |   | 2004   |       | 2005   |   | 2006      |   |
|---------------------------------|--------|--------|------------|--------|--------|-----------|--------|
| Within                  1 year  |   |   | 200        |   |   | 400       |   |   | 500 |   |
| Within                  2 years |   |   | 700        |   |   | 500       |   |   | 100 |   |
| Within                  3 years |   |   | 600        |   |   | 100       |   |   | 100 |   |
| Within                  4 years |   |   | 300        |   |   | 300       |   |   | 0 |   |
| Within                  5 years |   |   | 200        |   |   | 100       |   |   | 200 |   |
| After                  6 years  |   |   | 8,100      |   |   | 4,700     |   |   | 5,000 |   |
| **Total **                 |   |   | **10,100** |   |   | **6,100** |   |   | **5,900** |   |

|                                                                       |   | 2004,                  % |   | 2005,                  % |   | 2006,                  % |   |
|----------------------------------------------------------------------------|--------|--------------------------|--------|--------------------------|--------|--------------------------|--------|
| Swedish                  corporate income tax rates                        |   |                     | 28     |                     |   | 28                       |   |   | 28 |   |
| Difference                  in tax rate in various countries               |   |                     | 3      |                     |   | 3                        |   |   | 2 |   |
| Capital                  gains                                             |   |                     | (3     | )                        |   | (1                       | )      |   | 0 |   |
| Other                  non-taxable income                                  |   |                     | (3     | )                        |   | (1                       | )      |   | (1 | ) |
| Other                  non-deductible expenses                             |   |                     | 2      |                     |   | 1                        |   |   | 4 |   |
| Adjustment                  of current taxes for prior years               |   |                     | (2     | )                        |   | (1                       | )      |   | (1 | ) |
| Recognition and                  derecognition of deferred tax assets |   |                     | (1     | )                        |   | (2                       | )      |   | (12 | ) |
| Other,                  net                                                |   |                     | 0      |                     |   | 0                        |   |   | 0 |   |
| **Income                  tax rate for the Group**                         |   |                     | **24** |                     |   | **27**                   |   |   | **20** |   |

**Reversal        of reserve for deferred tax receivables **

| **Specification                  of deferred tax assets and tax liabilities**                      |   | 2004   |       | 2005   |   | 2006       |   |
|----------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Deferred                  tax assets:                                                              |   |   |       |   |   |       |   |
|   Unused                  tax loss carryforwards                                         |   |   | 3,223      |   |   | 2,125      |   |   | 1,935 |   |
|   Other                  unused tax credits                                              |   |   | 259        |   |   | 295        |   |   | 248 |   |
|                     Intercompany profit in inventories                              |   |   | 294        |   |   | 544        |   |   | 526 |   |
|   Valuation                  allowance for                                               |   |   |            |   |   |            |   |   |  |   |
|   doubtful                  receivables                                                  |   |   | 587        |   |   | 644        |   |   | 463 |   |
|   Provisions                  for warranties                                             |   |   | 966        |   |   | 1,449      |   |   | 1,357 |   |
|   Provision                  for residual value risks                                    |   |   | 544        |   |   | 576        |   |   | 398 |   |
|   Provisions                  for                                                        |   |   |            |   |   |            |   |   |  |   |
|   post-employment benefits                                                          |   |   | 4,366      |   |   | 4,541      |   |   | 2,701 |   |
|   Provisions                  for restructuring measures                                 |   |   | 220        |   |   | 120        |   |   | 17 |   |
|   Fair                  value of derivative instruments:                                 |   |   |            |   |   |            |   |   |  |   |
|   Change                  of hedge reserves                                              |   |   | -          |   |   | 224        |   |   | 3 |   |
|   Other                  deductible temporary differences                                |   |   | 2,347      |   |   | 2,670      |   |   | 2,634 |   |
| **Deferred                  tax assets before deduction for valuation                  allowance** |   |   | **12,806** |   |   | **13,188** |   |   | **10,282** |   |
|                                                                                               |   |   |            |   |   |            |   |   |  |   |
| Valuation                  allowance                                                               |   |   | (2,592     | )      |   | (2,972     | )      |   | (213 | ) |
| **Deferred                  tax assets after deduction for valuation                  allowance**  |   |   | **10,214** |   |   | **10,216** |   |   | **10,069** |   |
|                                                                                               |   |   |            |   |   |            |   |   |  |   |
| Deferred                  tax liabilities:                                                         |   |   |            |   |   |            |   |   |  |   |
|   Accelerated                  depreciation on property,                                 |   |   |            |   |   |            |   |   |  |   |
|   plant                  and equipment                                                   |   |   | 2,047      |   |   | 2,347      |   |   | 2,514 |   |
|   Accelerated                  depreciation                                              |   |   |            |   |   |            |   |   |  |   |
|   on                  leasing assets                                                     |   |   | 815        |   |   | 1,297      |   |   | 1,226 |   |
|   LIFO                  valuation of inventories                                         |   |   | 160        |   |   | 217        |   |   | 182 |   |
|   Capitalized                  product and                                               |   |   |            |   |   |            |   |   |  |   |
|   software                  development                                                  |   |   | 1,445      |   |   | 1,970      |   |   | 2,113 |   |
|   Untaxed                  reserves                                                      |   |   | 126        |   |   | 112        |   |   | 635 |   |
|   Fair                  value of derivative instruments:                                 |   |   |            |   |   |            |   |   |  |   |
|   Change                  of hedge reserves                                              |   |   | -          |   |   | 95         |   |   | 268 |   |
|   Other                  taxable temporary differences                                   |   |   | 1,058      |   |   | 1,111      |   |   | 890 |   |
| **Deferred                  tax liabilities**                                                      |   |   | **5,651**  |   |   | **7,149**  |   |   | **7,828** |   |
| **Deferred                  tax assets, net 1**                                                    |   |   | **4,563**  |   |   | **3,067**  |   |   | **2,241** |   |

----

**Note        13 Minority interests **

**Note        14 Intangible and tangible assets**

| **Intangible                    assets,**Acquisition costs |   | Goodwill                  1 |      | Entrances                  fees, aircraft engine programs |   | Product                  and software development |   | Other                  intangible assets |       | **Total                  intangible assets** |   |
|------------------------------------------------------------|--------|-----------------------------|-----------|-----------------------------------------------------------|--------|---------------------------------------------------|--------|------------------------------------------|------------|----------------------------------------------|--------|
| Value                  in balance sheet 2004               |   |                        | 10,321    |                                                      |   | 2,758                                             |   |                                     | 8,585      |                                         |   | 1,734 |   |   | **23,398** |   |
| Value                  in balance sheet 2005               |   |                        | 11,072    |                                                      |   | 2,971                                             |   |                                     | 11,817     |                                         |   | 1,784 |   |   | **27,644** |   |
| Capital                  expenditures                      |   |                        | -         |                                                      |   | 121                                               |   |                                     | 2,917      |                                         |   | 28 |   |   | **3,066** |   |
| Adjustment                  of goodwill                    |   |                        | (1,712    | )                                                         |   | -                                                 |   |                                     | -          |                                         |   | - |   |   | **(1,712** | **)** |
| Sales/scrapping                                            |   |                        | 0         |                                                      |   | (11                                               | )      |                                     | (203       | )                                            |   | (13 | ) |   | **(227** | **)** |
| Acquired                  and divested operations3         |   |                        | 0         |                                                      |   | 0                                                 |   |                                     | 0          |                                         |   | (6 | ) |   | **(6** | **)** |
| Translation                  differences                   |   |                        | (420      | )                                                         |   | 0                                                 |   |                                     | (257       | )                                            |   | (108 | ) |   | **(785** | **)** |
| Reclassifications                  and other               |   |                        | (91       | )                                                         |   | (168                                              | )      |                                     | 14         |                                         |   | 327 |   |   | **82** |   |
| **Value                  in balance sheet 2006**           |   |                        | **8,849** |                                                      |   | **2,913**                                         |   |                                     | **14,288** |                                         |   | **2,012** |   |   | **28,062** |   |

| **Accumulated                  depreciation and amortization**  |   | Goodwill |      | Entrances                  fees, aircraft engine programs |   | Product                  and software development |   | Other                  intangible assets |      | **Total                  intangible assets** |   |
|-----------------------------------------------------------------|--------|----------|-----------|-----------------------------------------------------------|--------|---------------------------------------------------|--------|------------------------------------------|-----------|----------------------------------------------|--------|
| Value                  in balance sheet 2004                    |   |     | -         |                                                      |   | 1,386                                             |   |                                     | 3,413     |                                         |   | 987 |   |   | **5,786** |   |
| Value                  in balance sheet 2005                    |   |     | -         |                                                      |   | 1,437                                             |   |                                     | 4,690     |                                         |   | 1,096 |   |   | **7,223** |   |
| Depreciation                  and amortization                  |   |     | -         |                                                      |   | 128                                               |   |                                     | 1,584     |                                         |   | 138 |   |   | **1,850** |   |
| Write-downs                                                     |   |     | -         |                                                      |   | -                                                 |   |                                     | 80        |                                         |   | - |   |   | **80** |   |
| Sales/scrapping                                                 |   |     | -         |                                                      |   | 0                                                 |   |                                     | (160      | )                                            |   | (12 | ) |   | (172 | ) |
| Acquired                  and divested operations 3             |   |     | -         |                                                      |   | 0                                                 |   |                                     | -         |                                         |   | (4 | ) |   | (4 | ) |
| Translation                  differences                        |   |     | -         |                                                      |   | 0                                                 |   |                                     | (72       | )                                            |   | (49 | ) |   | (121 | ) |
| Reclassifications                  and other                    |   |     | -         |                                                      |   | 164                                               |   |                                     | (17       | )                                            |   | (58 | ) |   | **89** |   |
| **Value                  in balance sheet 2006**                |   |     | -         |                                                      |   | **1,729**                                         |   |                                     | **6,105** |                                         |   | **1,111** |   |   | **8,945** |   |
| **Net                  carrying value in balance sheet 2006 4** |   |     | **8,849** |                                                      |   | **1,184**                                         |   |                                     | **8,183** |                                         |   | **901** |   |   | **19,117** |   |

----

| **Tangible                  assets, Acquisition costs** |   |  Buildings |       | Land                  and land improvements |   |  Machinery                  and equipment (2 |   | Construction                  in progress, including advance payments |       | **Total                  property, plant and equipment** |   |  Assets                  under operating leases |   |  **Total                  tangible assets** |       |
|---------------------------------------------------------|--------|-----------------|------------|---------------------------------------------|--------|---------------------------------------------------|--------|-----------------------------------------------------------------------|------------|----------------------------------------------------------|--------|------------------------------------------------------|--------|--------------------------------------------------|------------|
| Value                  in balance sheet 2004            |   |            | 16,928     |                                        |   | 3,988                                             |   |                                                                  | 39,530     |                                                     |   | 2,435                                                |   |                                             | **62,881** |   |   | 30,999 |   |   | **93,880** |   |
| Value                  in balance sheet 2005            |   |            | 18,547     |                                        |   | 4,624                                             |   |                                                                  | 45,252     |                                                     |   | 3,067                                                |   |                                             | **71,490** |   |   | 31,999 |   |   | **103,489** |   |
| Capital                  expenditures                   |   |            | 1,031      |                                        |   | 175                                               |   |                                                                  | 3,941      |                                                     |   | 1,210                                                |   |                                             | **6,357**  |   |   | 4,611 |   |   | **10,968** |   |
| Sales/scrapping                                         |   |            | (483       | )                                           |   | (106                                              | )      |                                                                  | (2,618     | )                                                        |   | 4                                                    |   |                                             | **(3,203** | **)** |   | (5,686 | ) |   | (8,889 | ) |
| Acquired                  and divested operations 3     |   |            | (164       | )                                           |   | (3                                                | )      |                                                                  | (218       | )                                                        |   | -                                                    |   |                                             | **(385**   | **)** |   | (593 | ) |   | (978 | ) |
| Translation                  differences                |   |            | (808       | )                                           |   | (201                                              | )      |                                                                  | (1,889     | )                                                        |   | (164                                                 | )      |                                             | **(3,062** | **)** |   | (1,202 | ) |   | (4,264 | ) |
| Reclassifications                  and other            |   |            | 461        |                                        |   | (42                                               | )      |                                                                  | 226        |                                                     |   | (1,049                                               | )      |                                             | **(404**   | **)** |   | 1,026 |   |   | **622** |   |
| **Value                  in balance sheet 2006**        |   |            | **18,584** |                                        |   | **4,447**                                         |   |                                                                  | **44,694** |                                                     |   | **3,068**                                            |   |                                             | **70,793** |   |   | **30,155** |   |   | **100,948** |   |

| **Accumulated                  depreciation and amortization**  |   | Buildings |       | Land                  and land improvements |   | Machinery                  and equipment (2 |   | Construction                  in progress, including advance payments |       | **Total                  property, plant and equipment** |   | Assets                  under operating leases |   | **Total                  tangible assets** |       |
|-----------------------------------------------------------------|--------|-----------|------------|---------------------------------------------|--------|---------------------------------------------|--------|-----------------------------------------------------------------------|------------|----------------------------------------------------------|--------|------------------------------------------------|--------|--------------------------------------------|------------|
| Value                  in balance sheet 2004                    |   |      | 6,732      |                                        |   | 441                                         |   |                                                                  | 24,557     |                                                     |   | -                                              |   |                                       | **31,730** |   |   | 11,465 |   |   | **43,195** |   |
| Value                  in balance sheet 2005                    |   |      | 7,814      |                                        |   | 521                                         |   |                                                                  | 28,087     |                                                     |   | -                                              |   |                                       | **36,422** |   |   | 11,160 |   |   | **47,582** |   |
| Depreciation                  and amortization 5                |   |      | 704        |                                        |   | 46                                          |   |                                                                  | 3,744      |                                                     |   | -                                              |   |                                       | **4,494**  |   |   | 4,247 |   |   | **8,741** |   |
| Sales/scrapping                                                 |   |      | (498       | )                                           |   | (8                                          | )      |                                                                  | (1,976     | )                                                        |   | -                                              |   |                                       | **(2,482** | **)** |   | (3,223 | ) |   | **(5,705** | **)** |
| Acquired                  and divested operations 3             |   |      | (130       | )                                           |   | (9                                          | )      |                                                                  | (138       | )                                                        |   | -                                              |   |                                       | **(277**   | **)** |   | (224 | ) |   | **(501** | **)** |
| Translation                  differences                        |   |      | (321       | )                                           |   | (31                                         | )      |                                                                  | (1,132     | )                                                        |   | -                                              |   |                                       | **(1,484** | **)** |   | 168 |   |   | **(1,316** | **)** |
| Reclassifications                  and other                    |   |      | 23         |                                        |   | 8                                           |   |                                                                  | (290       | )                                                        |   | -                                              |   |                                       | **(259**   | **)** |   | (2,474 | ) |   | **(2,733** | **)** |
| **Value                  in balance sheet 2006**                |   |      | **7,592**  |                                        |   | **527**                                     |   |                                                                  | **28,295** |                                                     |   | **-**                                          |   |                                       | **36,414** |   |   | **9,654** |   |   | **46,068** |   |
| **Net                  carrying value in balance sheet 2006 4** |   |      | **10,992** |                                        |   | **3,920**                                   |   |                                                                  | **16,399** |                                                     |   | **3,068**                                      |   |                                       | **34,379** |   |   | **20,501** |   |   | **54,880** |   |

| **Depreciation                  and amortization by type of asset**      |   | 2004   |       | 2005   |   | 2006      |   |
|--------------------------------------------------------------------------|--------|--------|------------|--------|--------|-----------|--------|
| Intangible                  assets                                       |   |   | 1,396      |   |   | 1,409     |   |   | 1,930 |   |
| Property,                  plant and equipment                           |   |   | 4,182      |   |   | 4,370     |   |   | 4,494 |   |
| Assets                  under operating leases                           |   |   | 4,425      |   |   | 4,115     |   |   | 4,247 |   |
| **Depreciations                  excluding adjustment of goodwill** |   |   | **10,003** |   |   | **9,894** |   |   | **10,671** |   |
|                                                                     |   |   |            |   |   |           |   |   |  |   |
| Adjustment                  of goodwill                                  |   |   | -          |   |   | -         |   |   | 1,712 |   |
| **Total**                                                                |   |   | **10,003** |   |   | **9,894** |   |   | **12,383** |   |

| **Capital                  expenditures by type of asset** |   | 2004   |       | 2005   |   | 2006       |   |
|------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Intangible                  assets                         |   |   | 2,287      |   |   | 3,473      |   |   | 3,066 |   |
| Property,                  plant and equipment             |   |   | 5,790      |   |   | 6,829      |   |   | 6,357 |   |
| Assets                  under operating leases             |   |   | 4,406      |   |   | 4,549      |   |   | 4,611 |   |
| **Total**                                                  |   |   | **12,483** |   |   | **14,851** |   |   | **14,034** |   |

----

**Goodwill        **

| **Goodwill                  per Business Area** |   | 2005   |       | 2006   |   |
|-------------------------------------------------|--------|--------|------------|--------|--------|
| Volvo                  Trucks                   |   |   | 4,096      |   |   | 3,129 |   |
| Renault                  Trucks                 |   |   | 2,007      |   |   | 1,391 |   |
| Mack                  Trucks                    |   |   | 982        |   |   | 592 |   |
| Buses                                           |   |   | 1,134      |   |   | 1,055 |   |
| Construction                  Equipment         |   |   | 2,480      |   |   | 2,329 |   |
| Other                                           |   |   | 373        |   |   | 353 |   |
| **Total                  goodwill value**       |   |   | **11,072** |   |   | **8,849** |   |

**Investment        property**

----

**Note        15 Shares and participations**

| **Group                  holdings of shares**                                                                                                           |   |         |        |       |   | Dec                  31, 2004   |   | Dec                  31, 2005   |      | Dec                  31, 2006   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|------------|--------|---------------------------------|--------|---------------------------------|-----------|---------------------------------|--------|
| **and                  participations**                                                                                                                 |   | Registration |        | Percentage |   | Carrying                  value |   | Carrying                  value |      | Carrying                  value |   |
| **in                  non-Group companies**                                                                                                             |   | number       |        | holding    |   | SEK                  M          |   | SEK                  M          |      | SEK                  M          |   |
| **Shares                  in associated companies, equity method of                  accounting**                                                       |   |         |        |       |   |                            |   |                            |      |                            |   |
| Nissan                  Diesel                                                                                                                          |   |         | -           |       |   | 19                              |   |                            | -         |                            |   | - |   |   | 5,445 |   |
| Blue                  Chip Jet II HB, Sweden                                                                                                            |   |         | 969717-2105 |       |   | 50                              |   |                            | -         |                            |   | - |   |   | 148 |   |
| Blue                  Chip Jet HB, Sweden                                                                                                               |   |         | 969639-1011 |       |   | 40                              |   |                            | 90        |                            |   | 85 |   |   | 81 |   |
| Merkavim                  Metal Works Ltd, Israel                                                                                                       |   |         | -           |       |   | 27                              |   |                            | 20        |                            |   | 26 |   |   | 34 |   |
| Diamond                  Finance Ltd, Great Britain                                                                                                     |   |         | -           |       |   | 40                              |   |                            | -         |                            |   | 23 |   |   | 24 |   |
| Thomas                  Hardie Commercials Ltd, Great Britain                                                                                           |   |         | -           |       |   | 24                              |   |                            | 10        |                            |   | 14 |   |   | 14 |   |
| Fonderie                  Venissieu, France                                                                                                             |   |         | -           |       |   | 49                              |   |                            | 15        |                            |   | 21 |   |   | 23 |   |
| Quingdao                  Sunwin Bus Corp, China                                                                                                        |   |         |             |       |   | 21                              |   |                            | -         |                            |   | 9 |   |   | 9 |   |
| Arabian                  Vehicle & Truck Industry Ltd, Saudi Arabia                                                                                 |   |         | -           |       |   | 25                              |   |                            | 9         |                            |   | 9 |   |   | 9 |   |
| Peach                  County Holdings Inc, USA                                                                                                         |   |         | -           |       |   | 43                              |   |                            | 556       |                            |   | 0 |   |   | - |   |
| Aviation                  Lease Finance, USA                                                                                                            |   |         | -           |       |   | 49                              |   |                            | 172       |                            |   | - |   |   | - |   |
| Småföretagarinvest                  AB (previously Arbustum Invest AB), Sweden                                                                |   |         | -           |       |   | -                               |   |                            | 35        |                            |   | - |   |   | - |   |
| Other                  holdings                                                                                                                         |   |         |             |       |   |                                 |   |                            | 6         |                            |   | 8 |   |   | 7 |   |
| **Total                  shares and participations in associated companies in accordance                  with Group                  Balance Sheet 1** |   |         |             |       |   |                                 |   |                            | **913**   |                            |   | **195** |   |   | **5,794** |   |
|                                                                                                                                                    |   |         |             |       |   |                                 |   |                            |           |                            |   |  |   |   |  |   |
| **Shares                  and participations in other companies**                                                                                       |   |         |             |       |   |                                 |   |                            |           |                            |   |  |   |   |  |   |
| Deutz                  AG, Germany 2                                                                                                                    |   |         | -           |       |   | 7                               |   |                            | 670       |                            |   | 253 |   |   | 740 |   |
| Småföretagarinvest                  AB (previously Arbustum Invest AB), Sweden                                                                |   |         | 556543-4247 |       |   | 17                              |   |                            | -         |                            |   | 32 |   |   | 14 |   |
| Other                  holdings                                                                                                                         |   |         |             |       |   |                                 |   |                            | 420       |                            |   | 271 |   |   | 342 |   |
| **Total                  shares and participations in other companies in accordance with                  Group                  Balance Sheet**        |   |         |             |       |   |                                 |   |                            | **1,090** |                            |   | **556** |   |   | **1,096** |   |
| **Total                  value of Group holdings of shares and participations in non-group                  companies**                                 |   |         |             |       |   |                                 |   |                            | **2,003** |                            |   | **751** |   |   | **6,890** |   |

|                                                                                                                                                                                                                                            |   | Carrying                  value |                          | Market                  value |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------------------------|-------------------------------|--------|
| Nissan                  Diesel, common shares                                                                                                                                                                                                   |   |                            | 1,952                         |                          |   | 1,341 |   |
| Nissan                  Diesel, preference shares                                                                                                                                                                                               |   |                            | 3,493                         |                          |   | - |   |
| **Total                  holding in listed associated companies**                                                                                                                                                                               |   |                            | **5,445**                     |                          |   | **1,341** |   |
|                                                                                                                                                                                                                                            |   |                            |                               |                          |   |  |   |
| Holding                  in non-listed associated companies                                                                                                                                                                                     |   |                            | 349                           |                          |   | - |   |
| **Total                  holding in associated companies**                                                                                                                                                                                      |   |                            | **5,794**                     |                          |   | **1,341** |   |
|                                                                                                                                                                                                                                            |   |                            |                               |                          |   |  |   |
|                                                                                                                                                                                                                                            |   |                            |                               |                          |   |  |   |
|                                                                                                                                                                                                                                            |   |                            | Carrying                value |                          |   | Market                  value |   |
| Deutz                  AG                                                                                                                                                                                                                       |   |                            | 740                           |                          |   | 740 |   |
| **Total                  holdings in listed companies**                                                                                                                                                                                         |   |                            | **740**                       |                          |   | **740** |   |
|                                                                                                                                                                                                                                            |   |                            |                               |                          |   |  |   |
| Holdings                  in non-listed companies 1                                                                                                                                                                                             |   |                            | 356                           |                          |   | - |   |
| **Total                  shares and participations in other companies**                                                                                                                                                                         |   |                            | **1,096**                     |                          |   | **740** |   |
| 1                  Unlisted shares, for which a reliable fair value cannot be                  determined, should be reported at the acquisition value reduced                  in                  appropriate cases by write-downs. |

**Nissan        Diesel **

----

**Notes        to consolidated financial statements**

**Deutz        **

**Peach        County Holdings Inc**

**Småföretagarinvest        AB (previously Arbustum Invest AB)**

| **Changes                  in the Volvo Group’s holdings of shares and                  participations:** |   | 2004   |      | 2005   |   | 2006    |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|---------|--------|
| Balance                  sheet, December 31, preceding year                                                     |   |   | 22,206    |   |   | 2,003   |   |   | 751 |   |
| IFRS                  transition effect                                                                         |   |   | -         |   |   | (494    | )      |   | - |   |
| Acquisitions                  and divestments, net                                                              |   |   | (20,740   | )      |   | (268    | )      |   | 5,809 |   |
| Net                  of write-downs/revaluations                                                                |   |   | 772       |   |   | (552    | )      |   | (72 | ) |
| New                  issue of shares and shareholders’ contributions                                      |   |   | 45        |   |   | 28      |   |   | 45 |   |
| Share                  of income in associated companies                                                        |   |   | 29        |   |   | (80     | )      |   | 55 |   |
| Change                  in Group structure                                                                      |   |   | (280      | )      |   | (90     | )      |   | 0 |   |
| Fair                  value of shares                                                                           |   |   | -         |   |   | 83      |   |   | 392 |   |
| Translation                  differences                                                                        |   |   | (29       | )      |   | 159     |   |   | (30 | ) |
| Dividends                                                                                                       |   |   | 0         |   |   | (2      | )      |   | (3 | ) |
| Other                                                                                                           |   |   | 0         |   |   | (36     | )      |   | (57 | ) |
| **Balance                  sheet, December 31**                                                                 |   |   | **2,003** |   |   | **751** |   |   | **6,890** |   |

**Note        16 Long-term customer-financing receivables **

|                                 |   | 2004   |       | 2005   |   | 2006       |   |
|--------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Installment                  credits |   |   | 14,726     |   |   | 17,865     |   |   | 17,475 |   |
| Financial                  leasing   |   |   | 10,334     |   |   | 12,737     |   |   | 13,980 |   |
| Other                  receivables   |   |   | 127        |   |   | 582        |   |   | 634 |   |
| **Total**                            |   |   | **25,187** |   |   | **31,184** |   |   | **32,089** |   |

| Long-term                  customer finance receivables maturities |   |   |       |
|--------------------------------------------------------------------|--------|--------|------------|
| 2008                                                               |   |   | 14,205     |   |
| 2009                                                               |   |   | 9,631      |   |
| 2010                                                               |   |   | 5,402      |   |
| 2011                                                               |   |   | 1,944      |   |
| 2012                  or later                                     |   |   | 907        |   |
| **Total**                                                          |   |   | **32,089** |   |

----

**Note        17 Other long-term receivables **

|                                             |   | 2004   |      | 2005   |   | 2006      |   |
|--------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Other                  loans to external parties |   |   | 720       |   |   | 348       |   |   | 300 |   |
| Prepaid                  pensions                |   |   | 364       |   |   | 524       |   |   | 2,041 |   |
| Other                  financial receivables     |   |   | 672       |   |   | 1,514     |   |   | 1,394 |   |
| Other                  receivables               |   |   | 1,007     |   |   | 741       |   |   | 665 |   |
| **Total**                                        |   |   | **2,763** |   |   | **3,127** |   |   | **4,400** |   |

**Note        18 Inventories **

|                                        |   | 2004   |       | 2005   |   | 2006       |   |
|---------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Finished                  products          |   |   | 17,861     |   |   | 21,617     |   |   | 20,396 |   |
| Production                  materials, etc. |   |   | 10,737     |   |   | 12,320     |   |   | 13,815 |   |
| **Total**                                   |   |   | **28,598** |   |   | **33,937** |   |   | **34,211** |   |

| **Increase                  (decrease) in allowance for inventory                  obsolescence** |   | 2004   |      | 2005   |   | 2006      |   |
|--------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Balance                  sheet, December 31, preceding year                                            |   |   | 2,246     |   |   | 2,124     |   |   | 2,401 |   |
| Increase                  in allowance for inventory obsolescence charged to income                    |   |   | 244       |   |   | 333       |   |   | 186 |   |
| Scrapping                                                                                              |   |   | (226      | )      |   | (276      | )      |   | (169 | ) |
| Translation                  differences                                                               |   |   | (85       | )      |   | 177       |   |   | (130 | ) |
| Reclassifications,                  etc.                                                               |   |   | (55       | )      |   | 43        |   |   | (273 | ) |
| **Balance                  sheet, December 31**                                                        |   |   | **2,124** |   |   | **2,401** |   |   | **2,015** |   |

**Note        19 Short-term customer-financing receivables **

|                                 |   | 2004   |       | 2005   |   | 2006       |   |
|--------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Installment                  credits |   |   | 10,382     |   |   | 13,174     |   |   | 12,034 |   |
| Financial                  leasing   |   |   | 5,488      |   |   | 7,132      |   |   | 7,493 |   |
| Dealer financing                |   |   | 8,850      |   |   | 12,067     |   |   | 11,703 |   |
| Other                  receivables   |   |   | 1,286      |   |   | 909        |   |   | 1,423 |   |
| **Total**                            |   |   | **26,006** |   |   | **33,282** |   |   | **32,653** |   |

**Note        20 Other short-term receivables **

|                                                                                                                  |   | 2004   |       | 2005   |   | 2006       |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Accounts                  receivable                                                                                  |   |   | 20,137     |   |   | 24,784     |   |   | 23,251 |   |
| Prepaid                  expenses and accrued income                                                                  |   |   | 2,514      |   |   | 2,502      |   |   | 2,263 |   |
| VAT                  receivables                                                                                      |   |   | 1,561      |   |   | 1,933      |   |   | 2,280 |   |
| Loans                  to external parties                                                                            |   |   | 1,350      |   |   | 345        |   |   | 537 |   |
| Other                  financial receivables 1                                                                        |   |   | 981        |   |   | 1,671      |   |   | 2,344 |   |
| Other                  receivables                                                                                    |   |   | 3,321      |   |   | 4,229      |   |   | 3,724 |   |
| **Total,                  after deduction of valuation allowances for doubtful accounts                  receivable** |   |   | **29,864** |   |   | **35,464** |   |   | **34,399** |   |

----

**Notes        to consolidated financial statements**

| **Change                  of valuation allowances for doubtful accounts                  receivable** |   | 2004   |    | 2005   |   | 2006    |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Balance                  sheet, December 31, preceding year                                           |   |   | 932     |   |   | 837     |   |   | 906 |   |
| Change                  of valuation allowance charged to income                                      |   |   | (30     | )      |   | 2       |   |   | 144 |   |
| Utilization                  of valuation allowance related to actual losses                          |   |   | (174    | )      |   | (90     | )      |   | (108 | ) |
| Acquired                  and divested operations                                                     |   |   | 1       |   |   | 9       |   |   | 45 |   |
| Translation                  differences                                                              |   |   | 17      |   |   | 95      |   |   | (39 | ) |
| Reclassifications,                  etc.                                                              |   |   | 91      |   |   | 53      |   |   | (9 | ) |
| **Balance                  sheet, December 31**                                                       |   |   | **837** |   |   | **906** |   |   | **939** |   |

**Note        21 Marketable securities **

|                                                |   | 2004   |       | 2005   |   | 2006       |   |
|-----------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Government                  securities              |   |   | 6,354      |   |   | 4,226      |   |   | 2,169 |   |
| Banks                  and financial institutions   |   |   | 371        |   |   | 464        |   |   | 7,101 |   |
| Real                  estate financial institutions |   |   | 19,220     |   |   | 24,020     |   |   | 11,072 |   |
| Other                                               |   |   | 10         |   |   | 124        |   |   | - |   |
| **Total**                                           |   |   | **25,955** |   |   | **28,834** |   |   | **20,342** |   |

**Note        22 Cash and cash equivalents **

|                                    |   | 2004   |      | 2005   |   | 2006      |   |
|-----------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Cash                  in banks          |   |   | 5,787     |   |   | 5,652     |   |   | 6,702 |   |
| Time                  deposits in banks |   |   | 3,004     |   |   | 2,461     |   |   | 4,055 |   |
| **Total**                               |   |   | **8,791** |   |   | **8,113** |   |   | **10,757** |   |

**Note        23 Shareholders’ equity **

----

| **Information                  regarding shares**           |   | **2004** |            | **2005** |   | **2006**        |   |
|-------------------------------------------------------------|--------|----------|-----------------|----------|--------|-----------------|--------|
| Own                  Series A shares                        |   |     | 7,075,246       |     |   | 4,145,627       |   |   | 4,145,627 |   |
| Own                  Series B shares                        |   |     | 24,315,797      |     |   | 17,074,908      |   |   | 16,739,827 |   |
| **Total                  own shares**                       |   |     | **31,391,043**  |     |   | **21,220,535**  |   |   | **20,885,454** |   |
|                                                        |   |     |                 |     |   |                 |   |   |  |   |
| Own                  shares in % of total registered shares |   |     | 7,1             |     |   | 5,0             |   |   | 4,9 |   |
|                                                        |   |     |                 |     |   |                 |   |   |  |   |
| Outstanding                  Series A shares                |   |     | 131,529,699     |     |   | 131,374,699     |   |   | 131,374,699 |   |
| Outstanding                  Series B shares                |   |     | 278,600,143     |     |   | 273,088,810     |   |   | 273,423,891 |   |
| **Total                  outstanding shares**               |   |     | **410,129,842** |     |   | **404,463,509** |   |   | **404,798,590** |   |
|                                                        |   |     |                 |     |   |                 |   |   |  |   |
| Total                  registered Series A shares           |   |     | 138,604,945     |     |   | 135,520,326     |   |   | 135,520,326 |   |
| Total                  registered Series B shares           |   |     | 302,915,940     |     |   | 290,163,718     |   |   | 290,163,718 |   |
| **Total                  registered shares**                |   |     | **441,520,885** |     |   | **425,684,044** |   |   | **425,684,044** |   |
|                                                        |   |     |                 |     |   |                 |   |   |  |   |
| Average                  number of outstanding shares       |   |     | 418,528,078     |     |   | 405,242,037     |   |   | 404,663,051 |   |

| **Changes                  in outstanding Volvo shares** |   |   |            |
|----------------------------------------------------------|--------|--------|-----------------|
| Balance                  December 31, 2005               |   |   | 404,463,509     |   |
| Share-based                  incentive program           |   |   | 335,081         |   |
|                                                     |   |   | **404,798,590** |   |

| **Change                  in other reserves**                              |   | Hedgereserve |    | Available                  for sale-reserve |   | Total   |   |
|----------------------------------------------------------------------------|--------|--------------|---------|---------------------------------------------|--------|---------|--------|
| Balance                  at January 1, 2006                                |   |         | (411    | )                                           |   | 83      |   |   | (328 | ) |
| Fair                  value gains in year                                  |   |         | 2,583   |                                        |   | -       |   |   | 2,583 |   |
| Tax                  on fair value gains                                   |   |         | (723    | )                                           |   | -       |   |   | (723 | ) |
| Transfers                  to income                                       |   |         | (1,122  | )                                           |   | -       |   |   | (1,122 | ) |
| Tax                  on transfers to income statement                      |   |         | 314     |                                        |   | -       |   |   | 314 |   |
| Change                  in fair value of commodity contracts               |   |         | (53     | )                                           |   | -       |   |   | (53 | ) |
| Fair                  value adjustments regarding holding in Deutz         |   |         | -       |                                        |   | 392     |   |   | 392 |   |
| Fair                  value adjustments regarding holding in Nissan Diesel |   |         | -       |                                        |   | (9      | )      |   | (9 | ) |
| Other                                                                      |   |         | (67     | )                                           |   | -       |   |   | (67 | ) |
| **Balance                  at December 31, 2006**                          |   |         | **521** |                                        |   | **466** |   |   | **987** |   |

**Earnings        per share**

|                                                                    |   | 2005   |    | 2006   |   |
|-------------------------------------------------------------------------|--------|--------|---------|--------|--------|
| Number                  of shares, December 31, in millions             |   |   | 404.5   |   |   | 404.8 |   |
| Average                  number of shares before dilution in millions   |   |   | 405.2   |   |   | 404.7 |   |
| Average                  number of shares after dilution in millions    |   |   | 405.9   |   |   | 405.0 |   |
| Average                  share price, SEK                               |   |   | 319,11  |   |   | 391,94 |   |
|                                                                    |   |   |         |   |   |  |   |
| Net                  income attributable to Parent Company shareholders |   |   | 13,054  |   |   | 16,268 |   |
| Basic                  earnings per share                               |   |   | 32.22   |   |   | 40.20 |   |
| Diluted                  earnings per share                             |   |   | 32.16   |   |   | 40.17 |   |
|                                                                    |   |   |         |   |   |  |   |
| Dilution                  effect, number of shares                      |   |   |         |   |   |  |   |
| Share-based                  incentive program                          |   |   | 166,250 |   |   | 72,583 |   |
| Employee                  stock option program                          |   |   | 459,241 |   |   | 242,900 |   |
| Number                  of potential shares, December 31                |   |   | 625,491 |   |   | 315,483 |   |

----

**Note        24 Provisions for post-employment benefits **

| **Summary                    of provision for post-employment benefits** |   | 2004   |        | 2005   |   | 2006        |   |
|--------------------------------------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|
| Obligations                                                              |   |   | 30,646      |   |   | 36,521      |   |   | 34,740 |   |
| Fair                  value of plan assets                               |   |   | 15,139      |   |   | 22,278      |   |   | 25,227 |   |
| **Funded                  status**                                       |   |   | **(15,507** | **)**  |   | **(14,243** | **)**  |   | **(9,513** | **)** |
|                                                                     |   |   |             |   |   |             |   |   |  |   |
| Unrecognized                  actuarial (gains) and losses               |   |   | 1,258       |   |   | 2,867       |   |   | 2,958 |   |
| Unrecognized                  past service costs                         |   |   | (83         | )      |   | (86         | )      |   | (96 | ) |
| **Net                  provisions for post-employment benefits**         |   |   | **(14,332** | **)**  |   | **(11,462** | **)**  |   | **(6,651** | **)** |

| **Assumptions                  applied for**      |   | 2004                         |   | 2005                         |   | 2006                         |   |
|---------------------------------------------------|--------|------------------------------|--------|------------------------------|--------|------------------------------|--------|
| **actuarial                  calculations**       |   | December                  31 |   | December                  31 |   | December                  31 |   |
| **Sweden**                                        |   |                         |   |                         |   |                         |   |
| Discount                  rate                    |   |                         | 5.00   |                         |   | 4.00                         |   |   | 4.00 |   |
| Expected                  return on plan assets 1 |   |                         | 6.00   |                         |   | 6.00                         |   |   | 6.00 |   |
| Expected                  salary increases        |   |                         | 3.20   |                         |   | 3.20                         |   |   | 3.20 |   |
| Inflation                                         |   |                         | 2.00   |                         |   | 1.50                         |   |   | 1.50 |   |
|                                              |   |                         |        |                         |   |                              |   |   |  |   |
| **United                  States**                |   |                         |        |                         |   |                              |   |   |  |   |
| Discount                  rate                    |   |                         | 5.75   |                         |   | 5.75                         |   |   | 5.50 |   |
| Expected                  return on plan assets 1 |   |                         | 7.65   |                         |   | 7.65                         |   |   | 7.65 |   |
| Expected                  salary increases        |   |                         | 3.50   |                         |   | 3.50                         |   |   | 3.50 |   |
| Inflation                                         |   |                         | 2.50   |                         |   | 2.50                         |   |   | 2.50 |   |
|                                              |   |                         |        |                         |   |                              |   |   |  |   |
| **France**                                        |   |                         |        |                         |   |                              |   |   |  |   |
| Discount                  rate                    |   |                         | 4.75   |                         |   | 4.00                         |   |   | 4.25 |   |
| Expected                  salary increases        |   |                         | 3.00   |                         |   | 3.00                         |   |   | 3.00 |   |
| Inflation                                         |   |                         | 2.00   |                         |   | 2.00                         |   |   | 2.00 |   |
|                                              |   |                         |        |                         |   |                              |   |   |  |   |
| **Great                  Britain**                |   |                         |        |                         |   |                              |   |   |  |   |
| Discount                  rate                    |   |                         | 5.25   |                         |   | 4.80                         |   |   | 5.00 |   |
| Expected                  return on plan assets 1 |   |                         | 6.25   |                         |   | 5.20-6.50                    |   |   | 5.00-5.80 |   |
| Expected                  salary increases        |   |                         | 3.50   |                         |   | 3.80-4.00                    |   |   | 4.00-4.60 |   |
| Inflation                                         |   |                         | 2.50   |                         |   | 2.75                         |   |   | 3.00 |   |

----

| **Pension                  costs**                            |   | 2004   |      | 2005   |   | 2006      |   |
|---------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Current                  year service costs                   |   |   | 616       |   |   | 788       |   |   | 870 |   |
| Interest                  costs                               |   |   | 1,306     |   |   | 1,315     |   |   | 1,285 |   |
| Expected                  return on plan assets               |   |   | (931      | )      |   | (1,133    | )      |   | (1,359 | ) |
| Actuarial                  gains and losses 1                 |   |   | (17       | )      |   | (107      | )      |   | 48 |   |
| Past                  service costs                           |   |   |           |   |   |           |   |   |  |   |
| -                  Unvested                                   |   |   | 7         |   |   | (4        | )      |   | (56 | ) |
| -                  Vested                                     |   |   | 38        |   |   | (20       | )      |   | 0 |   |
| Curtailments                  and settlements                 |   |   | (28       | )      |   | (362      | )      |   | (28 | ) |
| Termination                  benefits                         |   |   | 729       |   |   | 124       |   |   | 135 |   |
| **Pension                  costs for defined benefit plans**  |   |   | **1,720** |   |   | **601**   |   |   | **895** |   |
|                                                          |   |   |           |   |   |           |   |   |  |   |
| Pension                  costs for defined contribution plans |   |   | 2,681     |   |   | 3,135     |   |   | 2,844 |   |
| **Total                  pension costs**                      |   |   | **4,401** |   |   | **3,736** |   |   | **3,739** |   |

| **Costs                  for post-employment benefits other than pensions**                        |   | 2004   |    | 2005   |   | 2006    |   |
|----------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Current                  year service costs                                                        |   |   | 196     |   |   | 188     |   |   | 132 |   |
| Interest                  costs                                                                    |   |   | 349     |   |   | 323     |   |   | 348 |   |
| Expected                  return on plan assets                                                    |   |   | (12     | )      |   | (15     | )      |   | (4 | ) |
| Actuarial                  gains and losses 1                                                      |   |   | 6       |   |   | 1       |   |   | 1 |   |
| Past                  service costs                                                                |   |   |         |   |   |         |   |   |  |   |
| -                  Unvested                                                                        |   |   | (1      | )      |   | (1      | )      |   | (9 | ) |
| -                  Vested                                                                          |   |   | 5       |   |   | 4       |   |   | (17 | ) |
| Curtailments                  and settlements                                                      |   |   | -       |   |   | -       |   |   | 3 |   |
| Termination                  benefits                                                              |   |   | 47      |   |   | 24      |   |   | 8 |   |
| **Total                  costs for post-employment benefits other than                  pensions** |   |   | **590** |   |   | **524** |   |   | **462** |   |

| **Obligations                  in**                          |   |     |      | United   |   |       |   | Great    |      | US       |   |      |   |   |      |
|--------------------------------------------------------------|--------|----------|-----------|----------|--------|------------|--------|----------|-----------|----------|--------|-----------|--------|--------|-----------|
| **defined**                                                  |   | Sweden   |      | States   |   | France     |   | Britain  |      | Other    |   | Other     |   |   |      |
| **benefit                  plans**                           |   | Pensions |      | Pensions |   | Pensions   |   | Pensions |      | benefits |   | plans     |   | Total  |      |
| **Obligations                  at January 1, 2004**          |   |     | **5,332** |     |   | **10,707** |   |     | **2,333** |     |   | **2,986** |   |   | **6,278** |   |   | **1,595** |   |   | **29,231** |   |
| Acquisitions,                  divestments and other changes |   |     | 140       |     |   | -          |   |     | (85       | )        |   | 138       |   |   | -         |   |   | - |   |   | **193** |   |
| Current                  year service costs             |   |     | 176       |     |   | 206        |   |     | 19        |     |   | 82        |   |   | 193       |   |   | 136 |   |   | **812** |   |
| Interest                  costs                              |   |     | 280       |     |   | 668        |   |     | 115       |     |   | 172       |   |   | 348       |   |   | 72 |   |   | **1,655** |   |
| Unvested                  past service costs                 |   |     | -         |     |   | 3          |   |     | (66       | )        |   | -         |   |   | -         |   |   | - |   |   | **(63** | **)** |
| Vested                  past service costs                   |   |     | (46       | )        |   | 66         |   |     | -         |     |   | -         |   |   | -         |   |   | 22 |   |   | **42** |   |
| Termination                  benefits                        |   |     | 88        |     |   | -          |   |     | 205       |     |   | -         |   |   | -         |   |   | 483 |   |   | **776** |   |
| Curtailments                  and settlements                |   |     | (35       | )        |   | (5         | )      |     | -         |     |   | -         |   |   | -         |   |   | 35 |   |   | **(5** | **)** |
| Employee                  contributions                      |   |     | -         |     |   | -          |   |     | -         |     |   | 30        |   |   | -         |   |   | 1 |   |   | **31** |   |
| Actuarial                  (gains) and losses                |   |     | 573       |     |   | 683        |   |     | 74        |     |   | 215       |   |   | 364       |   |   | 39 |   |   | **1,948** |   |
| Exchange                  rate translation                   |   |     | -         |     |   | (1,103     | )      |     | (19       | )        |   | (76       | )      |   | (576      | ) |   | 29 |   |   | **(1,745** | **)** |
| Benefits                  paid                               |   |     | (271      | )        |   | (704       | )      |     | (497      | )        |   | (101      | )      |   | (532      | ) |   | (124 | ) |   | **(2,229** | **)** |
| **Obligations                  at December 31, 2004**        |   |     | **6,237** |     |   | **10,521** |   |     | **2,079** |     |   | **3,446** |   |   | **6,075** |   |   | **2,288** |   |   | **30,646** |   |

----

| **Obligations                  in****defined****benefit                      plans** |   |   | SwedenPensions |   |   | UnitedStatesPensions |   |   | FrancePensions |   |   | GreatBritainPensions |   |   | USOtherbenefits |   |   | Otherplans |   |   | Total      |   |
|--------------------------------------------------------------------------------------|--------|--------|----------------|--------|--------|----------------------|--------|--------|----------------|--------|--------|----------------------|--------|--------|-----------------|--------|--------|------------|--------|--------|------------|--------|
| Acquisitions,                  divestments and other changes                         |   |   | (125           | )      |   | 81                   |   |   | -              |   |   | -                    |   |   | 6               |   |   | (1         | )      |   | **(39**    | **)**  |
| Current                  year service costs                                          |   |   | 203            |   |   | 304                  |   |   | 37             |   |   | 80                   |   |   | 184             |   |   | 169        |   |   | **977**    |   |
| Interest                  costs                                                      |   |   | 303            |   |   | 637                  |   |   | 97             |   |   | 195                  |   |   | 321             |   |   | 83         |   |   | **1,636**  |   |
| Unvested                  past service costs                                         |   |   | -              |   |   | 3                    |   |   | -              |   |   | (12                  | )      |   | -               |   |   | -          |   |   | **(9**     | **)**  |
| Vested                  past service costs                                           |   |   | (72            | )      |   | 44                   |   |   | -              |   |   | -                    |   |   | 1               |   |   | 11         |   |   | **(16**    | **)**  |
| Termination                  benefits                                                |   |   | 104            |   |   | -                    |   |   | -              |   |   | -                    |   |   | -               |   |   | 44         |   |   | **148**    |   |
| Curtailments                  and settlements                                        |   |   | (371           | )      |   | -                    |   |   | -              |   |   | -                    |   |   | -               |   |   | -          |   |   | **(371**   | **)**  |
| Employee                  contributions                                              |   |   | -              |   |   | -                    |   |   | -              |   |   | 34                   |   |   | -               |   |   | (2         | )      |   | **32**     |   |
| Actuarial                  (gains) and losses                                        |   |   | 810            |   |   | 281                  |   |   | (12            | )      |   | 714                  |   |   | (66             | )      |   | 151        |   |   | **1,878**  |   |
| Exchange                  rate translation                                           |   |   | -              |   |   | 2,171                |   |   | 92             |   |   | 287                  |   |   | 1,222           |   |   | 238        |   |   | **4,010**  |   |
| Benefits                  paid                                                       |   |   | (248           | )      |   | (763                 | )      |   | (435           | )      |   | (109                 | )      |   | (592            | )      |   | (224       | )      |   | **(2,371** | **)**  |
| **Obligations                  at December 31, 2005**                                |   |   | **6,841**      |   |   | **13,279**           |   |   | **1,858**      |   |   | **4,635**            |   |   | **7,151**       |   |   | **2,757**  |   |   | **36,521** |   |
|                                                                                 |   |   |                |   |   |                      |   |   |                |   |   |                      |   |   |                 |   |   |            |   |   |            |   |
| of                  which                                                            |   |   |                |   |   |                      |   |   |                |   |   |                      |   |   |                 |   |   |            |   |   |            |   |
| Funded                  defined benefit plans                                        |   |   | 6,342          |   |   | 12,962               |   |   | -              |   |   | 4,135                |   |   | 3,772           |   |   | 1,744      |   |   | **28,955** |   |
|                                                                                 |   |   |                |   |   |                      |   |   |                |   |   |                      |   |   |                 |   |   |            |   |   |            |   |
| Acquisitions,                  divestments and other changes                         |   |   | (54            | )      |   | -                    |   |   | 14             |   |   | -                    |   |   | (44             | )      |   | 301        |   |   | **217**    |   |
| Current                  year service costs                                          |   |   | 248            |   |   | 246                  |   |   | 41             |   |   | 103                  |   |   | 104             |   |   | 190        |   |   | **932**    |   |
| Interest                  costs                                                      |   |   | 277            |   |   | 686                  |   |   | 70             |   |   | 220                  |   |   | 345             |   |   | 92         |   |   | **1,690**  |   |
| Unvested                  past service costs                                         |   |   | -              |   |   | 6                    |   |   | 2              |   |   | -                    |   |   | (8              | )      |   | -          |   |   | **-**      |   |
| Vested                  past service costs                                           |   |   | 4              |   |   | -                    |   |   | 8              |   |   | -                    |   |   | (17             | )      |   | 6          |   |   | **1**      |   |
| Termination                  benefits                                                |   |   | 122            |   |   | -                    |   |   | -              |   |   | -                    |   |   | -               |   |   | (2         | )      |   | **120**    |   |
| Curtailments                  and settlements                                        |   |   | (146           | )      |   | (15                  | )      |   | (4             | )      |   | -                    |   |   | 1               |   |   | (1         | )      |   | **(165**   | **)**  |
| Employee                  contributions                                              |   |   | -              |   |   | -                    |   |   | -              |   |   | 33                   |   |   | -               |   |   | -          |   |   | **33**     |   |
| Actuarial                  (gains) and losses                                        |   |   | 113            |   |   | 437                  |   |   | 10             |   |   | 173                  |   |   | 201             |   |   | 44         |   |   | **978**    |   |
| Exchange                  rate translation                                           |   |   | -              |   |   | (1,844               | )      |   | (69            | )      |   | (86                  | )      |   | (962            | )      |   | (213       | )      |   | **(3,174** | **)**  |
| Benefits                  paid                                                       |   |   | (263           | )      |   | (778                 | )      |   | (359           | )      |   | (91                  | )      |   | (572            | )      |   | (350       | )      |   | **(2,413** | **)**  |
| **Obligations                  at December 31, 2006**                                |   |   | **7,142**      |   |   | **12,017**           |   |   | **1,571**      |   |   | **4,987**            |   |   | **6,199**       |   |   | **2,824**  |   |   | **34,740** |   |
|                                                                                 |   |   |                |   |   |                      |   |   |                |   |   |                      |   |   |                 |   |   |            |   |   |            |   |
| of                  which                                                            |   |   |                |   |   |                      |   |   |                |   |   |                      |   |   |                 |   |   |            |   |   |            |   |
| Funded                  defined benefit plans                                        |   |   | 6,560          |   |   | 11,830               |   |   | -              |   |   | 4,451                |   |   | 3,978           |   |   | 1,996      |   |   | **28,815** |   |

| **Fair                  value**                              |   |     |      | United   |   |       |   | Great    |   | US       |   |      |   |   |    |
|--------------------------------------------------------------|--------|----------|-----------|----------|--------|------------|--------|----------|--------|----------|--------|-----------|--------|--------|---------|
| **of                  plan assets in**                       |   | Sweden   |      | States   |   | France     |   | Britain  |   | Other    |   | Other     |   |   |    |
| **funded                  plans**                            |   | Pensions |      | Pensions |   | Pensions   |   | Pensions |   | benefits |   | plans     |   | Total  |    |
| **Plan                  assets at January 1, 2004**          |   |     | **3,592** |     |   | **6,727**  |   |     | **-**  |     |   | **2,254** |   |   | **111** |   |   | **1,062** |   |   | **13,746** |   |
| Acquisitions,                  divestments and other changes |   |     | 129       |     |   | 15         |   |     | -      |     |   | 114       |   |   | -       |   |   | 18 |   |   | **276** |   |
| Expected                  return on plan assets              |   |     | 217       |     |   | 517        |   |     | -      |     |   | 151       |   |   | 12      |   |   | 46 |   |   | **943** |   |
| Actuarial                  gains and (losses)                |   |     | 141       |     |   | 174        |   |     | -      |     |   | 73        |   |   | (10     | ) |   | 5 |   |   | **383** |   |
| Employer                  contributions                      |   |     | -         |     |   | 1,153      |   |     | -      |     |   | 83        |   |   | 106     |   |   | 105 |   |   | **1,447** |   |
| Employee                  contributions                      |   |     | -         |     |   | -          |   |     | -      |     |   | 30        |   |   | -       |   |   | 1 |   |   | **31** |   |
| Exchange                  rate translation                   |   |     | -         |     |   | (730       | )      |     | -      |     |   | (55       | )      |   | (20     | ) |   | 1 |   |   | **(804** | **)** |
| Benefits                  paid                               |   |     | -         |     |   | (693       | )      |     | -      |     |   | (98       | )      |   | -       |   |   | (92 | ) |   | **(883** | **)** |
| **Plan                  assets at December 31, 2004**        |   |     | **4,079** |     |   | **7,163**  |   |     | **-**  |     |   | **2,552** |   |   | **199** |   |   | **1,146** |   |   | **15,139** |   |
|                                                         |   |     |           |     |   |            |   |     |        |     |   |           |   |   |         |   |   |  |   |   |  |   |
| Acquisitions,                  divestments and other changes |   |     | (97       | )        |   | (35        | )      |     | -      |     |   | (13       | )      |   | -       |   |   | 4 |   |   | **(141** | **)** |
| Expected                  return on plan assets              |   |     | 294       |     |   | 604        |   |     | -      |     |   | 166       |   |   | 15      |   |   | 69 |   |   | **1,148** |   |
| Actuarial                  gains and (losses)                |   |     | 461       |     |   | (65        | )      |     | -      |     |   | 271       |   |   | (9      | ) |   | 15 |   |   | **673** |   |
| Employer                  contributions                      |   |     | 1,188     |     |   | 2,225      |   |     | -      |     |   | 906       |   |   | 18      |   |   | 103 |   |   | **4,440** |   |
| Employee                  contributions                      |   |     | -         |     |   | -          |   |     | -      |     |   | 78        |   |   | -       |   |   | 8 |   |   | **86** |   |
| Exchange                  rate translation                   |   |     | -         |     |   | 1,577      |   |     | -      |     |   | 220       |   |   | 37      |   |   | 147 |   |   | **1,981** |   |
| Benefits                  paid                               |   |     | -         |     |   | (741       | )      |     | -      |     |   | (108      | )      |   | (70     | ) |   | (129 | ) |   | **(1,048** | **)** |
| **Plan                  assets at December 31, 2005**        |   |     | **5,925** |     |   | **10,728** |   |     | **-**  |     |   | **4,072** |   |   | **190** |   |   | **1,363** |   |   | **22,278** |   |

----

| **Fair                  value****of                  plan assets in****funded                  plans** |   |   | SwedenPensions |   |   | UnitedStatesPensions |   |   | FrancePensions |   |   | GreatBritainPensions |   |   | USotherbenefits |   |   | Otherplans |   |   | Total      |   |
|--------------------------------------------------------------------------------------------------------|--------|--------|----------------|--------|--------|----------------------|--------|--------|----------------|--------|--------|----------------------|--------|--------|-----------------|--------|--------|------------|--------|--------|------------|--------|
| Acquisitions,                  divestments and other changes                                           |   |   | -              |   |   | -                    |   |   | -              |   |   | -                    |   |   | -               |   |   | 164        |   |   | **164**    |   |
| Expected                  return on plan assets                                                        |   |   | 347            |   |   | 753                  |   |   | -              |   |   | 204                  |   |   | 4               |   |   | 55         |   |   | **1,363**  |   |
| Actuarial                  gains and (losses)                                                          |   |   | 233            |   |   | 323                  |   |   | -              |   |   | 94                   |   |   | 3               |   |   | 64         |   |   | **717**    |   |
| Employer                  contributions                                                                |   |   | -              |   |   | 2,858                |   |   | -              |   |   | 646                  |   |   | 38              |   |   | 181        |   |   | **3,723**  |   |
| Employee                  contributions                                                                |   |   | -              |   |   | -                    |   |   | -              |   |   | 33                   |   |   | -               |   |   | 2          |   |   | **35**     |   |
| Exchange                  rate translation                                                             |   |   | -              |   |   | (1,674               | )      |   | -              |   |   | (78                  | )      |   | (24             | )      |   | (130       | )      |   | **(1,906** | **)**  |
| Benefits                  paid                                                                         |   |   | (111           | )      |   | (762                 | )      |   | -              |   |   | (91                  | )      |   | (72             | )      |   | (111       | )      |   | **(1,147** | **)**  |
| **Plan                  assets at December 31, 2006**                                                  |   |   | **6,394**      |   |   | **12,226**           |   |   | **-**          |   |   | **4,880**            |   |   | **139**         |   |   | **1,588**  |   |   | **25,227** |   |

| **Net                  provisions for**                                                                |   |     |       | United   |   |       |   | Great    |       | US       |   |     |   |   |       |
|--------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|------------|--------|----------|------------|----------|--------|----------|--------|--------|------------|
| **post-employment**                                                                                    |   | Sweden   |       | States   |   | France     |   | Britain  |       | Other    |   | Other    |   |   |       |
| **benefits**                                                                                           |   | Pensions |       | Pensions |   | Pensions   |   | Pensions |       | benefits |   | plans    |   | Total  |       |
| **Funded                  status at December 31, 2004**                                                |   |     | **(2,158** | **)**    |   | **(3,358** | **)**  |     | **(2,079** | **)**    |   | **(894** | **)**  |   | **(5,876** | **)** |   | **(1,142** | **)** |   | **(15,507** | **)** |
| Unrecognized                  actuarial (gains) and losses                                             |   |     | 456        |     |   | 277        |   |     | 69         |     |   | 162      |   |   | 240        |   |   | 54 |   |   | **1,258** |   |
| Unrecognized                  past service costs                                                       |   |     | -          |     |   | 2          |   |     | (66        | )        |   | (3       | )      |   | (9         | ) |   | (7 | ) |   | **(83** | **)** |
| **Net                  provisions for post-employment benefits at December 31,                  2004** |   |     | **(1,702** | **)**    |   | **(3,079** | **)**  |     | **(2,076** | **)**    |   | **(735** | **)**  |   | **(5,645** | **)** |   | **(1,095** | **)** |   | **(14,332** | **)** |
|                                                                                                   |   |     |            |     |   |            |   |     |            |     |   |          |   |   |            |   |   |  |   |   |  |   |
| whereof                  reported as                                                                   |   |     |            |     |   |            |   |     |            |     |   |          |   |   |            |   |   |  |   |   |  |   |
| Prepaid                  pensions and other assets                                                     |   |     | 2          |     |   | 166        |   |     | -          |     |   | -        |   |   | 133        |   |   | 70 |   |   | **371** |   |
| **Provisions                  for post-employment benefits**                                           |   |     | (1,704     | )        |   | (3,245     | )      |     | (2,076     | )        |   | (735     | )      |   | (5,778     | ) |   | (1,165 | ) |   | **(14,703** | **)** |
|                                                                                                   |   |     |            |     |   |            |   |     |            |     |   |          |   |   |            |   |   |  |   |   |  |   |
| **Funded                  status at December 31, 2005**                                                |   |     | **(916**   | **)**    |   | **(2,551** | **)**  |     | **(1,858** | **)**    |   | **(563** | **)**  |   | **(6,961** | **)** |   | **(1,394** | **)** |   | **(14,243** | **)** |
| Unrecognized                  actuarial (gains) and losses                                             |   |     | 755        |     |   | 770        |   |     | 223        |     |   | 592      |   |   | 326        |   |   | 201 |   |   | **2,867** |   |
| Unrecognized                  past service costs                                                       |   |     | -          |     |   | 3          |   |     | (67        | )        |   | (12      | )      |   | (12        | ) |   | 2 |   |   | **(86** | **)** |
| **Net                  provisions for post-employment benefits at December 31,                  2005** |   |     | **(161**   | **)**    |   | **(1,778** | **)**  |     | **(1,702** | **)**    |   | **17**   |   |   | **(6,647** | **)** |   | **(1,191** | **)** |   | **(11,462** | **)** |
|                                                                                                   |   |     |            |     |   |            |   |     |            |     |   |          |   |   |            |   |   |  |   |   |  |   |
| whereof                  reported as                                                                   |   |     |            |     |   |            |   |     |            |     |   |          |   |   |            |   |   |  |   |   |  |   |
| Prepaid                  pensions and other assets                                                     |   |     | -          |     |   | 145        |   |     | -          |     |   | 35       |   |   | 253        |   |   | 91 |   |   | **524** |   |
| Provisions                  for post-employment benefits                                               |   |     | (161       | )        |   | (1,923     | )      |     | (1,702     | )        |   | (18      | )      |   | (6,900     | ) |   | (1,282 | ) |   | **(11,986** | **)** |
|                                                                                                   |   |     |            |     |   |            |   |     |            |     |   |          |   |   |            |   |   |  |   |   |  |   |
| **Funded                  status at December 31, 2006**                                                |   |     | **(748**   | **)**    |   | **209**    |   |     | **(1,571** | **)**    |   | **(107** | **)**  |   | **(6,060** | **)** |   | **(1,236** | **)** |   | **(9,513** | **)** |
| Unrecognized                  actuarial (gains) and losses                                             |   |     | 626        |     |   | 798        |   |     | 224        |     |   | 649      |   |   | 412        |   |   | 249 |   |   | **2,958** |   |
| Unrecognized                  past service costs                                                       |   |     | -          |     |   | 8          |   |     | (25        | )        |   | -        |   |   | (71        | ) |   | (8 | ) |   | **(96** | **)** |
| **Net                  provisions for post-employment benefits at December 31,                  2006** |   |     | **(122**   | **)**    |   | **1,015**  |   |     | **(1,372** | **)**    |   | **542**  |   |   | **(5,719** | **)** |   | **(995** | **)** |   | **(6,651** | **)** |
|                                                                                                   |   |     |            |     |   |            |   |     |            |     |   |          |   |   |            |   |   |  |   |   |  |   |
| whereof                  reported as                                                                   |   |     |            |     |   |            |   |     |            |     |   |          |   |   |            |   |   |  |   |   |  |   |
| Prepaid                  pensions and other assets                                                     |   |     | -          |     |   | 1,412      |   |     | -          |     |   | 542      |   |   | 87         |   |   | - |   |   | **2,041** |   |
| Provisions                  for post-employment benefits                                               |   |     | (122       | )        |   | (397       | )      |     | (1,372     | )        |   | -        |   |   | (5,806     | ) |   | (995 | ) |   | **(8,692** | **)** |

| **Plan                  assets by category**      |   | 2006   |       | %      |   |
|---------------------------------------------------|--------|--------|------------|--------|--------|
| Shares                  and participation, Volvo  |   |   | 51         |   |   | 0 |   |
| Shares                  and participations, other |   |   | 12,709     |   |   | 51 |   |
| Bonds                                             |   |   | 10,076     |   |   | 40 |   |
| Property                                          |   |   | 313        |   |   | 1 |   |
| Liquid                  funds etc.                |   |   | 2,078      |   |   | 8 |   |
|                                              |   |   | **25,227** |   |   | **100** |   |

| **Actuarial                  gains and losses**              |   | **2006** |     |
|--------------------------------------------------------------|--------|----------|----------|
| Experience-based                  adjustments in obligation  |   |     | (530     | ) |
| Experience-based                  adjustments in plan assets |   |     | 717      |   |
| Effects                  of changes in actuarial assumptions |   |     | (448     | ) |
| **Actuarial                  gains and (losses), net**       |   |     | **(261** | **)** |

----

**Note        25 Other provisions**

|                                                 |   |                      |       |                      |   |       |   |   |       | Acquired |   |       |   |    |    |                      |   |                       |   |                      |    |
|------------------------------------------------------|--------|---------------------------|------------|---------------------------|--------|------------|--------|--------|------------|----------|--------|------------|--------|---------|---------|---------------------------|--------|----------------------------|--------|---------------------------|---------|
|                                                 |   | Value                  in |       | Value                  in |   | Provi-     |   |   |       | and      |   | Trans-     |   | Re-     |    | Value                  in |   | Where-                     |   | Where-                    |    |
|                                                 |   | balance                   |       | balance                   |   | sions      |   |   |       | divested |   | lation     |   | classi- |    | balance                   |   | of                  due    |   | of                  due   |    |
|                                                 |   | sheet                     |       | sheet                     |   | and        |   | Utili- |       | compa-   |   | differ-    |   | fica-   |    | sheet                     |   | within                  12 |   | after                  12 |    |
|                                                 |   | 2004                      |       | 2005                      |   | reversals  |   | zation |       | nies     |   | ences      |   | tions   |    | 2006                      |   | months                     |   | months                    |    |
| Warranties                                           |   |                      | 6,742      |                      |   | 8,163      |   |   | 6,262      |     |   | (5,789     | )      |    | (13     | )                         |   | (530                       | )      |                      | 318     |   |   | 8,411 |   |   | 4,746 |   |   | 3,665 |   |
| Provisions                  in insurance operations  |   |                      | 312        |                      |   | 388        |   |   | (26        | )        |   | -          |   |    | -       |                      |   | -                          |   |                      | -       |   |   | 362 |   |   | - |   |   | 362 |   |
| Restructuring                  measures              |   |                      | 571        |                      |   | 372        |   |   | 174        |     |   | (100       | )      |    | -       |                      |   | (16                        | )      |                      | (1      | ) |   | 429 |   |   | 375 |   |   | 54 |   |
| Provisions                  for residual value risks |   |                      | 987        |                      |   | 931        |   |   | 9          |     |   | 20         |   |    | (22     | )                         |   | (84                        | )      |                      | (73     | ) |   | 781 |   |   | 539 |   |   | 242 |   |
| Provisions                  for service contracts    |   |                      | 1,512      |                      |   | 1,623      |   |   | 394        |     |   | (324       | )      |    | 4       |                      |   | (51                        | )      |                      | 31      |   |   | 1,677 |   |   | 928 |   |   | 749 |   |
| Other                  provisions                    |   |                      | 4,354      |                      |   | 4,814      |   |   | 3,554      |     |   | (3,588     | )      |    | (42     | )                         |   | (382                       | )      |                      | 533     |   |   | 4,889 |   |   | 3,211 |   |   | 1,678 |   |
| **Total**                                            |   |                      | **14,478** |                      |   | **16,291** |   |   | **10,367** |     |   | **(9,781** | **)**  |    | **(73** | **)**                     |   | **(1,063**                 | **)**  |                      | **808** |   |   | **16,549** |   |   | **9,799** |   |   | **6,750** |   |

**Note        26 Non-current liabilities**

| **Bond                  loans**          |   | Actual                  interest rate, % |      | Effective interest                  rate, Dec 31, 2006, % |   | 2004      |   | 2005   |       | 2006   |   |
|------------------------------------------|--------|------------------------------------------|-----------|----------------------------------------------------------------|--------|-----------|--------|--------|------------|--------|--------|
| GBP                  2004/2006           |   |                                     | 5.18      |                                                           |   | -         |   |   | 1,905      |   |   | - |   |   | - |   |
| SEK                  1999-2006/2008-2011 |   |                                     | 2.50-5.20 |                                                           |   | 3.77-7.27 |   |   | 4,798      |   |   | 4,931 |   |   | 8,973 |   |
| JPY                  2001-2005/2008-2011 |   |                                     | 0.42-1.50 |                                                           |   | 0.85-1.34 |   |   | 542        |   |   | 475 |   |   | 231 |   |
| CZK                  2003-2005/2008-2010 |   |                                     | 2.69-4.50 |                                                           |   | 2.88-3.19 |   |   | 380        |   |   | 400 |   |   | 389 |   |
| USD                  1998-2006/2008      |   |                                     | 5.00-5.98 |                                                           |   | 4.97-5.33 |   |   | 2,150      |   |   | 1,788 |   |   | 1,614 |   |
| EUR                  1997-2006/2008-2011 |   |                                     | 3.56-6.12 |                                                           |   | 2.49-4.10 |   |   | 17,546     |   |   | 19,928 |   |   | 11,623 |   |
| NOK                  2006/2008           |   |                                     | 3.59      |                                                           |   | 4.40      |   |   | -          |   |   | - |   |   | 329 |   |
| Other                  bond loans        |   |                                     |           |                                                           |   |           |   |   | 291        |   |   | 48 |   |   | 20 |   |
| **Total**                                |   |                                     |           |                                                           |   |           |   |   | **27,612** |   |   | **27,570** |   |   | **23,179** |   |

----

| **Other                  loans**                       |   |   | Actual                  interest rate, % |   |   | Effective                  interest rate Dec 31, 2006, % |   |   | 2004       |   |   | 2005       |   |   | 2006       |   |
|--------------------------------------------------------|--------|--------|------------------------------------------|--------|--------|----------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| USD                  1999-2005/2008-2011               |   |   | 4.07-5.75                                |   |   | 4.98-5.23                                                |   |   | 5,360      |   |   | 6,193      |   |   | 4,466      |   |
| EUR                  2003-2006/2008-2010               |   |   | 3.85-3.99                                |   |   | 3.98-4.00                                                |   |   | 2,596      |   |   | 2,735      |   |   | 3,238      |   |
| GBP                  2005-2006/2008-2010               |   |   | 5.62-5.67                                |   |   | 5.43-5.47                                                |   |   | 1,269      |   |   | 1,859      |   |   | 1,048      |   |
| CAD                  2002-2006/2008-2012               |   |   | 4.58-5.03                                |   |   | 4.11-4.16                                                |   |   | 1,557      |   |   | 1,950      |   |   | 2,281      |   |
| MXN                  2005/2010                         |   |   | 7.54-7.91                                |   |   | 7.37-7.38                                                |   |   | -          |   |   | 835        |   |   | 693        |   |
| JPY                  2006/2013                         |   |   | 0.80                                     |   |   | 1.54                                                     |   |   | -          |   |   | -          |   |   | 654        |   |
| CHF                  2006/2009-2011                    |   |   | 2.22-2.24                                |   |   | 2.63-2.80                                                |   |   | -          |   |   | -          |   |   | 1,127      |   |
| Other                  loans                           |   |   | 2.80-15.69                               |   |   |                                                          |   |   | 2,017      |   |   | 2,413      |   |   | 2,023      |   |
| Total                  other long-term loans 1         |   |   |                                          |   |   |                                                          |   |   | **12,799** |   |   | **15,985** |   |   | **15,530** |   |
| Deferred                  leasing income               |   |   |                                          |   |   |                                                          |   |   | 1,377      |   |   | 1,689      |   |   | 2,201      |   |
| Residual                  value liability              |   |   |                                          |   |   |                                                          |   |   | 3,122      |   |   | 2,931      |   |   | 4,187      |   |
| Other                  long-term financial liabilities |   |   |                                          |   |   |                                                          |   |   | -          |   |   | 476        |   |   | 123        |   |
| Other                  long-term liabilities           |   |   |                                          |   |   |                                                          |   |   | 154        |   |   | 243        |   |   | 237        |   |
| **Total**                                              |   |   |                                          |   |   |                                                          |   |   | **45,064** |   |   | **48,894** |   |   | **45,457** |   |

| Long-term                  loans mature as follows: |   |   |       |
|-----------------------------------------------------|--------|--------|------------|
| 2008                                                |   |   | 18,303     |   |
| 2009                                                |   |   | 8,980      |   |
| 2010                                                |   |   | 5,604      |   |
| 2011                                                |   |   | 4,470      |   |
| 2012                                                |   |   | 628        |   |
| 2013                  or later                      |   |   | 724        |   |
| **Total**                                           |   |   | **38,709** |   |

**Note        27 Current liabilities **

|                           |   | 2004   |       | 2005   |   | 2006       |   |
|--------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Bank                  loans    |   |   | 4,267      |   |   | 5,204      |   |   | 4,475 |   |
| Other                  loans 1 |   |   | 17,129     |   |   | 26,126     |   |   | 23,772 |   |
| **Total**                      |   |   | **21,396** |   |   | **31,330** |   |   | **28,247** |   |

|                                                   |   | 2004   |       | 2005   |   | 2006       |   |
|--------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Advances                  from customers               |   |   | 2,298      |   |   | 2,460      |   |   | 2,538 |   |
| Wages,                  salaries and withholding taxes |   |   | 4,987      |   |   | 5,680      |   |   | 5,745 |   |
| VAT                  liabilities                       |   |   | 1,193      |   |   | 1,351      |   |   | 1,292 |   |
| Accrued                  expenses and prepaid income   |   |   | 9,094      |   |   | 11,201     |   |   | 10,929 |   |
| Deferred                  leasing income               |   |   | 1,141      |   |   | 1,406      |   |   | 1,546 |   |
| Residual                  value liability              |   |   | 1,873      |   |   | 1,840      |   |   | 1,594 |   |
| Other                  financial liabilities           |   |   | 642        |   |   | 1,762      |   |   | 814 |   |
| Other                  liabilities                     |   |   | 3,863      |   |   | 4,562      |   |   | 3,253 |   |
| **Total**                                              |   |   | **25,091** |   |   | **30,262** |   |   | **27,711** |   |

----

**Note        28 Assets pledged **

|                                                       |   | 2004   |      | 2005   |   | 2006      |   |
|------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Property,                  plant and equipment - mortgages |   |   | 205       |   |   | 593       |   |   | 310 |   |
| Assets                  under operating leases             |   |   | 1,665     |   |   | 1,700     |   |   | 609 |   |
| Chattel                  mortgages                         |   |   | 374       |   |   | 350       |   |   | 367 |   |
| Receivables                                                |   |   | 319       |   |   | 360       |   |   | 576 |   |
| Inventories                                                |   |   | 13        |   |   | 16        |   |   | - |   |
| Cash,                  marketable securities               |   |   | 470       |   |   | 230       |   |   | 98 |   |
| Other                  assets pledged                      |   |   | -         |   |   | 6         |   |   | - |   |
| **Total**                                                  |   |   | **3,046** |   |   | **3,255** |   |   | **1,960** |   |

**Note        29 Contingent liabilities **

|                                               |   | 2004   |      | 2005   |   | 2006      |   |
|----------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Credit                  guarantees                 |   |   |      |   |   |      |   |
| -                  issued for associated companies |   |   | 110       |   |   | 13        |   |   | - |   |
| -                  issued for customers and others |   |   | 2,471     |   |   | 1,267     |   |   | 1,109 |   |
| Tax                  claims                        |   |   | 1,433     |   |   | 695       |   |   | 983 |   |
| Other                  contingent liabilities      |   |   | 5,175     |   |   | 5,875     |   |   | 5,634 |   |
| **Total**                                          |   |   | **9,189** |   |   | **7,850** |   |   | **7,726** |   |

**Legal        proceedings**

----

**Note        30 Cash-flow **

**Note        31 Leasing**

|                                                                                                     |   | Financial                  leases |       | Operating                  leases |   |
|----------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|-----------------------------------|--------|
| 2007                                                                                                     |   |                              | 8,725      |                              |   | 3,900 |   |
| 2008-2011                                                                                                |   |                              | 15,338     |                              |   | 6,091 |   |
| 2012                  or later                                                                           |   |                              | 281        |                              |   | 344 |   |
| **Total**                                                                                                |   |                              | **24,344** |                              |   | **10,335** |   |
|                                                                                                     |   |                              |            |                              |   |  |   |
| Allowance                  for uncollectible future rental income                                        |   |                              | (425       | )                                 |   |  |   |
| Unearned                  rental income                                                                  |   |                              | (2,446     | )                                 |   |  |   |
| Present                  value of future rental income related to noncancellable                  leases |   |                              | 21,473     |                              |   |  |   |

|                           |   | Financial                  leases |    | Operating                  leases |   |
|--------------------------------|--------|-----------------------------------|---------|-----------------------------------|--------|
| 2007                           |   |                              | 165     |                              |   | 841 |   |
| 2008-2011                      |   |                              | 186     |                              |   | 1,508 |   |
| 2012                  or later |   |                              | 6       |                              |   | 528 |   |
| **Total**                      |   |                              | **357** |                              |   | **2,877** |   |

|                                         |   | 2004   |     | 2005   |   | 2006       |   |
|----------------------------------------------|--------|--------|----------|--------|--------|------------|--------|
| Financial                  leases:           |   |   |     |   |   |       |   |
|                    Contingent rents     |   |   | (30      | )      |   | 0          |   |   | 0 |   |
| Operating                  leases:           |   |   |          |   |   |            |   |   |  |   |
|                    Contingent rents     |   |   | (27      | )      |   | (34        | )      |   | (38 | ) |
|   Rental                  payments |   |   | (910     | )      |   | (1,000     | )      |   | (1,468 | ) |
|                    Sublease payments    |   |   | 28       |   |   | 23         |   |   | 15 |   |
| **Total**                                    |   |   | **(939** | **)**  |   | **(1,011** | **)**  |   | **(1,491** | **)** |

|                                          |   | 2004   |      | 2005   |   | 2006      |   |
|-----------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Acquisition                  costs:           |   |   |           |   |   |           |   |   |  |   |
| Buildings                                     |   |   | 526       |   |   | 459       |   |   | 151 |   |
| Land                  and land improvements   |   |   | 66        |   |   | 75        |   |   | 72 |   |
| Machinery                  and equipment      |   |   | 236       |   |   | 198       |   |   | 114 |   |
| Assets                  under operating lease |   |   | 1,065     |   |   | 875       |   |   | 888 |   |
| **Total**                                     |   |   | **1,893** |   |   | **1,607** |   |   | **1,225** |   |

----

| Accumulated                  depreciation:    |   | 2004   |      | 2005   |   | 2006      |   |
|-----------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Buildings                                     |   |   | (56       | )      |   | (79       | )      |   | (49 | ) |
| Land                  and land improvements   |   |   | -         |   |   | -         |   |   | - |   |
| Machinery                  and equipment      |   |   | (46       | )      |   | (39       | )      |   | (35 | ) |
| Assets                  under operating lease |   |   | (518      | )      |   | (470      | )      |   | (609 | ) |
| **Total**                                     |   |   | **(620**  | **)**  |   | **(588**  | **)**  |   | **(693** | **)** |
|                                          |   |   |           |   |   |           |   |   |  |   |
| Book                  value:                  |   |   | 2004      |   |   | 2005      |   |   | 2006 |   |
| Buildings                                     |   |   | 470       |   |   | 380       |   |   | 102 |   |
| Land                  and land improvements   |   |   | 66        |   |   | 75        |   |   | 72 |   |
| Machinery                  and equipment      |   |   | 190       |   |   | 159       |   |   | 79 |   |
| Assets                  under operating lease |   |   | 547       |   |   | 405       |   |   | 279 |   |
| **Total**                                     |   |   | **1,273** |   |   | **1,019** |   |   | **532** |   |

**Note        32 Transactions with related parties **

|                                                             |   | 2004   |   | 2005   |   | 2006 |   |
|------------------------------------------------------------------|--------|--------|--------|--------|--------|------|--------|
| Sales                    to associated companies                 |   |   | 279    |   |   | 381  |   |   | 156 |   |
| Purchase                    from associated companies            |   |   | 73     |   |   | 296  |   |   | 288 |   |
| Receivables                    from associated companies, Dec 31 |   |   | 174    |   |   | 206  |   |   | 40 |   |
| Liabilities                    to associated companies, Dec 31   |   |   | 70     |   |   | 65   |   |   | 39 |   |

**Note            33 Government grants **

**Note            34 Personnel**

| **Remuneration                      to senior executives** |   |                              |           |                                 |       |                                  |       |                           |           |
|------------------------------------------------------------|--------|-----------------------------------|----------------|--------------------------------------|------------|---------------------------------------|------------|--------------------------------|----------------|
| SEK                                                        |   | Fixed                      salary |           | Variable                      salary |       | Other                      benefits 1 |       | Pension                      4 |           |
| Board                      Chairman                        |   |                              | 1,425,000      |                                 |       | –                               |       |                           | –        |   |   | – |   |
| CEO                                                        |   |                              | 11,354,968     |                                 |       | 5,527,560                             |       |                           | 2,067,434      |   |   | 14,625,220 |   |
| Other                      members of GEC 2                |   |                              | 49,834,705     |                                 |       | 19,890,289                            |       |                           | 64,558,513     |   |   | 43,768,764 |   |
| Total                      remuneration and benefits       |   |                              | 62,614,673     |                                 |       | 25,417,849                            |       |                           | 66,625,947     |   |   | 58,393,984 |   |
| **Total                      costs 3**                     |   |                              | **80,243,527** | ** **                           | ** ** | **32,494,979**                        | ** ** | ** **                     | **85,581,958** | ** ** | ** ** | **70,140,948** |   |

----

**Terms              of employment of the CEO**

**Variable              salaries**

**Severance              payments**

**Pensions**

**Incentive              programs**

**Employee              stock options program**

**Share-based              incentive program **

----

|                                                                                                                                                                                                                                                      |   | 2003/2008                employee   |        |                    |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|-------------------------|------------|
| **Financial                instruments and shares**                                                                                                                                                                                                       |   | stock                options number |        | Shares                1 |       |
| Board                Chairman                                                                                                                                                                                                                             |   | –                             |        | –                 |       |
| CEO                                                                                                                                                                                                                                                       |   |                                | 50,000      |                    |       | 8,000 |   |
| Other                members of GEC                                                                                                                                                                                                                       |   |                                | 55,000      |                    |       | 60,667 |   |
| Other                senior executives                                                                                                                                                                                                                    |   |                                | 159,750     |                    |       | 415,333 |   |
| **Total**                                                                                                                                                                                                                                                 |   |                                | **264,750** | ** **              | ** ** | **484,000** |   |
| 1                The table shows payments in cash with the corresponding value in                shares.                Of the total 484,000 shares, 267,667 shares and a cash-settlement                corresponding to 216,333 shares will be granted. |   |

|                                          |   |     |                          | Total                number of outstanding options |   |                   |   |                   |    |      |   |      |   |
|-----------------------------------------------|--------|----------|-------------------------------|----------------------------------------------------|--------|------------------------|--------|------------------------|---------|-----------|--------|-----------|--------|
| **Summary                of**                 |   | Alloment |                          | Dec                31,                             |   | Dec                31, |   | Dec                31, |    | Excercise |   | Excercise |   | Value/ |   | Vesting, |   |
| **option                programs**            |   | date     |                          | 2004                                               |   | 2005                   |   | 2006                   |    | price     |   | period    |   | option |   | years |   |
| 1998,                call options 1           |   |     | April                28, 2000 |                                               |   | 101,830                |   |                   | – |      |   | –   |   |   | 302.12 |   |   | Apr                28, 2000– Apr 27, 2005 |   |   | 55.75 |   |   | n/a |   |
| 2002,                employee stock options 2 |   |     | May                2, 2003    |                                               |   | 945,000                |   |                   | 938,750 |      |   | 264,750   |   |   | 156.19 |   |   | May                2, 2006 – May 1, 2008 |   |   | 32.00 |   |   | 3 |   |

**Cost      for incentive programs**

| **Change                in number of options per program** |   | Program |    |
|------------------------------------------------------------|--------|---------|---------|
| Number                of options                           |   | 2000    |    | 2002 |   |
| Dec                31, 2003                                |   |    | 96,245  |   |   | 1,050,000 |   |
| Alloted                                                    |   |    | – |   |   | – |   |
| Cancelled                                                  |   |    | – |   |   | (105,000 | ) |
| Exercised                                                  |   |    | (96,245 | ) |   | – |   |
| Dec                31, 2004                                |   |    | – |   |   | 945,000 |   |
| Alloted                                                    |   |    |    |   |   | – |   |
| Cancelled                                                  |   |    |    |   |   | (6,250 | ) |
| Exercised                                                  |   |    |    |   |   | – |   |
| Dec                31, 2005                                |   |    |    |   |   | 938,750 |   |
| Alloted                                                    |   |    |    |   |   | – |   |
| Cancelled                                                  |   |    |    |   |   | (5,000 | ) |
| Exercised                                                  |   |    |    |   |   | (669,000 | ) |
| Dec                31, 2006                                |   |    |    |   |   | 264,750 |   |

----

|                                           |   | 2004                               |       | 2005                             |       | 2006                               |       |
|------------------------------------------------|--------|------------------------------------|------------|----------------------------------|------------|------------------------------------|------------|
|                                           |   |                               |       |                             |       |                               |       |   |   |   |   |   |   |
| **Average                number of employees** |   | Number                of employees |       | of                which women, % |       | Number                of employees |       | of                which women, % |   | Number                of employees |   | of                which women, % |   |
| **AB                Volvo**                    |   |                               |       |                             |       |                               |       |   |   |   |   |   |   |
| Sweden                                         |   | 136                                |       | 54                               |       | 144                                |       | 50 |   | 160 |   | 51 |   |
|                                           |   |                               |       |                             |       |                               |       |   |   |   |   |   |   |
| Subsidiaries                                   |   |                               |       |                             |       |                               |       |   |   |   |   |   |   |
| Sweden                                         |   |                               | 27,034     |                             |       | 18                                 |       |   | 27,699 |   |   | 19 |   |   | 26,722 |   |   | 19 |   |
| Western                Europe                  |   |                               | 26,325     |                             |       | 14                                 |       |   | 25,894 |   |   | 14 |   |   | 26,380 |   |   | 15 |   |
| Eastern                Europe                  |   |                               | 2,731      |                             |       | 16                                 |       |   | 3,481 |   |   | 15 |   |   | 4,225 |   |   | 16 |   |
| North                America                   |   |                               | 13,057     |                             |       | 19                                 |       |   | 13,778 |   |   | 20 |   |   | 14,609 |   |   | 20 |   |
| South                America                   |   |                               | 3,040      |                             |       | 12                                 |       |   | 3,656 |   |   | 14 |   |   | 3,874 |   |   | 13 |   |
| Asia                                           |   |                               | 4,114      |                             |       | 16                                 |       |   | 4,273 |   |   | 15 |   |   | 4,075 |   |   | 15 |   |
| Other                countries                 |   |                               | 1,759      |                             |       | 11                                 |       |   | 2,259 |   |   | 12 |   |   | 2,255 |   |   | 12 |   |
| **Group                total**                 |   |                               | **78,196** | ** **                       | ** ** | **16**                             | ** ** | ** ** | **81,184** | ** ** | ** ** | **17** | ** ** | ** ** | **82,300** | ** ** | ** ** | **17** |   |

|                                                  |   | 2004                     |   | 2005                    |   | 2006                     |   |
|-------------------------------------------------------|--------|--------------------------|--------|-------------------------|--------|--------------------------|--------|
| **Board                members**                      |   | Number                at |   | of                which |   | Number                at |   | of                which |   | Number                at |   | of                which |   |
| **and                chief officers**                 |   | year-end                 |   | women,                % |   | year-end                 |   | women,                % |   | year-end |   | women,                % |   |
| **AB                Volvo**                           |   |                     |   |                    |   |                     |   |   |   |   |   |   |   |
| Board                members                          |   |                     | 11     |                    |   | 9                        |   |   | 11 |   |   | 9 |   |   | 11 |   |   | 9 |   |
| CEO                and GEC                            |   |                     | 17     |                    |   | 6                        |   |   | 17 |   |   | 6 |   |   | 17 |   |   | 6 |   |
|                                                  |   |                     |   |                    |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Volvo                Group**                        |   |                     |   |                    |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Board                members                          |   |                     | 1,017  |                    |   | 15                       |   |   | 1,010 |   |   | 10 |   |   | 939 |   |   | 11 |   |
| Presidents                and other senior executives |   |                     | 1,276  |                    |   | 16                       |   |   | 1,305 |   |   | 16 |   |   | 1,422 |   |   | 15 |   |

|                                                                                            |   | 2004                                                    |      | 2005                                      |       | 2006                             |       |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|-----------|-------------------------------------------|------------|----------------------------------|------------|
| **Wages, salaries****and                    other****remunerations,****SEK                  M** |   | Board                  andPresidents                  1 |      | of                  whichvariablesalaries |       | Other                  employees |       | Board                    andPresidents1 |   | of                whichvariablesalaries |   | Other                  employees |   | Board                    andPresidents                    1 |   | of                    whichvariablesalaries |   | Otheremployees |   |
| **AB                Volvo**                                                                     |   |                                                    |      |                                      |       |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Sweden                                                                                          |   |                                                    | 33.4      |                                      |       | 11.6                             |       |   | 106.3 |   |   | 42.8 |   |   | 9.8 |   |   | 97.9 |   |   | 33.4 |   |   | 11.2 |   |   | 170.8 |   |
|                                                                                            |   |                                                    |      |                                      |       |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subsidiaries                                                                                    |   |                                                    |      |                                      |       |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sweden                                                                                          |   |                                                    | 79.3      |                                      |       | 15.5                             |       |   | 9,041.7 |   |   | 84.6 |   |   | 15.6 |   |   | 9,475.6 |   |   | 93.1 |   |   | 29.3 |   |   | 9,760.8 |   |
| Western                Europe                                                                   |   |                                                    | 442.3     |                                      |       | 10.9                             |       |   | 8,905.3 |   |   | 436.0 |   |   | 6.3 |   |   | 9,267.6 |   |   | 442.0 |   |   | 8.0 |   |   | 9,380.7 |   |
| Eastern                Europe                                                                   |   |                                                    | 14.5      |                                      |       | 0.2                              |       |   | 367.0 |   |   | 25.2 |   |   | 2.0 |   |   | 472.9 |   |   | 37.6 |   |   | 2.9 |   |   | 521.8 |   |
| North                America                                                                    |   |                                                    | 209.1     |                                      |       | 10.2                             |       |   | 5,292.7 |   |   | 199.4 |   |   | 17.9 |   |   | 5,965.5 |   |   | 187.5 |   |   | 6.8 |   |   | 6,537.0 |   |
| South                America                                                                    |   |                                                    | 7.2       |                                      |       | 0.0                              |       |   | 363.9 |   |   | 9.3 |   |   | 0.0 |   |   | 529.4 |   |   | 22.1 |   |   | 4.1 |   |   | 617.9 |   |
| Asia                                                                                            |   |                                                    | 49.9      |                                      |       | 0.7                              |       |   | 724.9 |   |   | 58.9 |   |   | 1.0 |   |   | 957.2 |   |   | 56.7 |   |   | 1.7 |   |   | 1,053.7 |   |
| Other                countries                                                                  |   |                                                    | 12.7      |                                      |       | 0.0                              |       |   | 394.5 |   |   | 26.7 |   |   | 0.0 |   |   | 467.5 |   |   | 28.6 |   |   | 0.9 |   |   | 481.7 |   |
| **Group                total**                                                                  |   |                                                    | **848.4** | ** **                                | ** ** | **49.1**                         | ** ** | ** ** | **25,196.3** | ** ** | ** ** | **882.9** | ** ** | ** ** | **52.6** | ** ** | ** ** | **27,233.6** | ** ** | ** ** | **901.0** | ** ** | ** ** | **64.9** | ** ** | ** ** | **28,524.4** |   |

|                                                                                               |   | 2004                 |         | 2005        |       | 2006                                |       |
|----------------------------------------------------------------------------------------------------|--------|----------------------|--------------|-------------|------------|-------------------------------------|------------|
| **Wages, salaries,****other                      remu****nerations****and social****costs, SEK M** |   | Wages,salariesremun. |         | Socialcosts |       | of                  whichpens.costs |       | Wages,salariesremun. |   | Social                costs |   | of                  whichpens.costs |   | Wages,salariesremun. |   | Socialcosts |   | of                whichpens.                costs |   |
| **AB                Volvo 2**                                                                      |   |                 | 139.7        |        |       | 80.7                                |       |   | 48.7 |   |   | 140.7 |   |   | 78.6 |   |   | 46.7 |   |   | 204.2 |   |   | 141.6 |   |   | 104.9 |   |
| Subsidiaries                                                                                       |   |                 | 25,905.0     |        |       | 10,964.8                            |       |   | 4,365.2 |   |   | 27,975.9 |   |   | 10,392.1 |   |   | 3,688.9 |   |   | 29,221.3 |   |   | 10,047.2 |   |   | 3.634,2 |   |
| **Group                total 3**                                                                   |   |                 | **26,044.7** | ** **  | ** ** | **11,045.5**                        | ** ** | ** ** | **4,413.9** | ** ** | ** ** | **28,116.6** | ** ** | ** ** | **10,470.7** | ** ** | ** ** | **3,735.6** | ** ** | ** ** | **29,425.5** | ** ** | ** ** | **10,188.8** | ** ** | ** ** | **3,739.1** |   |

----

**Note      35 Fees to the auditors **

| **Audit                fees**                                             |   | 2004   |    | 2005   |   | 2006    |   |
|---------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Audit                fees to PricewaterhouseCoopers                       |   |   | 78      |   |   | 78      |   |   | 130 |   |
| Audit                fees to other audit firms                            |   |   | 2       |   |   | 1       |   |   | 1 |   |
| **Total**                                                                 |   |   | **80**  |   |   | **79**  |   |   | **131** |   |
|                                                                      |   |   |    |   |   |    |   |   |   |   |
| **Other                fees to PricewaterhouseCoopers**                   |   |   |    |   |   |    |   |   |   |   |
| Fees                for audit related services                            |   |   | 20      |   |   | 28      |   |   | 20 |   |
| Fees                for tax services                                      |   |   | 16      |   |   | 17      |   |   | 14 |   |
| **Total**                                                                 |   |   | **36**  |   |   | **45**  |   |   | **34** |   |
| **Fees                and other remuneration to external auditors total** |   |   | **116** |   |   | **124** |   |   | **165** |   |

**Note      36 Goals and policies in financial risk management**

**Interest-rate      risk**

| SEK                M |   | Effect                on earnings |   |
|----------------------|--------|-----------------------------------|--------|
| SEK                  |   |                              | 314.9  |   |
| USD                  |   |                              | (1.0   | ) |
| EUR                  |   |                              | (17.1  | ) |
| CAD                  |   |                              | (9.2   | ) |
| JPY                  |   |                              | (8.8   | ) |
| KRW                  |   |                              | 13.1   |   |

----

| SEK                M          |   | Assets                  with fixed interest |   |  Assets                withvariable interest |   | **Total                financial assets** |   |
|-------------------------------|--------|---------------------------------------------|--------|---------------------------------------------------|--------|-------------------------------------------|--------|
| 2007                          |   |                                        | 13,804 |                                              |   | 25,655                                    |   |   | **39,459** |   |
| 2008–2009               |   |                                        | 75     |                                              |   | 1,523                                     |   |   | **1,598** |   |
| 2010                and later |   |                                        | 32     |                                              |   | –                                   |   |   | **32** |   |
|                          |   |                                        | 13,911 |                                              |   | 27,178                                    |   |   | **41,089** |   |

**Currency      risks**

**Credit      risks**

**Liquidity      risks**

----

**Note      37 Financial instruments **

----

**Impairments**

**Hedge      Accounting**

----

**Notes      to consolidated financial statements**

**Information      regarding reported and fair values**

|                                                                                                                 |       | 31                dec 2004    |       | 31                dec 2005 |       | 31                dec 2006    |       |
|----------------------------------------------------------------------------------------------------------------------|------------|-------------------------------|------------|----------------------------|------------|-------------------------------|------------|
| **Assets**                                                                                                           |       | Carrying                value |       | Fair                value  |       | Carrying                value |       | Fair                value |   | Carrying                value |   | Fair                value |   |
| **Financial                assets at**                                                                               |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |
| **fair                value through profit and loss**                                                                |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |
| The                Volvo Group’s outstanding currency risk contract – commercial                exposure |       |                          | –    |                       |       | –                       |       |   | 560 |   |   | 560 |   |   | 1,074 |   |   | 1,074 |   |
| The                Volvo Group’s outstanding raw materials contract                                            |       |                          | –    |                       |       | –                       |       |   | 54 |   |   | 54 |   |   | 25 |   |   | 25 |   |
| The                Volvo Group’s outstanding interest risk contract – financial                exposure  |       |                          | –    |                       |       | –                       |       |   | 2,823 |   |   | 2,823 |   |   | 2,661 |   |   | 2,661 |   |
|                                                                                                                 |       |                          | –    |                       |       | –                       |       |   | 3,437 |   |   | 3,437 |   |   | 3,760 |   |   | 3,760 |   |
|                                                                                                                 |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Investments                held to maturity**                                                                      |       |                          | –    |                       |       | –                       |       |   | – |   |   | – |   |   | – |   |   | – |   |
|                                                                                                                 |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Loan                receivables and accounts receivables**                                                         |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer                financing receivables                                                                        |       |                          | 51,193     |                       |       | 51,948                        |       |   | 64,466 |   |   | 65,365 |   |   | 64,742 |   |   | 64,832 |   |
| Loans                to external parties and other interest-bearing receivables                                      |       |                          | 2,098      |                       |       | 2,126                         |       |   | 680 |   |   | 643 |   |   | 840 |   |   | 840 |   |
|                                                                                                                 |       |                          | 53,291     |                       |       | 54,074                        |       |   | 65,146 |   |   | 66,008 |   |   | 65,582 |   |   | 65,672 |   |
|                                                                                                                 |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Financial                assets available for sale**                                                               |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                and participations for which:                                                                  |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| a                market value can be calculated 1                                                                    |       |                          | 670        |                       |       | 169                           |       |   | 253 |   |   | 253 |   |   | 740 |   |   | 740 |   |
| a                market value cannot be calculated 2                                                                 |       |                          | 420        |                       |       | –                       |       |   | 303 |   |   | – |   |   | 356 |   |   | – |   |
|                                                                                                                 |       |                          | 1,090      |                       |       | 169                           |       |   | 556 |   |   | 253 |   |   | 1,096 |   |   | 740 |   |
| **Total**                                                                                                            |       |                          | **54,381** | ** **                 | ** ** | **54,243**                    | ** ** | ** ** | **69,139** | ** ** | ** ** | **69,698** | ** ** | ** ** | **70,438** | ** ** | ** ** | **70,172** |   |
|                                                                                                                 |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities**                                                                                                      |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Financial                liabilities**                                                                             |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **at                fair value through profit and loss**                                                             |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| The                Volvo Group’s outstanding currency risk contract – commercial                exposure |       |                          | –    |                       |       | –                       |       |   | 1,292 |   |   | 1,292 |   |   | 310 |   |   | 310 |   |
| The                Volvo Group’s outstanding raw materials contract                                            |       |                          | –    |                       |       | –                       |       |   | 11 |   |   | 11 |   |   | 47 |   |   | 47 |   |
| The                Volvo Group’s outstanding interest risk contract – financial                exposure  |       |                          | –    |                       |       | –                       |       |   | 2,675 |   |   | 2,675 |   |   | 820 |   |   | 820 |   |
|                                                                                                                 |       |                          | –    |                       |       | –                       |       |   | 3,978 |   |   | 3,978 |   |   | 1,177 |   |   | 1,177 |   |
|                                                                                                                 |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Financial                liabilities valued at**                                                                   |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **amortized                cost**                                                                                    |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                bond loans and other loans                                                                  |       |                          | 40,411     |                       |       | 41,441                        |       |   | 43,626 |   |   | 43,944 |   |   | 38,818 |   |   | 40,575 |   |
| Short-term                bank loans and other loans                                                                 |       |                          | 21,396     |                       |       | 20,360                        |       |   | 30,321 |   |   | 30,463 |   |   | 28,100 |   |   | 27,032 |   |
|                                                                                                                 |       |                          | 61,807     |                       |       | 61,801                        |       |   | 73,947 |   |   | 74,407 |   |   | 66,918 |   |   | 67,607 |   |
| **Total**                                                                                                            | ** ** | ** **                    | **61,807** | ** **                 | ** ** | **61,801**                    | ** ** | ** ** | **77,925** | ** ** | ** ** | **78,385** | ** ** | ** ** | **68,095** | ** ** | ** ** | **68,784** |   |
|                                                                                                                 |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Derivative                instruments 3**                                                                          |       |                          |       |                       |       |                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| The                Volvo Group’s outstanding currency risk contract – commercial                exposure |       |                          | 176        |                       |       | 1,371                         |       |   | – |   |   | – |   |   | – |   |   | – |   |
| The                Volvo Group’s outstanding raw materials contract                                            |       |                          | –    |                       |       | –25                     |       |   | – |   |   | – |   |   | – |   |   | – |   |
| The                Volvo Group’s outstanding interest risk contract–                financial exposure   |       |                          | 252        |                       |       | 924                           |       |   | – |   |   | – |   |   | – |   |   | – |   |

----

**Financial      assets at fair value through profit and loss**

| Outstanding                derivative instruments for dealing with currency and interest-rate                risks                related to financial assets and liabilities to which hedge accounting                is                not applied |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                                                                                                                                                                                                                 |       | 31                dec 2004 |   | 31                dec 2005 |   | 31                dec 2006 |   |
|                                                                                                                                                                                                                                                 |       | Notional |   | Carrying |   | Fair |   | Notional |   | Carrying |   | Fair |   | Notional |   | Carrying |   | Fair |   |
|                                                                                                                                                                                                                                                 |       | amount |   | value |   | value |   | amount |   | value |   | value |   | amount |   | value |   | value |   |
| Interest-rate                swaps                                                                                                                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                                                                                           |       |   | 76,667 |   |   | 1,659 |   |   | 2,919 |   |   | 101,483 |   |   | 2,348 |   |   | 2,348 |   |   | 92,651 |   |   | 2,412 |   |   | 2,412 |   |
| –                payable position                                                                                                                                                                                                              |       |   | 68,018 |   |   | (1,585 | ) |   | (2,144 | ) |   | 116,824 |   |   | (2,222 | ) |   | (2,222 | ) |   | 30,578 |   |   | (598 | ) |   | (598 | ) |
| Forwards                and futures                                                                                                                                                                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                                                                                           |       |   | 47,156 |   |   | 168 |   |   | 168 |   |   | 29,090 |   |   | 120 |   |   | 120 |   |   | 114,886 |   |   | 209 |   |   | 209 |   |
| –                payable position                                                                                                                                                                                                              |       |   | 30,872 |   |   | (182 | ) |   | (182 | ) |   | 27,001 |   |   | (112 | ) |   | (112 | ) |   | 80,331 |   |   | (197 | ) |   | (197 | ) |
| Foreign                exchange derivative contracts                                                                                                                                                                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                                                                                           |       |   | 17,120 |   |   | 286 |   |   | 286 |   |   | 18,619 |   |   | 355 |   |   | 355 |   |   | 8,077 |   |   | 124 |   |   | 124 |   |
| –                payable position                                                                                                                                                                                                              |       |   | 8,273 |   |   | (82 | ) |   | (107 | ) |   | 14,474 |   |   | (331 | ) |   | (331 | ) |   | 18,423 |   |   | (124 | ) |   | (124 | ) |
| Options                purchased                                                                                                                                                                                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                                                                                           |       |   | – |   |   | – |   |   | – |   |   | – |   |   | 0 |   |   | 0 |   |   | – |   |   | 21 |   |   | 21 |   |
| –                payable position                                                                                                                                                                                                              |       |   | 200 |   |   | – |   |   | (4 | ) |   | 502 |   |   | (5 | ) |   | (5 | ) |   | 200 |   |   | (4 | ) |   | (4 | ) |
| Options                written                                                                                                                                                                                                                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                                                                                           |       |   | 133 |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 603 |   |   | 3 |   |   | 3 |   |
| –                payable position                                                                                                                                                                                                              |       |   | 1,946 |   |   | (12 | ) |   | (12 | ) |   | 822 |   |   | (5 | ) |   | (5 | ) |   | 442 |   |   | (5 | ) |   | (5 | ) |
| **Total**                                                                                                                                                                                                                                            | ** ** | ** ** | ** ** | ** ** | ** ** | **252** | ** ** | ** ** | **924** | ** ** | ** ** | ** ** | ** ** | ** ** | **148** | ** ** | ** ** | **148** | ** ** | ** ** | ** ** | ** ** | ** ** | **1,841** | ** ** | ** ** | **1,841** | ** ** |

| Outstanding                forward contracts and option contracts for hedging of commercial                currency                risk, to which hedge accounting is applied      |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                               |   | 31                dec 2004 |   | 31                dec 2005 |   | 31                dec 2006 |   |
|                                                                                                                                                                               |   | Notional |   | Carrying |   | Fair |   | Notional |   | Carrying |   | Fair |   | Notional |   | Carrying |   | Fair |   |
|                                                                                                                                                                               |   | amount |   | value |   | value |   | amount |   | value |   | value |   | amount |   | value |   | value |   |
| **Foreign                exchange derivative contracts**                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                         |   |   | 26,203 |   |   | 264 |   |   | 1,775 |   |   | 37,754 |   |   | 536 |   |   | 536 |   |   | 28,930 |   |   | 1,034 |   |   | 1,034 |   |
| –                payable position                                                                                                                                            |   |   | 9,982 |   |   | (88 | ) |   | (511 | ) |   | 36,980 |   |   | (1,272 | ) |   | (1,272 | ) |   | 18,494 |   |   | (304 | ) |   | (304 | ) |
| Options                purchased                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                         |   |   | 2,831 |   |   | – |   |   | 112 |   |   | 4,769 |   |   | 51 |   |   | 51 |   |   | 5,423 |   |   | 54 |   |   | 54 |   |
| –                payable position                                                                                                                                            |   |   | – |   |   | – |   |   | – |   |   | 3 |   |   | (3 | ) |   | (3 | ) |   | – |   |   | – |   |   | – |   |
| Options                written                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                         |   |   | 233 |   |   | – |   |   | 0 |   |   | – |   |   | – |   |   | – |   |   | – |   |   | – |   |   | – |   |
| –                payable position                                                                                                                                            |   |   | 2,729 |   |   | – |   |   | (5 | ) |   | 4,142 |   |   | (44 | ) |   | (44 | ) |   | 4,394 |   |   | (20 | ) |   | (20 | ) |
| Subtotal                                                                                                                                                                           |   |   |   |   |   | 176 |   |   | 1,371 |   |   |   |   |   | (732 | ) |   | (732 | ) |   |   |   |   | 764 |   |   | 764 |   |
|                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Raw                materials derivative contract                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| –                receivable position                                                                                                                                         |   |   | (10 | ) |   | – |   |   | 7 |   |   | 394 |   |   | 54 |   |   | 54 |   |   | 94 |   |   | 25 |   |   | 25 |   |
| –                payable position                                                                                                                                            |   |   | 243 |   |   | – |   |   | (32 | ) |   | 71 |   |   | (11 | ) |   | (11 | ) |   | (510 | ) |   | (47 | ) |   | (47 | ) |
| **Total**                                                                                                                                                                          |   |   |   |   |   | 176 |   |   | 1,346 |   |   |   |   |   | (689 | ) |   | (689 | ) |   |   |   |   | 742 |   |   | 742 |   |
|                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Out                of the financial instruments disclosed in the table above, contracts                with                a fair value of 754 has been used for hedge accounting. |   |

----

**Hedge      accounting**

|                                                           |       |       |       |           |       |           |       |       |    | **Other**              | ** ** | **Fair** | ** ** |
|----------------------------------------------------------------|------------|------------|------------|----------------|------------|----------------|------------|------------|---------|------------------------|------------|----------|------------|
| ** **                                                     | ** ** | ** ** | ** ** | **Currencies** | ** ** | **currencies** | ** ** | **value**  |    |
| Millions                                                       |       |       |       | USD            |       | GBP            |       | EUR        |    | Net                SEK |       |     |       |
| Due                date 2007                                   |       |       | amount     |           |       | 1,748          |       |       | 253     |                   |       | 790      |       |   | 5,944 |   |   |   |   |
| Due                date 2008                                   |       |       | amount     |           |       | 184            |       |       | – |                   |       | –  |       |   | – |   |   |   |   |
| Due                date 2009                                   |       |       | amount     |           |       | 51             |       |       | – |                   |       | –  |       |   | – |   |   |   |   |
| **Total**                                                      | ** ** | ** ** | ** ** | ** **     | ** ** | **1,983**      | ** ** | ** ** | **253** | ** **             | ** ** | **790**  | ** ** | ** ** | **5,944** | ** ** |   |   |   |
|                                                           |       |       |       |           |       |           |       |       |    |                   |       |     |       |   |   |   |   |   |   |
| Average                contract rate                           |       |       |       |           |       | 7.29           |       |       | 13.43   |                   |       | 9.15     |       |   |   |   |   |   |   |
| **Fair                value of outstanding forward contracts** | ** ** | ** ** | ** ** | ** **     | ** ** | **598**        | ** ** | ** ** | **7**   | ** **             | ** ** | **39**   | ** ** | ** ** | **120** | ** ** | ** ** | **764** |   |

----

**Note        38 Net income and shareholders’ equity in accordance with US        GAAP**

| **NET                    INCOME**                                                                          |   | **2004** |       | **2005** |   | **2006**   |   |
|------------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|------------|--------|
| Income                    for the period in accordance with IFRS                                           |   |     | 9,907      |     |   | 13,108     |   |   | 16,318 |   |
| Items                    increasing (decreasing) reported net income                                       |   |     |       |     |   |       |   |   |   |   |
| Derivative                    instruments and hedging activities (A)                                       |   |     | 228        |     |   | 9          |   |   | 37 |   |
| Business                    combinations (B)                                                               |   |     | -          |     |   | -          |   |   | 1,712 |   |
| Investments                    in debt and equity securities (C)                                           |   |     | 5,157      |     |   | -          |   |   | - |   |
| Restructuring                    costs (D)                                                                 |   |     | 311        |     |   | (153       | )      |   | (36 | ) |
| Post-employment                    benefits (E)                                                            |   |     | (286       | )        |   | (307       | )      |   | (384 | ) |
| Product                    development (F)                                                                 |   |     | (565       | )        |   | (1,601     | )      |   | (1,110 | ) |
| Entrance                    fees, aircraft engine programs (G)                                             |   |     | (392       | )        |   | (156       | )      |   | 38 |   |
| Other                    (H)                                                                               |   |     | (60        | )        |   | 98         |   |   | 360 |   |
| Income                    taxes on above US GAAP adjustments (I)                                           |   |     | 156        |     |   | 438        |   |   | (2,577 | ) |
| Net                    increase (decrease) in net income                                                   |   |     | 4,549      |     |   | (1,672     | )      |   | (1,959 | ) |
| Minority                    interest (J)                                                                   |   |     | (40        | )        |   | (38        | )      |   | (50 | ) |
| **Net                    income (loss) in accordance with US GAAP**                                        |   |     | **14,416** |     |   | **11,398** |   |   | **14,309** |   |
| **Net                    income (loss) per share, SEK in accordance with US                    GAAP** |   |     | **34.44**  |     |   | **28.12**  |   |   | **35,35** |   |
| Weighted                    average number of shares outstanding (in thousands)                            |   |     | 418,529    |     |   | 405,242    |   |   | 404,633 |   |

| **SHAREHOLDERS’                  EQUITY**                            |   | **2005** |       | **2006** |   |
|----------------------------------------------------------------------------|--------|----------|------------|----------|--------|
| Shareholders’                  equity in accordance with IFRS        |   |     | 78,768     |     |   | 87,188 |   |
| Items                  increasing (decreasing) shareholders’ equity  |   |     |       |     |   |   |   |
| Derivative                  instruments and hedging activities (A)         |   |     | 140        |     |   | 177 |   |
| Business                  combinations (B)                                 |   |     | 5,932      |     |   | 5,596 |   |
| Investments                  in debt and equity securities (C)             |   |     | -          |     |   | - |   |
| Restructuring                  costs (D)                                   |   |     | 158        |     |   | 155 |   |
| Post-employment                  benefits (E)                              |   |     | 990        |     |   | (2,862 | ) |
| Product                  development (F)                                   |   |     | (6,450     | )        |   | (7,439 | ) |
| Entrance                  fees, aircraft engine programs (G)               |   |     | (1,482     | )        |   | (1,453 | ) |
| Other                  (H)                                                 |   |     | 70         |     |   | 438 |   |
| Income                  taxes on above US GAAP adjustments (I)             |   |     | 1,620      |     |   | 3,342 |   |
| Net                  increase (decrease) in shareholders equity            |   |     | 978        |     |   | (2,046 | ) |
| Minority                  interest (J)                                     |   |     | (260       | )        |   | (284 | ) |
| **Shareholders’                  equity in accordance with US GAAP** |   |     | **79,486** |     |   | **84,858** |   |

----

**Significant      differences between IFRS and US GAAP for Volvo**

**A**

|                                                                                                           |   | **Net                  income** |    | **Shareholders’                  equity** |   |
|----------------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|-------------------------------------------------|--------|
| **Accounting                  for derivative instruments and hedging activities**                              |   | **2004**                        |    | **2005**                                        |   | **2006** |   | **2004** |   | **2005** |   | **2006** |   |
| Derivatives                  Commercial exposure                                                               |   |                            | -117    |                                            |   | - |   |   | - |   |   | 1,170 |   |   | - |   |   | - |   |
| Derivatives                  Financial exposure                                                                |   |                            | 23      |                                            |   | (4 | ) |   | (3 | ) |   | 672 |   |   | (3 | ) |   | (6 | ) |
| Basis                  adjustment on derecognised fair value hedges                                            |   |                            | 322     |                                            |   | 13 |   |   | 40 |   |   | (542 | ) |   | 143 |   |   | 183 |   |
| **Derivative                  instruments and hedging activities in accordance with US                  GAAP** |   |                            | **228** |                                            |   | **9** |   |   | **37** |   |   | **1,300** |   |   | **140** |   |   | **177** |   |

**B**

----

|                                                                     |   | **Shareholders’                  equity** |       |
|--------------------------------------------------------------------------|--------|-------------------------------------------------|------------|
| **GOODWILL**                                                             |   | **2004**                                        |       | **2005** |   | **2006** |   |
| Goodwill                  in accordance with IFRS                        |   |                                            | 10,321     |   |   | 11,072 |   |   | 8,849 |   |
| Items                  affecting reporting of goodwill.                  |   |                                            |       |   |   |   |   |   |   |   |
| Acquisition                  of Renault VI and Mack Trucks Inc           |   |                                            | 3,744      |   |   | 3,744 |   |   | 3,744 |   |
| Acquisition                  of Volvo Construction Equipment Corporation |   |                                            | 1,328      |   |   | 1,328 |   |   | 1,328 |   |
| Other                  acquisitions                                      |   |                                            | 860        |   |   | 860 |   |   | 860 |   |
| Release                  of tax allowance in Mack Trucks Inc.            |   |                                            | -          |   |   | - |   |   | (336 | ) |
| Net                  change in accordance with US GAAP                   |   |                                            | 5,932      |   |   | 5,932 |   |   | 5,596 |   |
| **Goodwill                  in accordance with US GAAP**                 |   |                                            | **16,252** |   |   | **17,004** |   |   | **14,445** |   |

**C**

**D**

----

**E.**

** **

|                                                                                                         |   | **2006** |       |
|--------------------------------------------------------------------------------------------------------------|--------|----------|------------|
| Provision                  for post employment benefits under IFRS                                           |   |     | (6,651     | ) |
| Difference                  in unrecognized amounts                                                          |   |     | 4,537      |   |
| Additional                  minimum pension liability                                                        |   |     | (1,056     | ) |
| **Provision                  for post employment benefits before adoption of FAS                  158**      |   |     | **(3,170** | **)** |
| Adoption                  of FAS 158 (*                                                                      |   |     | (6,343     | ) |
|  **Provision                  for post employment benefits after adoption of FAS                  158** |   |     | **(9,513** | **)** |

| **Funded                    status**            |   | **Dec                    31, 2006** |       |
|-------------------------------------------------|--------|-------------------------------------|------------|
| Projected                    benefit obligation |   |                                | -34,740    |   |
| Plan                    assets at fair value    |   |                                | 25,227     |   |
| **Funded                    status**            |   |                                | **(9,513** | **)** |

| **Net                  periodical costs for post-employment benefits**                                                            |   | **2004** |     | **2005** |   | **2006** |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|----------|----------|----------|--------|----------|--------|
| Net                  periodical costs in accordance with IFRS                                                                     |   |     | 4,401    |     |   | 3,736    |   |   | 3,739 |   |
| Net                  periodical costs in accordance with US GAAP                                                                  |   |     | 4,687    |     |   | 4,043    |   |   | 4,122 |   |
| **Adjustment                  of this year’s income in accordance with US GAAP, before                  income taxes** |   |     | **(286** | **)**    |   | **(307** | **)**  |   | **(383** | **)** |

----

| **Net                provisions for post employment benefits**                                                    |   | **Dec                31, 2004** |        | **Dec                31, 2005** |   | **Dec                31, 2006** |   |
|-------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|---------------------------------|--------|---------------------------------|--------|
| Net                provisions for post employment benefits in accordance with                IFRS                 |   |                            | (14,332     | )                               |   | (11,462                         | )      |   | (6,651 | ) |
| Difference                in unrecognized actuarial gain/losses                                                   |   |                            | 5,266       |                            |   | 5,762                           |   |   | (2,958 | ) |
| Difference                in unrecognized past service costs                                                      |   |                            | 602         |                            |   | 686                             |   |   | 96 |   |
| Minimum                liability adjustments                                                                      |   |                            | (4,542      | )                               |   | (5,458                          | )      |   | - |   |
| **Net                provisions for post employment benefits ****in                accordance with US GAAP** |   |                            | **(13,006** | **)**                           |   | **(10,472**                     | **)**  |   | **(9,513** | **)** |

**F.**

**G.        **

**H.**

**Interest        expenses:**

**Leasing:**

**Share-based        payments:**

**Guarantees:        **
** **

----

**Revenue      recognition:**

**Variable      Interest Entities:**

**Contracts      with character of a leasing agreement:**

**Cash      flow:**

**Payroll      Tax: **

**I.**

**J.**

----

**Recent      US accounting pronouncements issued but not yet adopted**

*Accounting      for Income Taxes.*

**Segment        reporting**

|                                    |   | 2004   |       | 2005   |   | 2006        |   |
|-----------------------------------------|--------|--------|------------|--------|--------|-------------|--------|
| Long-lived                    assets: 1 |   |   |       |   |   |        |   |
| Europe                                  |   |   | 69,269     |   |   | 75,429      |   |   | 84,863 |   |
| North                    America        |   |   | 21,341     |   |   | 27,128      |   |   | 21,975 |   |
| South                    America        |   |   | 1,934      |   |   | 2,749       |   |   | 2,725 |   |
| Asia                                    |   |   | 2,534      |   |   | 3,198       |   |   | 3,659 |   |
| Other                    markets        |   |   | 410        |   |   | 429         |   |   | 418 |   |
| **Total**                               |   |   | **95,488** |   |   | **108,933** |   |   | **113,640** |   |
|                                    |   |   |       |   |   |        |   |   |   |   |
| *Of                    which:*          |   |   |       |   |   |        |   |   |   |   |
| Sweden                                  |   |   | 26,124     |   |   | 27,099      |   |   | 37,486 |   |
| United                    States        |   |   | 17,842     |   |   | 21,531      |   |   | 17,321 |   |
| France                                  |   |   | 15,641     |   |   | 17,426      |   |   | 16,077 |   |

----

**Allowance      for customer-financing receivables**

| **Valuation                  allowance for customer finance receivables**               |   | 2004   |   | 2005   |   | 2006   |   |
|-----------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Balance                  at December 31, preceding year                                 |   |   | 1.364  |   |   | 1,344  |   |   | 1,756 |   |
| Change                  of reserve charged to income                                    |   |   | 535    |   |   | 446    |   |   | 197 |   |
| Utilization                  of reserve related to  actual                  losses |   |   | (422   | )      |   | (285   | )      |   | (254 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Translation                  differences                                                |   |   | (52    | )      |   | 191    |   |   | (131 | ) |
| Reclassifications,                  etc.                                                |   |   | (81    | )      |   | 60     |   |   | 13 |   |
| Balance                  at December 31, current year                                   |   |   | 1.344  |   |   | 1.756  |   |   | 1.581 |   |

**Stock        based compensation**

**Note        38 Subsequent events **

**Volvo        completes purchase of Nissan Diesel. **

**Volvo        finalizes acquisition of Ingersoll Rand’s road development equipment        division.**

----

**Decisions      on several major investments. **

**Annual      General Meeting of AB Volvo.**

----

**ITEM      19. EXHIBITS**

| **1.** | Articles                of Association as amended April 4, 2007 (in English                translation).** ** |
|--------|--------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|

| **2.*** | Amended                and Restated Deposit Agreement among AB Volvo, JP Morgan Chase Bank                N.A.                as depositary and holders of ADSs, dated as of January 5, 2005. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| **8.** | For              information concerning Volvo’s group structure and significant              subsidiaries, including the name, country of incorporation, proportion              of              ownership interest and, to the extent different, proportion of voting              power held, see Note 4 to Volvo’s consolidated financial              statements. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| **12.1** | Certification              of Leif Johansson, President and Chief Executive Officer of AB Volvo              (publ), pursuant to Section 13(a) of the Securities Exchange Act of              1934,              as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley              Act              of 2002. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| **12.2** | Certification              of Par Östberg, Senior Vice President and Chief Financial Officer of AB              Volvo (publ), pursuant to Section 13(a) of the Securities Exchange              Act of              1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley              Act of 2002. |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| **13.1** | Certification              pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section              906 of              the Sarbanes-Oxley Act of 2002. |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                                   |                                                            |                                 |
|----------------------------------------|-----------------------------------------------------------------|--------------------------------------|
|                                   | AKTIEBOLAGET                VOLVO (publ)                        |
|                              |                                                       |                            |
| Dated: June              19, 2007 | By:                                                   | /s/ Leif              Johansson |
|                                   | Name:                 Leif                Johansson        |
|                                   | Title: President              and Chief Executive Officer  |