Volvo to Boost European Truck, Engine Capacity

Volvo AB will invest more than $240 million to expand engine and gearbox production in Europe, Bloomberg reported Friday.

Volvo will invest about $160 million at its heavy diesel facility in southern Sweden, and about $57 at a gearbox site, Bloomberg said, citing the company, whose sales are booming in Eastern Europe and Asia.

“As a result of increased demand for the Volvo Group’s products in emerging markets such as Eastern Europe and Asia, production requirements for heavy diesel engines and heavy gearboxes are also rising,” Volvo said in a statement.

The investment will allow Volvo to boost diesel-engine capacity by 20% and heavy-gearbox production by 50% by the end of 2009, Bloomberg said. Volvo is also spending $135 million to build a Russian assembly plant.

The truck maker last month forecast that the eastern European truck market will double by the end of 2010 as the region's economy expands.

Volvo is the parent company of U.S. truck makers Volvo Trucks North America and Mack Trucks.