Volvo to develop 16-litre engine
STOCKHOLM, Sweden (June 4, 2001) — Volvo AB said it plans to invest $132 million US to develop a new 16-litre diesel engine, the first product of a consolidated engine program with Renault’s RVI truck division and its U.S. subsidiary Mack Trucks Inc.
The new engine will be used in Volvo’s trucks as well as buses and construction equipment. It will also be used for marine and industrial applications.
“The acquisition of Renault VI and Mack provides us with the necessary volume and base of expertise to develop a proprietary 16-litre diesel engine and manufacture it in-house,” said Volvo chief executive Leif Johnson.
The consolidated engine program will form a large part of the expected synergies from the merger. Volvo has said it expects to see synergies from the Renault VI/Mack acquisition of around $300 million per year starting in 2003.
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