The growth in Volvo's earnings in 1997 was satisfactory. Sales and operating income increased in all operating sectors and operating efficiency and productivity increased.

1997 was characterized by successful exploitation of earlier basic investments through new versions of products, a high rate of product development and establishments in such growth markets as China, India, Russia and Eastern Europe.

The turbulence in East Asia is resulting in lower sales at the present time. But, in a longer perspective, we believe that the growth and customer structure in the region well justify a strong presence in these markets.