AB Volvo has made a 7 billion Swedish kronor provision to address problems related to a faulty emissions-control component.
In October, Volvo admitted that its truck and bus engines might be exceeding nitrogen oxide emission limits after an emissions control component was found to be degrading quicker than expected.
Volvo said the estimated costs were based on vehicle testing, statistical analysis and discussions with relevant authorities, and that it will continuously assess the size of the provision.
The Swedish heavy vehicle maker said the provision would impact operating income in fourth quarter 2018, while negative cash flow will begin this year and gradually build up in the coming years.
The truckmaker said it will continuously assess the size of the provision as the matter develops.
As of Jan. 3, US$1 was equivalent to 9.00 Swedish kronor.