“This is the biggest single investment ever decided on by Volvo’s board,” board president Finn Johnsson told financial daily Dagens Industri, without divulging exactly how much money would be invested.

Dagens Industri cited industry sources saying the company would pump at least 20 billion kronor into developing new lorry models between 2009 and 2013 and might increase the amount to 30 billion if needed.

The world’s second largest truck maker after Daimler aimed to make more fuel-efficient and hybrid vehicles, the paper said.

Volvo Group, which in addition to its Volvo Trucks also sells the truck brands Renault, Nissan Diesel, Eischer and Mack, posted a net loss of 1.35 billion kronor in the fourth quarter last year.

Auto makers around the world have been hit hard by the global economic downturn, which has led to a sharp decline in demand for vehicles.

Following Thursday’s announcement, Volvo saw its share price jump 4.49 percent in early afternoon trading on the Stockholm stock exchange, where the OMX 30 index was up 2.72 percent.