[1] Assar Gabrielsson held a bachelor's degree in economics and worked as a sales manager with bearing manufacturer SKF in Gothenburg in the early 1900s.

In June 1924, when Assar Gabrielsson met his old friend Gustaf Larson in Stockholm, he unveiled his plans to establish the manufacturing of a new Swedish automobile.

Assar took the economic risks himself and Gustav, in the worst case, would have worked on the project without being rewarded, but would still have his salary from AB Galco in Stockholm.

Most of the startup capital Assar intended to use for the project was extra sales commissions that he had saved from his time as managing director for the SKF subsidiary in Paris from 1921 to 1922.

The original idea, presented by Assar to SKF, consisted of a few main points; the central idea was to start an automobile manufacturing business within SKF to gain advantages over competitors when developing new bearings for the automobile industry, which would also lead to increased sales of bearings and in turn lead to positive effects on Swedish industry as a whole.

In a lot of orders that Gustav Larsson made himself, he referred to Assar Gabrielsson as a "guarantee" that the deliveries would be paid by him personally.

Assar and Gustav took that first car and drove themselves, on bumpy roads, down to SKF in Gothenburg to show the SKF-board and now present the final investment plan.

At a board meeting held in Hofors, Sweden on 10 August 1926, SKF decided to use the old subsidiary company Volvo AB, for the automobile project.

AB Volvo, that was first registered in 1915 on the initiative of Björn Prytz, was originally set up to be used for a special series of ball bearings for the American market but it was never really used for this purpose.

A contract was signed on 12 August 1926 between SKF and Assar, stipulating that all ten prototype cars, engineering drawings, calculations etc.

Gustav Larson was at the same time appointed vice president and technical manager and left his employment at AB Galco in Stockholm.

Volvo did not show any profit for the first couple years and SKF invested a large amount of capital to keep the company running.

Björn Prytz and Assar Gabrielsson managed to convince the SKF board to call the deal off, just one day before Charles Nash arrived by boat to Gothenburg.