Volvo is planning to realign its model range with a new S60 saloon aimed at the BMW 3-series and a new S40 hatchback, both on sale in 2009-10.
The S60 will be based on the same joint Ford/Volvo technology that underpins the Mondeo and S80, and will ensure that Volvo manages to keep a competitor in the key compact executive market.
S60 saved, big rethink for S40
The future of the S60 was in doubt in 2006 as Volvo grappled with organising three overlapping saloons: S40, S60 and S80. It even risked squeezing the mid-range car out of the market altogether.
The solution is for Volvo to keep the S60 in its range, replacing todays model in late 2009, and radically rethinking the replacement for the S40, due in 2010.
So instead of being retooled as a four-door saloon, the S40 will metamorphose into a five-door hatchback, making it a more conventional competitor for the Audi A3 and BMW 1-series. The S40 name is also tipped to disappear, possibly to be replaced by V30.
Focusing the S60 on the BMW 3-series and Audi A4 means that the new Volvo will grow only a little in its external dimensions, since the latest models from Germany have swollen in size to match todays S60.
It will get a slightly longer wheelbase, but to take on the German pair the new S60 will also need sharp styling, excellent interior quality and much-improved ride and handling.
Volvo engineers are understood to be fighting an internal battle with bean-counters to get the funds to develop an enthusiast-friendly chassis.
Engines will be drawn from the Volvo-Ford parts bin, and will include a much-needed 2.0-litre four-cylinder diesel (a big seller in this class), plus a more powerful 2.2-litre diesel. To battle BMW and Audis six-cylinder diesels, Volvo can also call on its D5 family of five-pot oil-burners.
Also in the pipeline is a downsized turbocharged petrol engine whose 1.6-litre capacity can produce the power of 2.0-litre petrol but with much better fuel economy and CO2 emissions.
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