LAS VEGAS – Volvo Car Corp. is betting Scandinavian luxury and design will help its all-new ’07 Volvo S80 flagship sedan take on mid-luxury heavy-hitters such as the BMW 5-Series and Lexus GS.

“The S80 has an evolutionary design compared to the old S80, which was very revolutionary when it came out,” Anders Robertson, Volvo Cars of North America LLC product manager, tells Ward’s at a media event here.

“We like to describe that as understated elegance, form and function; it’s not just there to look flashy.

“We want to make sure we keep the same (Scandinavian) heritage in this new car,” he adds. “This is totally, from the ground up, a brand new car. It shares nothing but the name with the outgoing S80.”

For ’07, Volvo ditched the 2.0L turbocharged 5-cyl. engine, replacing it with a new 3.2L inline 6-cyl. that produces 235 hp. A 311-hp V-8 mill, borrowed from the XC90 cross/utility vehicle, also is available, the first-ever V-8 in a Volvo sedan.

Both engines are mated to an Aisin Warner Inc. 6-speed automatic transmission.

In addition to its Scandinavian heritage, Robertson says the new S80’s pricing structure will garner a closer look by luxury car buyers.

The I-6 version will start at $38,705, while the V-8, which comes standard with all-wheel drive, will sticker at $47,350. Neither price includes destination or delivery charges.

“It’s a very aggressive price point,” Robertson says. “We worked on it for a long time to ensure we’re going to get a very good residual value on this car. Making sure our buyers get a good value is very important to us.”

Volvo also made sure the new S80 compares with competitors when “showroom equipped,” which it describes as cars with items most buyers want, such as a climate package and metallic paint. The I-6 S80 stickers at $40,600, Robertson says. The V-8 model’s base price is $49,245.

“Basically nothing else can really touch us when you get to these price points,” he says, noting Kelley Blue Book lists a showroom-equipped BMW 525 at $47,670. The closest competitor in price, Robertson says, is the Infiniti M35 at $42,150.

Robertson doesn’t include the Swedish-built Saab 9-5 among the S80’s competitors, noting the volume is lower. “I’m not quite sure if the 9-5 is really up to par with the competition,” he says.

VCNA expects the S80, which arrives in dealerships Feb. 1, to sell 25,000-30,000 units annually, with approximately 20%-30% of customers opting for the V-8 model and 70%-80% choosing the I-6 version.

The modest sales goals were set for a reason, Robertson says.

“We’re very cautious about overloading with too many cars for the retailers, so we have to let the cars find their own sales base,” he says.

“The peak year for the outgoing S80 was almost 30,000 units, but then it fell down quite a lot from that. Over (their) lifecycle, we think the new (model) and the (outgoing) car will have very similar volumes.”

bpope@wardsauto.com