Volvo Ventures into V-8 Verve

IRVINE, CA — Volvo Cars will launch its foray into the world of V-8 engines with its popular XC90 cross/utility vehicle next year and likely won't end there.

The XC90's 4.4L V-8 engine, supplied by Yamaha Motor Co. Ltd., has potential for Volvo passenger cars, Volvo Cars of North America CEO Victor Doolan tells Ward's during an interview at Premier Automotive Group's headquarters here.

“It's a great engine — and it can obviously find a place in our cars, in the proper range,” he says in response to whether the XC90 V-8 program can be considered a test for further applications.

The Swedish auto maker expects 75% of the V-8s to be sold in North America, Doolan says. That suggests a potential for nearly 19,000 units annually to be sold here, based on Volvo's current plan to purchase as many as 25,000 V-8 mills from Yamaha annually. Volvo North America is scheduled to get 15,000 V-8s in 2005.

While it has been announced that parent Ford Motor Co. can dip into the Yamaha engine stock for other vehicles under its brand umbrella, it has been unclear whether Volvo would matriculate the engine to its car line, namely the S80 sedan and its XC70 counterpart, both of which share the XC90's chassis design. The smaller S60 sedan also shares the P2 platform.

When Ward's first learned Volvo was in line for a V-8, sources indicated passenger cars likely would get the engine in addition to the XC90.

Doolan's vote of confidence is a clear indication Volvo will not sit on its hands when it comes to expanding its product range in North America and is not afraid to rely on V-8 engines for incremental growth.

Volvo's current engine lineup is heavily populated by smaller, fuel-efficient turbocharged power plants — a signature of the brand's performance promise, Doolan says.

However, the Yamaha V-8 is noted for comparable fuel economy with the turbocharged 18-mpg (13L/100 km) I-6 Volvo currently uses. The Yamaha V-8 also is a compact engine design, allowing Volvo engineers to carve space for it in the P2's relatively tight engine bay.

The V-8 is critical to Volvo's future for two reasons: The auto maker's growth goal for the U.S. and its aim to be known for performance.

Doolan says 35% of Volvo's global deliveries are targeted for the U.S. market, which currently eats up V-8-powered passenger vehicles with the same fervor that Europe digests diesels (now 50% of the market).

When it comes to the XC90, of which about 37,000-38,000 will be sold in the U.S. this year, the V-8 furthers the CUV's potential to retain its industry-leading residual value, even as it enters it third model year.

Making the V-8 available to the S80 may serve to prop up the large sedan's sales in the U.S. market. Sales slipped 2.5% through the first nine months vs. year-ago, following a 5% slide in 2003 compared with 2002.

S60 sales were off dramatically through September, down 18%, following an 8% drop in 2003.

In addition to spiking sales, Volvo wants to “add aspiration and inspiration to safety,” Doolan says, pointing to performance as one of three core values the brand espouses.

While Volvo long has been identified with safety, the Swedish auto maker is moving beyond, recently adding R-edition performance variants of the S60 and V70 wagon to its lineup.

“I believe Volvo, as a brand, has to deliver on three very important issues: safety, of course, versatility and performance,” Doolan says. “That is what our customers want from us.”