July 14^th, 2003

New XC90 challenges Australian luxury SUV segment

LAUNCHING of the XC90 is an integral part of Volvo Car Corporation’s plan to secure profitable growth year after year.

“XC90 will increase our sales. It will take us closer to 500,000 units per year, a milestone on our challenging road to 600,000 cars”, said Hans-Olov Olsson, CEO for Volvo Cars.

The original goal was to sell 50,000 Volvo XC90s per calendar year. Due to demand, production has been increased to an annual level of 80,000. Approximately 65 percent of these will be sold in North America. Europe represents approximately 25 percent and the rest of the world the remaining 10 percent.

Local retail deliveries of the XC90 will start in earnest in the third week of July. Already, there are some 400 orders, according to Volvo Car Australia's managing director, Steve Blyth.

"We have managed to secure additional production, so registrations by year's end should reach 700, factory capacity restricting additional volume in 2003. Our goal for 2004 is 1200 registrations,” said Mr Blyth.

Truck-based SUVs have been on the Australian market over many years, but the European concept of cross-over or soft-roader vehicles started in 1998.. Since then, the segment has more than doubled in size mainly due to the new European participants.

In 1998 cross-over vehicles like the Mercedes ML started to appear on the market. Since then, BMW X5, Lexus RX330, and Honda MDX have expanded the segment, with the Volvo XC90 one of the newest arrivals.

The 2.5T is powered by a 2.5 litre five cylinder, 20 valve light pressure turbo petrol engine that produces 154kW of power at 5000rpm and 320Nm of torque at 1500-4500rpm.

Its even more upmarket sibling, the T6, has a six cylinder, 24 valve twin turbo petrol engine producing 200kW at 5200rpm and 380Nm at 1800-5000rpm.

Both XC90s use an electronically controlled all-wheel drive system that is completely automatic, and claimed to be one of the most technically sophisticated systems on the market today.

By comparison with the earlier Volvo all-wheel drive systems based on a viscous coupling differential, the new AWD system is much more swift in its response. One of the front wheels need only start to slip through a seventh of a single wheel revolution for the system to divert more power to the rear wheels.

"In combination with the high-end versions of the traditional 4WDs, luxury SUVs represent a sizeable and growing market that we intend to tap into", said Mr Blyth.

"The XC90 represents the next generation in this category and combines and adapts the best features from passenger cars and SUVs. In addition, the XC90 incorporates five world firsts in an SUV: Roll Stability Control (RSC), seat pretensioners on all seven seats, a child booster cushion, inflatable side curtains in all three rows and Premair, a system that converts noxious low level ozone into oxygen.

"Above all, this is a Volvo that is absolutely right for our market and is a key part of our growth strategy.”

He said recent market research showed that customers view a luxury SUV as a natural development for Volvo, and it also complements the XC70 perfectly.

The XC90 2.5T is very competitively priced at $69,950, as is the T6 at $82,950. According to Blyth, the pricing and specification will make the XC90 the best-value premium SUV on the Australian market.