• Diesel share in Volvo Cars' European sales up from 20 to more than 50 percent
• New diesel engine generation improves competitiveness in every segment
• Annual target is 85,000 new five-cylinder diesel-powered cars in Europe
• Production start mid-May

In 2004, petrol-powered cars were overtaken by diesel cars on Europe's roads +óGé¼GÇ£ at least as a sales statistic. Exactly 110 years after Rudolf Diesel launched his groundbreaking invention, the proportion of diesel-powered cars in Europe exceeded 50 percent for the first time.

Volvo Cars' share of the diesel car market is growing rapidly. When production of the first in-house developed diesel engine started in 2001, the proportion of diesel engines in the company's European sales figures was just over 20 percent.

Today, four years later, diesel accounts for more than 50 percent of Volvo Cars' European vehicle sales. The next step is to further boost the competitiveness with the introduction of a new, more powerful and cleaner generation of Volvo's five-cylinder turbocharged diesel engine.

Consistent increase
The increase in the proportion of diesel cars in Europe has taken place since 1998, when common-rail fuel injection technology was launched on a broad front. This made diesel a serious competitor to petrol power in critical customer-wanted areas such as driveability and noise levels.

In addition, the low fuel consumption meant that legislators in increasing numbers of countries favoured diesel power through tax incentives.

"Highly effective particulate filters, one of the cornerstones in our system upgrade, give the diesel engine additional environmental benefits. What is more, diesel engines are becoming increasingly dynamic and more comfortable. That is why the diesel engine's market share is set to increase still further in Europe. It is likely that 70 percent of all new cars in Europe will be powered by diesel by 2010," says Gerry Keaney, Senior Vice President Sales, Marketing and Customer Service at Volvo Cars.

Considerable variations
Diesel's market share varies considerably between different markets. The market is topped by Austria, Belgium, France and Luxemburg, with diesel sales exceeding 70 percent.

Spain, Italy, Portugal and Germany are between 60 and 40 percent. Britain is on the upswing and, despite a high diesel fuel prices, is above the 30 percent mark. The proportion of diesel-powered cars in Greece and Sweden remains below 10 percent.

Diesel's share is greatest in the large-car segments, where the Volvo V70, Volvo XC70 and Volvo XC90 compete. In the premium SUV segment, diesel accounts for more than 80 percent of sales, while the Volvo V70 wagon has a diesel share above 60 percent.

The new generation gives high market coverage
The new generation of Volvo's in-house manufactured five-cylinder diesel engines will initially be available in the Volvo S60, Volvo V70, Volvo XC70 and Volvo XC90.

"With our D5 turbo diesel engine now producing another 16kW, rising from 120 to 136kW, Volvo has become extremely competitive in all segments. The Volvo S60 becomes far sportier. The Volvo V70 and XC70 also get a huge boost in power, and for the XC90, diesel becomes a far more attractive choice," explains Keaney.

Increased volumes
Volvo's first generation five-cylinder diesel engine was produced in significant volumes +óGé¼GÇ£ 305,000 +óGé¼GÇ£ from June 2001 to May 2005.

Volvo expects to double volume with its second-generation diesel engine. Target production volume is more than 600,000 units.

In 2006, Volvo expects to sell 85,000 units of the new five-cylinder diesels. Production of the new generation of turbodiesel engines starts at Volvo Cars engine factory in Skovde, Sweden in mid-May.

Specifications for the XC90 Diesel

For further information please contact:
Todd Hallenbeck
Public Affairs Manager
Volvo Car Australia
65 Epping Road
North Ryde, NSW 2113
Phone: 02-9020 1613
Mobile: 0412 259 635
Fax: 02-9020 1597
Email: thallen2@volvocars.com