Volvo backs off on diesel plans

VOLVO has backed off on plans to introduce turbo-diesel powered versions of its XC90 and XC70 SUVs to Australia in 2005.

Instead, the oil-burners will not be seen here until 2006 at the earliest. Last year Volvo Cars Australia announced plans to introduce them in early 2005, supplementing the two petrol-engined models launched locally in July 2003.

VCA managing director Steve Blyth confirmed the revised plan to GoAuto during the recent launch of the new generation S40 compact prestige sedan.

"We cannot get enough supply to satisfy petrol demand so we are not going to start creating more issues for ourselves," he said.

"We are on allocation for the rest of this year with XC90 and for the foreseeable future it is going to be on allocation because we can only get up to about 90,000 production worldwide. We just can’t simply satisfy demand." Mr Blyth said he was not even sure VCA would get its full allotment of 1200 XC90s previously guaranteed for 2004. He’ll want to get every one he can as the cross-over wagon is the reason Volvo is growing its sales here this year, for the first time in years.

VCA is also limited to 800 of the V70-based XC70 cross-over wagons in 2004, 400 S40s and 200 V50s.

The turbo-diesel engine VCA is interested in is the all-alloy 2.4-litre D5, which produces 120kW at 4000rpm and 340Nm at 1750-3000rpm.

Mr Blyth said VCA would eventually launch the D5 here in XC90 and XC70 simultaneously, but that the 90 was expected to be the big seller.

"The people who are buying the XC90 are more likely to go outside the city," he said.

"We are finding we are selling most of the 70s in the city, as we are the 90s, but then the 90s are the cars that are getting out in the countryside and their owners like the fuel economy, the availability of the diesel and the much longer range on the tanks." The delay in introducing turbo-diesel SUVs also means any prospect of VCA adding D5 variants of passenger cars such as S60 and V70 are far distant.

Currently, only Peugeot and Mercedes-Benz retail turbo-diesels in Australia, but Audi is soon to launch an A3 variant, while Mazda and Saab are among those seriously considering such a move.

"To really crack the nut of passenger car diesels you need Ford or Holden to come out with a diesel and I don’t mean a diesel Gemini like they did 20 years ago," Mr Blyth said.

"They need to have a Falcon or a Commodore with a diesel and that will really crack it open.

"Certainly that will help acceptability, but there is also the access to clean bowsers. In the city you can do that, but in the country it’s higher pressure guns … and it’s dirty. I just think there are some issues that need some volume to drive it and that’s where Falcon or Commodore could really do that." * Volvo plans to add a 2.5T version of the S80 luxury car to its range later this year, to fill the $30,000-odd gap between the S60 AWD and the S80 T6. Refreshes of the V70, XC70 and S60 will also arrive before the end of 2004.