Volvo to develop its own car diesel engine

12/21/1998 10:57 AM EST

VOLVO TO DEVELOP ITS OWN CAR DIESEL ENGINE


Volvo Car Corporation has decided to develop its own diesel engines for
passenger vehicles. Diesel engines will be available in Volvo cars within a
couple of years. The engines will be manufactured in Volvo's factory in
Skövde, Sweden.


"Volvo Car Corporation has the advantage that our existing petrol engines, the
N-engines, are already from the start developed with diesel variations in
mind", says Volvo Car Corporation's MD Tuve Johannesson. This is a
prerequisite for a high level of efficiency in the production process and
installation in vehicles.

The development will be carried out by Volvo Car Corporation's engine division
and the manufacture is planned to Volvo Car Corporation's engine factory in
Skövde which can utilise the existing structures for production, thereby
taking advantage of economies of scale.

There are three main reasons for Volvo Car Corporation's decision to develop
and produce its own diesel engines. Firstly, the demand for diesel engines in
passenger vehicles has increased greatly, particularly in Europe - an increase
that is predicted to continue (the proportion of diesel engines is estimated
to be around 20% of Volvo's total engine production; in other words between
100,000 -150,000 engines by around 2003). In addition, the efficiency of both
petrol/gasoline and diesel engines will be improved significantly in the next
5-10 years, and both these types of engine will be further developed for
applications in both conventional and hybrid vehicles. Finally, diesel engines
are superior to petrol/gasoline engines in terms of fuel consumption and meet
the current emission requirements in Europe. With new technology, they will
also be able to meet future emission requirements.

"Our decision is of great strategic significance," says Volvo Car
Corporation's MD Tuve Johannesson. Volvo has a great deal of competence in
diesel engine technology, which will be an important foundation in the
development of the new generation of diesel engines.


December 21, 1998