Harnessing diesel power to a sophisticated new electronic four-wheel drive system should soon be helping Volvo break Germany's dominance in the new niche sector for prestige off-road estate cars.
The Swedish manufacturer's diesel-powered V70 XC model is poised to turn the tables on the success of the Audi Allroad and A6 2.5 TDI ranges, believes Volvo UK product manager Dean Shaw.
He said: 'Given that our original V70 Cross Country started the trend for more muscular-looking hold-all models with off-road capabilities, we have found it particularly frustrating to be held back by not being able to offer diesel power. 'As we had a more restricted choice of engines, we've had to sit by and watch Audi steal a march in the showrooms.
'But things are different now - I'm confident that we will soon be in lead position.' Speaking in Sweden, he claimed the D5, Volvo's first home-grown turbodiesel motor, armed the vital XC derivative with significant advantages for business users over the Allroad Tiptronic 2.5 TDI.
He said: 'We are still waiting for the final carbon dioxide emission figure to be confirmed, but our understanding is that it will be sufficiently low for the car to be placed in the 29% benefit-in-kind tax band.
'This is a significant development in our campaign to win a greater share of fleet business because it represents a considerable saving over the 35% top band rating of the Allroad.
'This statistic alone should make a strong case for the corporate buyer to show greater interest in our brand.'
Although he declined to be specific on numbers, Shaw said the company was holding a large bank of advance orders for the D5 version, which is due to go on sale in September priced between £28,620 and £31,120 on-the-road.
Shaw said: 'Interest for vehicles in this sector is high and we expect to sell about 800 examples next year as the demand for premium vehicles with diesel engines continues to rise. This is a funky alternative to the traditional estate, and the fact that it is not an SUV gives it a distinct advantage.
'Our research indicates that many corporate motorists want the luxury car they use during the week to fill the role of active lifestyle transport at the weekends when they get out with their boats or caravans. The XC fills that bill.'
Volvo turned to Haldex, the Swedish maker of the Volkswagen 4MOTION system, to jointly develop its new four wheel drive layout. Using electronic control, it is front biased but can route up to 65% of power to the rear, depending on need.
The system has a better response to road conditions than the viscous coupling arrangement used in Volvo's previous AWD and starts diverting the drive as soon as one of the front wheels slips by just one seventh of a revolution.
But because it is also linked with the car's traction control gadgetry, it is sufficiently intelligent to distribute power between the left and right of the car, and also deactivates automatically under braking to allow the anti-lock equipment to work most effectively.
Initially, the XC will be launched as an automatic-only car, but five-speed manual transmission will be available next spring.
Even in basic S spec, the Volvo has leather upholstery, a power-operated driver's seat, self-levelling suspension, alloy wheels and a pro-logic four CD player. SE trim brings a road traffic information system with satellite navigation and television, heated front seats and power operation for the front passenger and a headlamp wash-wipe system.
Behind the wheel
VOLVO'S new D5 engine is a key element of the looming war for leadership of the latest niche segment in Britain's increasingly diverse company car market and officials at the firm are convinced it gives the V70 XC all it takes to trounce the Audi Allroad.
But I'm not so sure that the battle lines are so clearly drawn between the two major contenders in this crossover sector. In spite of its advanced design, the D5's engine output still falls short of the prodigious amount of power developed by its slightly larger rival. And because the XC's automatic transmission takes up to 2.5 seconds to shift between ratios, the nature of progress tends to be more cruising than dashing. However, it is at all times smooth, making this commodious hold-all remarkably car-like and composed over all surfaces.
As with so many other rivals, Volvo also loses points to Audi when it comes to fit and finish. As a result, the XC appears more utilitarian than plush, and features an extensive amount of plastic trim that's hard to the touch.
This is a pity, because the company's tradition in safety means money has been invested elsewhere in items that are hidden from view, and even in basic trim, the car comes with significant features like traction control, dynamic stability gadgetry, an inflatable curtain and whiplash protection.
For all that, the dashboard is designed for ease of control and most switchgear is conveniently located. Surprisingly for a car that has a higher ground clearance than usual and long-travel suspension, on-road handling is excellent. Although it has not been designed to tackle Everest, the new all-drive system proves capable of finding traction on loose surfaces and had little trouble achieving a series of smooth starts on a steep track with a caravan hitched up.
With supportive seating and ample stretching room, the new model has considerable potential as effective long distance transport, a point effectively underlined by economy figures that suggest more than 500 miles can be covered on a tankful.
Model: Volvo V70 XC D5
Engine (cc): 2,401
Max power (bhp/rpm): 161/4,000
Max torque (lb-ft/rpm): 251/1,750
Max speed (mph): 121
0-62mph (sec): 11.5
Fuel consumption (mpg): 33.6
CO2 emissions (g/km): 222
Transmission: 5-sp auto with lock-up and winter mode
On sale: September
Price (OTR): £28,620 – £31,120