Volvo is confident the introduction of a new diesel engine that it describes as world leading will boost its sales across Europe.

The Swedish manufacturer has announced its first in-house-manufactured diesel engine, which it says 'is playing a leading role in the hunt for continued profitable growth'.

The manufacturer said its sales target this year is for 33,000 units in the large car segment – but that it expects this number to increase to 50,000 diesel-powered Volvo S60, S80 and V70 models next year.

'We're confident that our new diesel engines will give us a major upswing in European sales,' said Volvo president Hans-Olov Olsson.

Citing the fact that diesel sales account for three out of four new cars in the EU, Volvo said that 'a competitive diesel engine is nothing less than a matter of survival in Europe'.

Although there is considerable demand in all segments it is primarily in the prestige class where the S80, S70 and S60 compete.

'The negative perception of the diesel engine's inadequate power and poor comfort all belong to the past.

'Nowadays, even the most discerning customers want diesels. In our position in the premium segment, this gives us an exciting and tough challenge,' he added.

Olsson said that the proportion of diesel engines in the large-car segment is about 70% in many European countries.

'Up to now,' he added, 'we've not done as well there as we should have, not least because we have only had one engine to offer.'

Volvo said the new engines come in two versions, one producing 163bhp and, later in the year, a 130bhp model.

'With the two new engines, we are now able to cover two important segments. They provide an excellent springboard for further widening the diesel range in the future,' said Olsson.

He said another ace up the manufacturer's sleeve was the fact Volvo is making its own diesel engines in-house.

'A successful car manufacturer must be able to develop and manufacturer a significant proportion of its engine range independently. With in-house developed diesel engines, we have full control over the interplay between the car and powertrain,' he said.

Volvo said Germany will be its largest diesel market with sales of 14,000 diesel engine cars expected this year. Italy will follow with 9,000 cars, Britain with 6,400, Belgium with 5,000 and Spain with 4,500, it added.

'Knowing what I know,' Olsson said, 'I must admit that we should have focussed on our own diesel engines earlier. Now we are going to concentrate on a really powerful entry that will quickly establish a sound basis for success and large volumes.' (July/August 2001)