Paradoxically, they also seem to be choosing niche cars like sport utility vehicles, which tend to have higher carbon dioxide emissions levels than traditional saloons and estates.
Volvo corporate sales manager Ian Rendle, who has seen the company's diesel sales soar in 2003, as well as strong demand for the new XC90, views both these factors as good news.
Last year, Volvo sold nearly 19,000 diesels – close to 50% of its total sales of 39,062 cars and a figure that would have been unheard of before the introduction of its excellent D5 common rail turbo diesel.
Fleet sales also made up 55% of Volvo's total last year at 21,573 – more than double the number three years ago.
More than half of all Volvos sold last year went to company car drivers and this year, Rendle believes the launch of the new S40 and V50 will give it a stronger presence at the compact end of the premium segment with total sales amounting to 42,000 units.
Rendle is upbeat despite Volvo's reduced sales in 2003 and stands by claims of a few years ago that by 2006 the company will be selling 60,000 cars a year in the UK.
'It will be product-led growth,' said Rendle. 'We will have a full range of S40 and V50 models in 2005, with two diesel engines as well as a 1.6-litre petrol engine as an entry point to the range.
'There will also be a convertible based on the small car platform in due course. 'Reaching 60,000 cars by 2006 will be a challenge but it's something we can achieve.'
Rendle thinks 2004 fleet sales will increase by nearly 500 units, but it will be a stronger year in retail at 42,000 units.
He said: 'A lot of people running small businesses are choosing the XC90 and these are not registering as fleet sales. However, a car like the S60 is about 70% fleet, with the D5 the preferred choice.'
Rendle also points to the continued success of cars like the V70 and S80, which was revised last year. Older vehicles also put in strong performances, like the C70 coupe and convertible which totted up nearly 800 fleet sales last year from a total of 1,800.
Despite an expanding range, Volvo has become renowned for its presence in blue-light fleets with cars like the V70 and 2004 is its 10th consecutive year serving the police sector, although there have been Volvo police cars for much longer than that.
Rendle said: 'Hampshire Constabulary, still a Volvo customer, operated the first Volvo police cars 40 years ago, with the 120 series estate.
'According to the latest surveys, every police force operates at least one Volvo, while the V70 T5 has a 60% share of high performance sector (traffic and armed response).'
The XC70 has also captured the interest of the police, with 27 vehicle orders in December. Its off-road and all-weather capability is viewed as an extra degree of flexibility, with future growth expected in rapid response vehicles for the ambulance sector.
Volvo plans to roll out schemes like its dealer-based rental service through its dealer network this year.
'Volvo Rental is operated by the dealers on a local level,' said Rendle. 'It is not really in the mainstream rental industry. It is driven by demand and it is profitable.'
Volvo Rental is aimed at companies which need an interim increase in their fleet size and range, while the flexible long-term rental provides a solution for those opting out of a company car scheme awaiting delivery of their own vehicle. It also gives company car drivers the choice of a different car for a special appointment, weekend or holiday.
This is a key element of Volvo's strategy that has been successful in boosting sales. Rendle said: 'We often find that once we get people behind the wheel of a Volvo they decide to buy one.'
However, an area where Volvo could be playing catch-up with the likes of BMW, Audi and Mercedes is the lack of a Euro IV-compliant diesel.
Although Volvo expects to achieve Euro IV-compliant diesel versions of the new S40 and V50 in June, it will be another year before the D5 engine in Volvo's large cars will meet the strict new emissions rules. Audi, BMW, Mercedes and Jaguar will all have Euro IV diesel large cars in their ranges this year.
Restricted supply of Volvo diesel cars in the UK has helped keep demand strong and residual values high. This in turn has resulted in competitive leasing rates, with the S60, V70 and XC90 outperforming many of their premium rivals.
Rendle said: 'Supply has been a problem. We could have doubled our XC90 volume last year – adding 4,000 cars to the total – if we could have got hold of the cars.'
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