Volvo invests $10.5b in new platform, engines

Volvo has announced a $US11 billion ($A10.55b) investment in its new Scalable Product Architecture (SPA) and Volvo Engine Architecture (VEA), which will underpin most of its future models starting with a redesigned XC90 in late 2014.

The Swedish car-maker announced its new, flexible SPA platform and VEA powertrain strategies in September 2011, and the Volvo You concept was the first vehicle to emerge on the new chassis architecture, at last year’s Frankfurt motor show.

At the time, it said the new four-cylinder VEA petrol and diesel powertrain family would be up to 90kg lighter, 35 per cent more efficient and more powerful than the inline six-cylinder engines it will replace.

Volvo has also claimed its new front-wheel drive SPA platform family will underpin a variety of new models that would weigh between 100 and 150kg less than the models they replace.

Apart from the 2015 XC90, new models expected to be based on SPA and VEA technologies include redesigned C30 compact hatch and C70 convertible models in the next few years.

A new S80 flagship sedan that takes design cues from the Volvo You concept and forms the basis of a new XC70 crossover is due in 2015, and a redesigned S60 sedan that will also spawn a new-generation XC60 crossover is expected around 2016.

Volvo is also reportedly considering whether to offer a petrol-electric hybrid version of the existing XC60 or S60 in 2014, or to wait for new SPA-based models.

According to Automotive News, the Chinese-owned Swedish brand, which is controlled by Zhejiang Geely Holding Group, also wants to build cars in North America - possibly with a partner such as Fiat - and to share development costs on smaller cars.

Volvo said almost half of the multi-billion-dollar platform and engine investment, to be spent between 2011 and 2015, will be spent in the independent Scandinavian brand’s home country, marking one of Sweden's largest ever industrial investments.

“This is a proof of Volvo Car Group's determination to strengthen the company's position as a Swedish car-maker with a unique attractiveness on the global market,” said Volvo Car Group President and CEO, Håkan Samuelsson.

“SPA and VEA sharpen our cars' attractiveness in all areas - design, driving pleasure and quality down to the smallest detail. And of course we are at the same time boosting our core values of safety and environmental care.”

While the SPA chassis strategy will see a range of models, which share modules and scalable systems and components, produced in a flexible production system, the new four-cylinder VEA engine family will be built in Skövde, with assembly of all drivelines, including hybrids, will integrated at Volvo’s main Torslanda plant in Gothenburg.

Volvo says about a third of its investment in Sweden is earmarked for expansion and upgrades of its domestic production facilities, including the construction of a new bodyshop in Torslanda, to be completed in the second half of 2013.

The Olofström bodyshop will also require considerable modification for the new models based on the new architecture, while the Skövde engine plant will undergo “comprehensive changes” for production of the new four-cylinder engine family.

Volvo Car Senior Vice President Research and Development Peter Mertens said development of both the new vehicle architecture - which will replace the platform developed by the company’s previous owner, Ford - and engine family would take place in Volvo's development centre in Torslanda.

“SPA makes us technologically independent, without any link whatsoever to our previous owner. The new architecture covers about two-thirds of our total sales volume. With about 40 per cent of all components shared by all car models irrespective of size, we will benefit from economies of scale, thus boosting our competitiveness.

“With lower costs for development and parts designed to be shared by all our models, there will be more capacity left for focusing on individual details that are important to our customers.”

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