This week, let’s set the wayback machine for mid-1999 and Gothenburg, Sweden, for one more look behind the curtain during the development of the second-generation Volvo S40. As the sole North American member of the P1X project team, I represented the only major market with no experience in selling Volvo’s small cars.
As a product planning/marketing guy, that put me in the unique position of helping to develop a new car without any reliable previous reference point. That turned out to be a bit of a challenge.
Remember that in mid-1999, Volvo’s U.S. sedan lineup consisted of the S70 sedan (a heavily updated 850) which had been introduced for the ’98 model year, and the new S80 (which was largely designed at Volvo’s Camarillo, California Monitoring and Concept Center). The first-generation S40 was still a few months away from its U.S. introduction. It would finally come to the States in the fall of 1999 for the 2000 model year, about midway through its lifecycle and after a slight facelift. (The twin rationales for its late U.S. intro were 1) to keep the assembly lines in Born, Netherlands humming, as the 40-series had passed its peak European production volume by then, and 2) to provide the U.S. with a new entry-level Volvo to succeed the late, lamented 240-series at a roughly similar price point.)
This unassuming building in Camarillo, California has housed one of Volvo’s key R&D facilities since the mid-1980s. (Source: Google Earth)
Our competitive set for the first-gen S40 in the U.S. included the Honda Accord, Subaru Legacy, and Toyota Camry (because of their ubiquitous presence and heavy cross-shopping), and our fellow Europeans, the Audi A4, SAAB 9-3, and VW Jetta. The Acura Integra and BMW 3-Series typically weren’t cross-shopped by Volvo buyers (or vice-versa), but they were added as secondary competitors.
The BMW and SAAB were the outliers in this group. The 6-cylinder 3-Series was really an S70/S60 competitor, and the SAAB…well, it was Swedish, what can I say?
Readers of my earlier post will recall that during the development process, our target car for the new S40 was a mythical construct, the Audi Bora (Jetta in the U.S.). While the rationale for this was eventually understood and agreed to by our design and engineering colleagues, it caused some consternation at times, particularly involving powertrain discussions for the new car.
Instead of the sole powertrain to be offered on the U.S.-market S40 (a 160-HP turbocharged 1.9-liter four-cylinder derived from Volvo’s modular engine family) our successor sedan would arrive with a choice of naturally aspirated and turbocharged five-cylinder engines (as well as manual gearboxes; the first S40 was only offered with a five-speed automatic). A wider range of powertrains, it was thought, would allow the non-turbo models to be positioned as entry-level 240-series successors at an attractive price point, while the turbos would attract more well-heeled buyers as well as those looking for more performance. Also, for the first time, Volvo’s compact cars could be equipped with all wheel drive. In total, the planned program seemed to offer something for everyone.
That’s where the discussions became a bit more…intense. Our intended entry-level S40 was to have a 10-valve version of Volvo’s five-cylinder under the hood. Test driving the engine in an S70 proved the I5 10V to be quieter and smoother than the 20-valve iteration, as well as being significantly less expensive to produce. Penciled into the program with front wheel drive only, it would also offer the best fuel economy in our proposed lineup, if only by a couple of MPG. Its only drawbacks, on paper, were its 140-HP output and peak torque of 150 ft./lbs. at about 4,500 RPM.
One step up, we planned for the 20-valve version of the inline five. Well-proven in the Volvo 850, the 168-HP twenty-valve would offer competitive performance at a still-reasonable price point relative to the competition. It would be available in either FWD or AWD, as the latter was becoming part of the “cost of entry” in many U.S. regions which experienced snowy winter weather (or significant rainfall in other areas).
Finally, there would be the five-cylinder turbos. Their 218-HP output and abundant low-end torque made them the performance stars of the proposed lineup and real competitive alternatives to competitive V6s. In all, it was an ambitious program, but as is often the case, compromises had to be made.
When our rationale for this full program was presented to our VCNA colleagues, the reaction was, to put it mildly, mixed. While the marketing group enthusiastically nodded their heads, the folks responsible for distribution were adamant that our proposed lineup was far too complex, potentially creating allocation issues and dissatisfaction on the part of our dealer body. For them, simpler was better.
The 10-valve five-cylinder engine we never got. (Source: https;//mymotorlist.com)
In the end, the 10-valve engine was deleted, and the naturally-aspirated 20-valve became the new S40’s base powerplant. While its horsepower output was more competitive on paper, those who had experienced the sweet 10-valve were aware of the compromises. And of course, the standard-equipment 20-valve obliged us to move the new S40’s entry price beyond what was originally envisioned.
In retrospect, one could argue that we didn’t need six powertrain variants to sell 25-30,000 S40s annually in the U.S., but we could make convincing arguments to keep each one in the program.
U.S. sales volume ambitions for the new S40 were set at 28,000 units annually, actually a bit lower than the peak achieved by the previous generation’s 29,862 units in calendar year 2000. The new S40 never quite achieved that level of sales, peaking at just under 24,750 units in 2006. Would the result have been any different if we had kept the 10-valve engine- and its lower MSRP- in the program? I guess we’ll never know…
(Featured image of Gen 2 Volvo S40 from www.caranddriver.com)
Of that list of competitors in 2000 the S40 was clearly superior to all, perhaps equated with the BMW 323 and the Saab 9-3.
For me it is still the best of the premium brands.
It’s hard to understand why they didn’t opt for the 10-valve engine. A performance gap to the V70 Mk.1 would have been maintained and a more attractive entry price into “the world of Volvo” could have been achieved.
Are the sales numbers quoted at the end for the sedan versions only?
Should have kept making the 240 series!!!