Volvo plans diesel and electric cars for U.S., will aim S60 at enthusiasts

Volvo will add diesel and electric cars to its U.S. product lineup as it tries to meet stricter U.S. fuel-mileage standards that will begin phasing in for the 2012 model year. But fun-to-drive performance will still have a niche at the carmaker whose identity is closely tied with safety.

Doug Speck, CEO of Volvo Cars of North America, confirmed the additions on Tuesday but declined to specify what cars would get the alternative powertrains or when they would arrive. The federal rules will raise average corporate fuel economy to 35.5 mpg in 2016. Speck said Volvo's plans to reach the mark also include refining conventional gasoline engines.

A V70 plug-in electric vehicle is due in Europe by 2012.

Meanwhile, the redesigned S60 will launch in the U.S. market next year with an eye toward mainstream sales. Featuring all-wheel-drive grip, the S60 also will offer a performance bent, and Speck left open the possibility of resurrecting some kind of R badge. Volvo killed the R in 2007, though it offers an R-Design appearance package on some models.

“We need people to say, ‘I actually enjoy driving a Volvo,'” Speck said.

The S60 will take aim at the BMW 3-series and the Infiniti G35, among other luxury sedans.

Meanwhile, uncertainly over the future of the Swedish brand has not hurt investment in future products from parent Ford Motor Co., Speck said, pointing to development of the V70 hybrid as evidence.

On Monday, a U.S. group known as the Crown Consortium led by former Ford and Chrysler executives emerged as a potential challenger to China's Geely Automotive to buy Volvo, according to published reports.

In other matters, Speck said the return of design chief Peter Horbury brings enthusiasm to the brand, and that many of Volvo's current cars have his “DNA” from an earlier stint of leading Volvo design.

By Greg Migliore