GENEVA - Volvo Car Corp. joined Europe's common-rail diesel battle with the debut of its D5 engine here.
Volvo invested $25 million to build a factory within a factory for diesels at its Skovde, Sweden, engine plant.
The diesel line employs 150. It has capacity for 50,000 diesel engines annually on one shift. That output covers the diesel requirements of Volvo only.
Volvo is willing to sell diesels to other brands in Ford's Premier Automotive Group, said Hans Gustavsson, Volvo product development chief.
Besides Volvo, the Premier Automotive Group includes Aston Martin, Jaguar, Land Rover and Lincoln.
'If someone else would like to have that engine, we would be delighted to have that discussion,' Gustavsson said.
Volvo could double capacity simply by adding a second shift.
Volvo is already studying the feasibility of building six- and eight-cylinder common-rail diesels to compete with rivals Audi, BMW and Mercedes-Benz.
'We are not covering the whole range, as our competitors do,' said Lars-Gustaf Hauptmann, project manager for the D5 engine. 'In the future, we are going to expand.'
A new market
Volvo officials did not say whether they would build those engines at Skovde or buy them from another source, such as Ford's diesel plant in Dagenham, England.
Volvo believes it is entering a new market with the D5 diesel. Company research shows 44 percent of the luxury segment in Europe is diesel. In some countries the percentage is much higher.
In Belgium, diesel demand in the premium segment is 87 percent, followed by France with 82 percent, Austria with 77 percent and Italy with 70 percent.
Volvo's D5 engine will debut this summer in the Volvo S60 and S80 sedans. It will be added later in the V70 wagon.
The D5 will replace a five-cylinder diesel Volvo has been buying from Volkswagen. At first, the D5 will be mated to a five-speed manual transmission.
The D5 will add automatic transmission and be installed in all-wheel-drive vehicles.
Volvo approved the D5 engine project in 1998. About 100 engineers are working on the project, said Ake Othzen, Volvo project manager for diesel engine development. Othzen said that the Volvo engine is light for a diesel. One reason is a cast aluminum block, fairly unusual in diesels.
The D5 exceeds Euro 3 emission standards and runs cleaner than any previous Volvo passenger-car diesel engine.
Hauptmann said Volvo believes it will have sufficient capacity to meet demand for diesels in Europe. Diesel engines account for 25 percent to 30 percent of Volvo's European sales. With the engine that should increase 35 percent to 40 percent he said.
'Supply of common-rail components is a bottleneck,' said Hauptmann. He said Volvo is working with Bosch to solve the problem.