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VOLVO PLATFORM AND PRICING STRATEGY FOR 1998 $$$$

ROCKLEIGH, NJ -- Volvo car sales during calendar year 1996 showed strong increases in both the 850 and 960 product lines. The 0.6% increase, while mathematically small, was anything but insignificant, as it was achieved with one less model being sold (this was the first model year that the 940 series was no longer sold in North America). The 850 series turned in a 15.3% increase over 1995, while sales of the 960 series were 39.3% higher than in 1995. Once again, the Volvo 850 was the U.S.'s best selling import car in the over $25,000 dollar class.

Badging
Sales expectations are high for 1997 as Volvo introduces its new models under new names. The 1998 S70 and V70 represent a major evolution of Volvo's award winning 850 series. The 960 series, now sold as the S90 and V90, will also conform to Volvo's new naming system, but remain largely unchanged except for new interior elements.

Volvo's new nomenclature is based on platform designations that denote both the type of model and its series linage. The letter "S" signifies the model is a sedan, while "V " representing versatility, indicates the vehicle is a wagon. ("C" denotes both coupe and convertible.) The number following the letter provides a sense of the platform size. For example, the S90 is larger than the S70, which is in turn larger than the 540, Volvo's small platform offering which is not available in North America.

Pricing
The prices of the S70 and V70 Sportswagon have been increased over the 850 series on a sales-weighted average of 1.4%, while the S90 and V90 pricing is unchanged from the announced pricing at the time of their August 1996 introduction. Overall, the combined upgrade pricing reflect an overall sales-weighted increase of an average of 1.1 %.

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