Prestige car maker Volvo Cars has today unveiled two new concept cars that marks the official launch of its global small car strategy and moves the Swedish brand in a new direction.

In line with Volvo's stated ambition to sell up to 1 million electrified cars by 2025, the new 40 series range includes an electric vehicle and a plug-in hybrid variant.

The 40 series cars will be the first built around Volvo's new Compact Modular Architecture (CMA), which has been specially created for smaller cars. They will also offer a full range of innovative connectivity services, plus the world's most advanced standard package of safety features and Scandinavian interior design.

"Our new expanded range of smaller cars will improve and broaden Volvo's presence in an important and growing market segment in Australia and around the world," said Kevin McCann, Managing Director of Volvo Car Australia.

"In 2015 when we launched the All-New XC90 SUV in Australia we revealed the versatility of the Scalable Product Architecture (SPA).

The new generation 40 series will benefit from those advanced technologies, and the result will be a very distinctive small car that will stand out from the crowd."

The small car range will include a pure battery electric vehicle as well as Twin Engine plug-in hybrid powertrain variants.

"By taking a modular approach to both vehicle architecture and powertrain development we have succeeded in leap-frogging many of the players in the prestige segment," said Mr McCann.

"Our new battery electric powertrain variant opens yet another exciting chapter in the unfolding Volvo story."

The first new 40 series car is planned to go into production in 2017, and is expected to be on sale in Australia in late 2017/early 2018.

The announcement of Volvo's new global small car strategy comes on the back of a strong increase in sales and profitability. In the first three months of 2016 revenues rose 24 per cent year-on-year to SEK41.7bn. Global sales for the first quarter of 2016 increased 11.9 per cent to 120, 591 cars. Volvo has a medium term ambition to sell 800,000 cars a year, up from 503,000 in 2015.

Note to Editors:

• The announcement that Volvo will also deliver a battery electric vehicle based on its CMA products follows a commitment to produce a pure electric car on its larger Scalable Product Architecture by 2019.
• Volvo's new T5 Twin Engine, based on the company's new 3-cylinder petrol engine and a new 7-speed dual clutch transmission coupled to an electric machine sees the Swedish company adjusting its existing Twin Engine All-Wheel Drive approach in favour of a more accessible front wheel-based system for its smaller cars.

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About Volvo Car Group

Volvo has been in operation since 1927. Today, Volvo Cars is one of the most well-known and respected car brands in the world with sales of 503,127 in 2015 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding (Geely Holding) of China since 2010. It formed part of the Swedish Volvo Group until 1999, when the company was bought by Ford Motor Company of the US. In 2010, Volvo Cars was acquired by Geely Holding.

As of December 2015, Volvo Cars had almost 29,000 employees worldwide. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for China is located in Shanghai. The company's main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).