Volvo has announced that its 2004 global sales rose by 10% on 2003, a new record level of 456,224 cars sold.

The UK was Volvo’s third largest market last year with 40,159 sales. Registrations increased by 2.4%.

In its second full year in production, the XC90 became Volvo's best-selling model globally, as well as in the UK. A total of over 84,000 XC90s were sold in 2004, with 7,178 (or 8.5%) of these registered to UK customers.

Volvo introduced two new four-cylinder diesel engines last year from the joint development with Ford/PSA - the 1.6-litre and 2.0-litre diesel available in the S40 saloon and V50 Sportswagon – and now just over 50% of Volvos sold in Europe and nearly 60% sold in the UK last year had a diesel engine.

Volvo's engine factory in Skövde, Sweden will start producing the 2.0-litre diesel in 2005, while production of Volvo's six-cylinder petrol engine will be transferred to Ford's Bridgend factory in Britain.