Volvo has announced a five-year model development programme which will cover the replacement of the whole range.

The Ford Premier Automotive Group manufacturer plans to raise sales from 430,000 units a year to 600,000 by 2006. Volvo is breaking free from its Swedish roots by opening a strategic design centre in Barcelona.

Hans-Olov Olsson, Volvo Car Corporation president and chief executive, told an industry conference in Prague: “You might ask yourselves why a truly Scandinavian company goes to the intense heat of southern Europe to find new inspiration.

“Volvo cars are owned and driven by people from all over the world and we need the international influence to be a successful premium brand.”

Mr Olsson said the centre's studio was probably the first to be completely digitalised for design work.

Five new Volvo models will be developed by 2006. They are likely to include a sports utility vehicle and incorporate new safety ideas tested on a concept model at January's Detroit motor show.

Mr Olsson said at the conference: “You will see two, three or more PAG brands being sold at the same dealership. Each brand will be cherished with individuality.”