Auto Motor Sport Sweden have revealed that the next generation Volvo XC90 has been canceled despite launch plans in end of 2009. Sources close to AMS Sweden state the decision was made just a few days ago and supplier companies have not been informed yet.

This bold decision was influenced by several factors. The increased costs associated with the need to save weight and therefore include expensive lightweight components, plus the absence of new engines, transmissions and no hybrid technology – not even start/stop engine function, make it a hard sell. Additionally, as an indicator for market conditions in the U.S., the biggest market for large SUV's, Ford sees BMW X5 sales dropping. As a result, Ford have determined that in order to stay competitive, any new models must offer lower fuel consumption and a hybrid model.

With it's demise written on the wall, the XC90 will have another big facelift in 2009 and continue until 2012 with still, no major changes or new engines. Instead Volvo will concentrate on the upcoming XC60, smaller XC50 and even smaller XC30. However, with the slim possibility that the XC90 gets pardoned from its death sentence, it will be built on a Ford Platform.

[UPDATE 12.18.2007] Volvo officials have replied to Auto Motor Sport Sweden with a brief statement that XC90 facelift is indeed in development, however, the next generation XC90 has not been canceled. Although it is still not clear, the new XC90 will undoubtedly be built using a Ford platform to take advantage of cost savings in an effort to remain competitive as stated above. Volvo stresses that Ford does not dictate which models Volvo will build. They are more autonomous than ever and freely proceed with planning of new models with independence. By making a fresh start with a new platform, Volvo will lose a couple of years, but the benefits of having a more competitive model is worth the investment, especially as such an important vehicle to Volvo as the XC90.