INFORMATION PRODUCT NEWS

SERIAL PN (CC) 7/13

DATE September 12 , 201 3

AUDIENCE CORPORATE CUSTOMERS

KEY MESSAGE 1. INTRODUCTION AND OVERVIEW 2. DRIVE-E POWERTRAIN LAUNCH 3. MY14.5 PRICE AND SPECIFICATION CHANGES 4. SENSUS CONNECT AUDIO SYSTEMS 5. VOLVO CONCEPT COUPE 6. DAB RADIO ACCESSORY 7. PHEV HOME CHARGE SOLUTIONS 8. DOWNLOADS

ISSUE/CHANGE 1. INTRODUCTION AND OVERVIEW • The purpose of this Product News is to provide an overview of the following product actions; - Introduction of new range of Volvo powertrains - Advance notice of price changes effective September 30 - Miscellaneous product updates including new audio systems

2. DRIVE-E POWERTRAIN LAUNCH • Volvo Car Group has formally launched a new range of powertrains at the Frankfurt Motor Show. Over the next few years, all current engine and gearbox combinations will be replaced by new VEA (Volvo Environmental Architecture) technology that will be marketed as Drive-E. • As well as the generic VEA description, you may also see references to VEP (petrol) and VED (diesel) powertrains. • Initially launched in D4 FWD and T6 FWD configurations, these new two-litre, four-cylinder engines (and new 8-speed automatic transmission) will eventually cover all power ranges from an entry-level 120hp diesel through to top-end petrol hybrids with over 350hp. • The new D4 181hp Drive-E powertrain is initially available in S60, V60, XC60, S80, V70 and XC70 models, replacing the current D4 163hp variant. • The T6 FWD 306hp powertrain is initially available in S60 and V60 models, replacing the current T6 AWD 304hp variant. • In addition to a wide range of power outputs, this powertrain has been designed to be extremely efficient with outstandingly low levels of CO 2 combined with low fuel consumption. For example, the S60 D4 181hp has a class-leading CO 2 figure of just 99g/km. • The table below compares the current and new D4 powertrains;

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• These figures are easily class-leading, bettering even the Volvo D2 115hp in S60, V60, S80 and V70 models despite the significant power difference. • The table below also provides a comparison to the closest equivalent BMW;

• As can be seen, the Volvo Drive-E powertrains significantly outperform BMW’s Efficient Dynamics offer - both in manual and automatic versions. • In addition to new D4 and T6 FWD engines, the current D4 AWD powertrain is upgraded to 181hp (although this retains the current 5 cylinder layout) and despite the increase in power, there is no adverse impact on CO 2. • It will take a couple of years to launch Drive-E powertrains in all power positions across all carlines. The next phase will be to introduce Drive-E powertrains in the Volvo V40 during 2014. • Preliminary technical data for planning purposes is attached to this PN and full homologated data will be released within the next few weeks. • For clarity, all product changes announced in conjunction with Sep 30 price changes will be referred to as MY14.5.

3. MY14.5 PRICE AND SPECIFICATION CHANGES • Effective on all orders placed from Monday September 30, the following price changes will take effect. Note that trim level and powertrain price changes must be combined to establish the full pricing effect for each variant. • Full vehicle pricing is included as a download with this Product News. Volvo V40/V40 Cross Country • Vehicle - D2 +£250 - D3 +£350 - D4 +£150 - T2 – no price change - T3/T4/T5 +£65 • Option - No price changes - New Comfort Pack option introduced at £250 for ES/R-Design variants. Includes driver and passenger lumbar support, driver seat tilt adjust, passenger seat height adjust and forward folding passenger seat. - Driver Support Pack now available to order on all D2 variants. - New, optional 19” Artio alloy wheel available to order on T5 R-Design Lux variants. CO 2 for V40 T5 variant increases slightly to 189g/km. /V60 • Vehicle - All D4 +£250 - Business Edition +£300 (therefore, D4 Bus. Ed. +£550) - SE/SE Lux – no change (except D4 models)

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- All R-Design/R-Design Lux +£250 (therefore D4 R-Design +£500) - T6 304hp AWD discontinued - T6 306hp FWD introduced – see attached guide for pricing information • Option - 8-speed £1,550 (std. T6 FWD, option D4 FWD) - Sensus Connect with High Performance Sound £500 - Sensus Connect with Premium Sound £900 - Speed Sensitive Steering is standard on S60/V60 Drive-E powertrains - Adjustable Steering Force available as an option for £100 on Drive-E - Park Assist Pilot is available as an option for £850 on Drive-E - Lane Keeping Aid replaces Lane Departure Warning on Drive-E Volvo V60 PHEV • Vehicle - No price change - Sensus Connect with High Performance Sound replaces High Performance Multimedia System - Sensus Navigation replaces Integrated Satellite Navigation System. • Option - Sensus Connect with Premium Sound £400 - 18” Titanium Alloy available for £700 Volvo XC60 • Vehicle - D4 FWD +£500 (note £125 vehicle tax reduction due to lower CO 2) - D4 AWD +£250 - D5 AWD – no price change - T6 AWD – no price change - All SE Lux/R-Design Lux +£150 - D5 SE non-Nav variant to be deleted • Option - 8-speed Geartronic £1,550 (D4 FWD only) - Sensus Connect with High Performance Sound £500 - Sensus Connect with Premium Sound £900 - Speed Sensitive Steering option available, all powertrains, for £100 /V70/XC70 • Vehicle - Business Edition +£300 - All D4 FWD/AWD +£250 (therefore D4 Bus. Ed. +£550) - D2/D3/D5/D5/T6 AWD – no price change (except Bus. Ed. trim level) - Non-Nav variants to be removed from offer for following reasons;  All key competitors in DE segment provide Navigation as standard equipment  85%+ current sales S80/V70/XC70 are Nav variants  Simplification of offer  Proactive future residual value action • Option - 8-speed Geartronic £1,550 (D4 FWD only) - Tinted Windows option on S80/V70 to be increased to £380 to match XC70 pricing - Inscription Ventilated Soft Leather Upholstery introduced on S80/V70 - Inscription Leather Instrument Panel introduced as option on XC70 - Security Pack on XC70 increased to £750 to match S80/V70 pricing Volvo XC90 • Vehicle - All models +£250 • Option

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- No price changes Miscellaneous • Price lists will be updated and issued as soon as homologation data is released – expected by end of September. • The Volvo website and car configurator is planned to be updated on Monday September 30 with all new information. • It will be possible to place orders for the new D4 and T6 powertrains by the end of next week. • Data-providers have been advised of new powertrain detail but it may take a few weeks for this information to be uploaded to systems.

4. SENSUS CONNECT AUDIO SYSTEMS • From December production onwards, for S60, V60 and XC60 models, the High Performance Multimedia and Premium Sound Multimedia Audio Systems will be deleted. • In their place will be Sensus Connect with High Performance and Sensus Connect with Premium Sound. These new audio systems provide new connectivity options to the consumer, enabling access to a range of web apps. including music streaming services and selected browser functions as well as a refreshed HMI control system. • The Integrated Satellite Navigation System is also replaced on these models with Sensus Navigation. • The High Performance Sound Audio System remains as standard, but Nav variants for S60, V60 and XC60 will benefit from Sensus Connect with High Performance and Sensus Navigation. • Further information will be published shortly, but for information, this is how the options will be portrayed in the vehicle price list (in this case, XC60);

5. VOLVO CONCEPT COUPE • The first of a series of three concept cars was revealed to the public in Frankfurt this week. Created to demonstrate the design possibilities available with the new SPA (Scalable Product Architecture), the Concept Coupe provides a clear indication of Volvo’s future design language. • There are no plans at present to produce the Volvo Concept Coupe. • The next two concept cars will be released during the next 12 months, culminating in the launch of the all-new Volvo XC90 in late 2014, with first customer deliveries scheduled for Q1, 2015.

6. DAB RADIO ACCESSORY • With the exception of the Volvo XC90, all Volvo models are now fitted with DAB radio. The switchover date from analogue has yet to be announced but is

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likely to be sometime in 2015. This means that any vehicle scheduled for de- fleet in the next couple of years without DAB will need to be upgraded, or there is a risk that residual values may be affected. • However, Volvo has a solution for this! Available now for just £295 fully-fitted, your Volvo dealer can provide you with a Pure Highway 300Di DAB radio, thus future-proofing your existing fleet. • Please contact your local Volvo dealer for more information.

7. VOLVO V60 PHEV HOME CHARGE SOLUTIONS • In March this year, changes were announced by the government relating to domestic charge points for electric vehicles. In summary, up to 75% funding became available, drastically reducing the cost to customers of a dedicated home charge solution. • This environment continues to evolve with suppliers introducing new offers for customers. We are therefore delighted to announce that our partner, British Gas, has just announced a 100% subsidised offer for customers. • This means that all Volvo V60 PHEV customers will be able to have a dedicated 16A home charge solution, with tethered cable, fitted at no cost. • Effective immediately, customers should be directed to the British Gas website where they need to register their interest; http://www.britishgas.co.uk/electricvehicles • The following screen shots are taken from the website and provide more information relating to the offer.

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• Please ensure that your current and prospective Volvo V60 PHEV customers are made aware of this fantastic opportunity now. • Note also that there is no requirement to own an electric vehicle to take advantage of this offer. This means that customers waiting to take delivery of their V60 PHEV can register and arrange installation now. - friends and family may also take advantage of the offer, thus building up a personal network of charging points

8. DOWNLOADS • The following information is available to download with this Product News; - Press releases covering VEA / Drive-E / Concept Coupe launch at Frankfurt Motor Show - Vehicle pricing sheets for all carlines indicating Sep 30 pricing (to be read in conjunction with item 3). - Preliminary technical information for carlines with new D4 and T6 powertrains. - Price List Amend log with all known corrections to be introduced with Edition 1 MY14.5 price lists (to be read in conjunction with item 3).

ATTACHMENT PN (CC) 7/13 download.zip LINKS

CONTACT: Please contact your supplying Volvo dealer or Volvo account manager if you require further information.

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