Volvo is working on a new model that is said to be a big competition for the BMW 3-Series and Audi A4. The new model, S60, will be unveiled in 2009-2010, in the same time with another new model, the S40 hatchback.

The new S60 will be based on the same platform as the Ford Mondeo and the Volvo S80. Thew new S60 will be a completely new and redesigned model, replacing the current generation in late 2009.

The S40 will be replaced with a a five-door hatchback, making it a more conventional competitor for the Audi A3 and BMW 1-series. There are possibilities for the new model to be called V30.

The 2009 S60 will grow only a little in its external dimension. It will get a slightly longer wheelbase, but to take on the German pair the new S60 will also need sharp styling, excellent interior quality and much-improved ride and handling.

Engine line-up will include a 2.0-litre four-cylinder diesel (a big seller in this class), plus a more powerful 2.2-litre diesel. To battle BMW and Audi’s six-cylinder diesels, Volvo can also call on its D5 family of five-pot oil-burners.

Volvo S60 will get its design theme inspired by the XC60 soft-roader concept shown at the Detroit motor show in January 2007. The key elements are headlamps that follow a slanted line up the front wing, rather than Volvo’ s typical horizontal alignment, a new grille shape and exaggerated cooling vents in the bumper.