Vulnerable Volvo: 2010 XC60

May 5, 2009, 7:34 PM UTC
Fortune

2010_volvo_xc60Volvo is at a very delicate time in its 82-year history. Its president and CEO resigned nine months ago after a failed product offensive; its sales in the U.S. – its most important market – are down 46.4% this year; and Ford, which bought Volvo in 1999, has put it up for sale.

Now comes the XC60, Volvo’s entry in the hotly-contested mid-size premium utility segment. By itself, it won’t be enough to turn the tide (it is a low-volume vehicle) but Volvo could use any kind of hit right now.

Sad to say, it probably won’t find one in the XC60, a vehicle that does most things well, but isn’t really outstanding in any of them. Given the current condition of the Volvo brand, it will have a hard time going head-to-head with the BMW X3, Acura RDX, and Mercedes GLK. And when you stack it up against the Toyota RAV4, prestige aside, the XC60 finishes a distant second

First the good news. From both the front and the rear, this is the best looking Volvo I’ve seen in a long time; the long, vertical taillights are especially well-executed. The interior is handsome and functional, and the controls are easy to operate. Underway, the SC60 moves smartly and quietly ahead as directed, and the ride is well-enough controlled to handle the spring-thaw potholes of northwestern Connecticut.

Here’s the less-good news. The SC60 and the RAV4 are almost identical in size, but the Toyota has six more cubic feet of storage space. The RAV4 with a V-6 has a much larger engine (3.5 liters vs 3.0 liters in the turbocharged Volvo), yet it weighs 600 pounds less and gets much better fuel economy: 19 mpg city/27 highway vs. 16 mpg city/22 highway for the Volvo.

To be sure, the XC60 has some features the RAV4 doesn’t, and it feels like a more expensive vehicle. But with a base price of $37,200 (my tester was $42,500), it was nearly $11,000 more than the Toyota).

That kind of price comparison isn’t going to make Volvo’s recovery any easier. And it may prove to be a significant obstacle as the company tries to find a buyer.