Based on the 264 six-cylinder saloon, the 262C was designed in-house by Volvo's Jan Wilsgaard, and built mainly by Bertone in Turin, Italy.

The chopping had the effect of cramping interior space, and the wide C-pillars made for small-sized rear side windows.

Aimed mainly at the United States market, the 262C was Volvo's first entry into the luxury car segment.

[7] One automobile journalist described the 262C as "the strangely proportioned two-door looks like a chopped diesel locomotive" that "evades the classic ideals of beauty, regardless of the stylistic authorship.

"[3] For the 1979 model year, the rear-end design was modified with a deeper trunk lid and wrap-around taillights.

[2] The 1980 model year featured an engine displacement increase from 2,664 to 2,849 cc (162.6 to 173.9 cu in) as a result of the bore going from 88 to 91 mm (3.46 to 3.58 in).