Volvo introduced its second generation side airbag which increased in volume to offer better protection.

[21] WHIPS, Volvo's system to minimize whiplash injuries, was also introduced as part of the standard equipment.

The 10V engine variants were dropped and replaced by detuned 20V versions, drive-by-wire throttle was now also introduced for non turbo models.

Specialised versions for the fleet market, such as a taxi and police variant, were now available from the factory.

[27] It used the same setup as the V70 AWD, with the exception of the rear self-leveling suspension being an option rather than a standard feature.

The engine was rated at 250 metric horsepower (184 kW; 247 hp) and 350 newton-metres (258 lbf⋅ft) for models fitted with a five-speed manual gearbox and limited slip differential.

Models fitted with a four-speed automatic gearbox were rated at 240 metric horsepower (177 kW; 237 hp) and 330 N⋅m (240 lb⋅ft).

Further styling touches were a special front bumper, blue gauge faces for the instrument cluster, the option to have the car in a R specific colour and a choice of unique 16" or 17" alloy wheels.