Vehicles like the Volvo S60R and V70R - the Scandinavian automakers top-shelf sports models - will be canned, reported the Automotive News. Speaking to the publication, the executive vice president of sales, Doug Speck, said: "There was a lot of passion from our owners. But the investment to make for that side of business, for the return we get, just wasn't good enough."

While Volvo was keen to have V8-powered performance models outputting more than 224kW of power (300hp), the cost of developing and marketing these vehicles in comparison to how many sold simply did not add up. And with parent company Ford tightening the purse strings such a move was an inevitability.

Volvo has said it will stop selling R-badged performance cars after the last 2007 models are sold. At the same time, Volvo will not be completely devoid of vehicles that can move briskly, and will still offer a range of turbocharged petrol and diesel engines, including the T5 turbo (most famous in Australia for its application in the Ford Focus XR5 Turbo)

The CEO of Volvo, Fredrik Arp, said that model like S80 - powered by a V8 engine - will fill the gap that the S60R left, and that the company was however working on a new line of performance models. But we won't see these until next decade.

In other Volvo news, the Swedish automaker has revealed the 2008 model S40 and V50. These 'volume sellers' which are based on the Ford Focus platform have been given a slight refresh for the 2008 model year, including a sleek new look for the S40 sedan and a slightly different front end for the V50 wagon.

Most of the changes to the new S40 and V50 models have taken place inside the cars, with a range of new storage options to better compete with the Japanese and European competition.

Volvo is moving its small models further upmarket as well, hoping to give its German rivals increased competition by adding features such as xenon headlamps with night time cornering/swivelling features. The brake lights have also been upgraded to flash during heavy or emergency braking, in order to warm those people following that the situation requires rapid action, and these new safety features will fit well with Volvo's brand of active and passive safety.

Fredrik Arp, Volvo's CEO, said that many of its buyers are taken by the prestige image of the new models, and that, "...the reasons for choosing the S40 are much more emotional than before. Today's buyers speak enthusiastically of its sporty design and driving pleasure. We're also increasingly winning the image and prestige match against our toughest competitors."

The car will be powered by a range of engines when it's released in Europe, including the 400Nm 5-cylinder 'D5' diesel engine, and also the E85-powered (85 percent ethanol, 15 percent petrol) Flexifuel variant, which produces 93kW (125hp) and according to Volvo is becoming increasingly competitive. For the record, the Volvo S40 and V50 Flexifuel models are sold in nine European countries and in 2007 they have accounted for 8 percent of these models' total sales.