Volvo Aims to Add Performance Oomph with Polestar Acquisition

Volvo Car Corp. has acquired tuning specialist Polestar Performance AB to help it compete better against Mercedes-Benz AMG and BMW M performance models. Financial terms weren't disclosed.

The deal doesn't include the Polestar racing team, which is being renamed but will continue to race Volvo cars. The team will be run by Christian Dahl, the former owner of Polestar Performance.

The two Swedish companies have worked together for nearly 20 years. In addition to racing, Polestar more recently has produced limited-edition, high-performance variants of Volvo cars.

Volvo currently offers Polestar-tuned versions of its S60 sedan and V60 wagon. Combined global sales mainly in the U.S., U.K. and Australia of the two models is expected to be 750 units this year. Volvo hopes to double this volume in coming years as it adds more such models and integrates Polestar into its own operations.

Polestar uses performance-enhancing software and makes changes to a vehicle's transmission and throttle response to boost mid-range engine output. The Polestar S60, for example, races from zero to 62 mph in 4.9 seconds one second faster than the standard S60.

Future Polestar models will incorporate Volvo's twin-engine electrification technology that teams a turbocharger, supercharger and electric motor with a 2.0-liter engine. Volvo also hopes to increase aftermarket sales of Polestar performance kits.