Volvo announced it will invest $132 million to develop a new 16-liter engine to be used in trucks, buses, construction equipment and marine and industrial uses.

This is the first step in the consolidation of Volvo's engine program following the acquisition of Renault VI/Mack, said the company.
"A new engine program accounts for a major share of the long-term synergies in the deal," the company said in a press release. "Development of engines is moving toward reduced emissions and higher demands on fuel economy. This places heavy demands on development resources, which in turn requires the largest production and purchasing volumes possible over which to distribute costs."
The Renault VI/Mack acquisition allowed the Sweden-based Volvo Group to double its total volume of diesel engines to about 200,000 units annually, making Volvo one of the world's largest manufacturer of heavy diesel engines.
"The acquisition of Renault VI and Mack provides us the necessary volume and base of expertise to develop a proprietary 16-liter diesel engine and manufacture it in-house," says Volvo CEO Leif Johansson. "With new technology, the new engine will meet all currently known emission legislation."
The new engine is being developed and will be manufactured by Volvo Powertrain, the unit within Volvo responsible for supplying diesel engines, gearboxes, rear axles and driveline systems to Volvo's business areas.
Volvo plants to use the 16-liter project as a model for an entirely new engine program to be developed within a four to five year period.