Volvo has been forced to postpone redesigning two of its vehicles due to a lack of funds and increasing focus on new technology and vehicle segments. Originally, Volvo's XC90 SUV was scheduled to be redesigned for 2010, but will now instead receive a facelift, with the redesign expected to be postponed by two or three years. Similarly, the S60 sedan will be redesigned in 2010, rather than early 2009 as originally planned.

The company has, however, hinted that it may be planning an all-new S40 sedan. Emerging markets such as Russia and China present a tempting target for luxury manufacturers such as Volvo, and there is also talk of an expanded small-car lineup at Volvo to capitalize on current downsizing trends, where the S40 would add another body style option.

Meanwhile, cash flow remains an issue at Volvo. Developing technology such as the 'City Safety' crash avoidance system has drained Volvo of the required funds to redesign the XC90 and S60, and the introduction of the new XC60 range has forced Volvo to postpone updates to other vehicles, reports Automotive News.

"It's all about priorities. To fit everything, you have 'X' money for development. That deteriorates when you have less revenue, and have to adapt where you spend money," said Lex Kerssemakers, Volvo's senior vice president of brand, business and product strategy.

Other new technology developed to adapt to changing emissions laws, such as the DRIVe low-emissions range that debuted at Paris, and a diesel hybrid expected to debut in 2012, has also forced Volvo to tighten its purse strings. Coupled with its $271 million loss for the first half of 2008, Volvo's lack of cash is causing its product cycles to be longer than most luxury car makers would allow, a situation Volvo is unhappy with but which it must endure.

While previously there was talk of Ford selling off Volvo, the Swedish auto manufacturer is insisting that they still "have full support from Ford" in regards to their major projects, and that the Blue Oval is not attempting to cut down Volvo's development budget.