Around that same time the "N-project" starts, VOLVO's new generation of engines. The first engine to be produced is the B6304F, to be put in Volvo's 960 which is to be introduced in 1990.
While designing this engine the choise is made for an aluminum-alloy construction of the engine and the cylinderhead. Production location is  in Skövde (Sweden), where a totally new plant is founded. The production build-up is modular. This means that easily can be switched from 4 to 5 and even 6 cyliner engines. In this way Volvo can adapt their engines to all the various requests from the market. It is even possible to produce a 2000cc 4 and 5 banger simultaneously. 
The working facilities are far from the usual old fashioned flow produciton. It is possible to rotate the engine in all directions and of course all the hard- and software you can think of is available to ensure a constant and high production quality.
A remarkable fact is that the plant was not offically opened before 1991 when the Volvo 850 was introduced.

Because of the length of the 5 cylinder engine a problem raises to mount the existing gear-box. The transversely mounted 5 cylinder engine with  conventional gear-box is obviously too wide. Therefore and also because of the demand to create a Volvo worthy turning circle, a new, compact, gear-box is being developed. This new M56 is more compact than previous designs, shorter by virtue of doubling the number of intenal shafts. Volvo applies for a patent on this new transmission.
The rear suspension is a totally new design. The so-called Delta-link rear suspension has semi trailing arms, but with each linked to the other and to the chassis through directional bushings. The result has the compactness of a beam axle with a modicum of rear steer. Also on this rear axle patent has been succesfully applied for.
Safety,  has brought the next two patent applies for Volvo. The Side Impact Protection System is a construction from mr. Safety himself, Nils Bohlin. It is shown at the bottum picture on this page. This system already meets 1997 federal sideimpact standards, part of the trick being additional structure that dissipates lateral loads across the entire passenger compartment.
The ARH, automatic retractor Height-adjustmentis a quit innovative system for the front seatbelt. In lieu of a conventional D-ring, there's an extended slot on the B-pilar in which lurks a retraction reel that is wider than its corresponding belt. This gives the automatic height adjustment, for a safe and comfort fit of the seatbelt across the shoulder.