Finally, someone who's on the mark with this topic. The same inline 5 they've been using year in and year out has not been changed much (if any) internally so it is unlikely the S60R will push 350 HP. AWD and 300 HP sounds about right--besides 300 is a nice rounded number that is easily marketable! All this changes, of course, if Volvo decides to upgrade this good 'ol I-5 and beef it up so that it can handle 350 HP. But, even with the improvements, you're right in that there just isn't a whole lot of steam left in this engine--2.3 liters just isn't a lot of engine to work with.
PS: I checked and the US version of the S60 T5 still makes 247 HP and 243 pd./ft. of torque (the same as the last V70 T5 offered) so I don't know where 260 HP came from.
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