I'm only speculating, but.. I'd say Volvo figured they didn't need to switch. The generator provided enough power to keep up with all electrical systems adequately. And that Bosch unit is pretty solid and reliable.

In '69, Volvo had their eye on D-jet, introduced in 1970 on the 1800E. I expect step one was more power, so engineering got that part sorted out first. And since they had it ready in '69, why not go with it.. Since they really didn't change much in cars from year to year, every little bit added a new selling point.

Again, speculation...
--
-Matt I ♥ my ♂

In 1955 an alternator was just a gleam in the engineers eyes. GM cars were using a combo generator/power steering pump--with the generator at the front section. It was Chrysler that came out with the alternator first. I don't recall if it was 1959 or 1960--or thereabouts. The others followed suit soon after--about 1963. European manufacturers hopped on the wagon a little later. I apprenticed at a Mercedes Benz-Rolls Royce-Bentley-Volvo dealer in 1969 and spent many hours rebuilding generators.
Alternators will charge more and faster than a generator--especially so at idle speed. With modern cars having more and more electrical equipment--power locks, seats, A/C, windshield wipers, etc. the alternator and 12v batteries was the answer. Other BBers with a more technical bent can probably explain just why. -- Dave

It's a good question. The power produced in a generator is passed by the brushes into the circuit. It also makes DC voltage, which needs no rectification. However the output is somewhat related to rpm, and as the rated output increases, say above 50 amps, brush wear becomes a problem. In an alternating current generator, or alternator, the rotor provides the magnetic field, and the stator windings produce the current, which means the brushes last far longer. However the stator produces alternating current, which must be rectified to be suitable for the battery. Until an inexpensive and reliable means of rectification was developed, alternators were a dream. Along comes the diode semi-conductor, and alternators appeared.
At idle an alternator can produce far more current - needed for all the electrical accessories of the huge cars of the late fifties. They can be spun faster as well - check out the sheave difference between most gens and alts. Europeans made do with far fewer accessories, so they stuck with generators for a while longer.
I believe Delco Remy made one of the first alternators, and arguably one of the best. Lucas made one of the worst - late model MGB's made more noise from the alternator cooling fan that the engine it seemed!