Introduced in early 1984 (in the U.S. and Australia for the 1985 model year), the 740 arrived nearly two years after the luxurious 760. It was the lower-end version of the original 760, intended to be a mid-size car that offered more style, performance, and luxury than the 200 series. The ‘4’ in the middle of the Volvo model name had once signified a four-cylinder engine, but by the time of the introduction of the 740 it simply meant less luxurious equipment as four- and six-cylinder engines were fitted across both ranges.
The 740 was available as a four-door sedan (sometimes referred to as the 744) and a five-door station wagon (also known as the 745). The station wagon premiered simultaneously at the 1985 Toronto and Chicago auto shows in early February 1985. The wagon was aimed squarely at the North American markets and only went on sale in Europe several months later, in the fall of 1985.
The Volvo 740 was a popular choice as a police car in several parts of Europe, especially so with the police in Scandinavian countries. For 1985, an intercooled version of the 2-litre turbo engine (B200ET) was introduced for markets such as Italy, where larger engines were heavily taxed. This unit produces 160 PS (118 kW) at 5500 rpm, ten horsepower more than the preceding non-intercooled B19ET variant, enough for a claimed 200 km/h (124 mph) top speed.
Model year 1986 marked the worldwide introduction of the station wagon; other differences were limited to a new font for the “740” badging and new hubcap designs. First shown at the 1988 Geneva Motor Show with tentative specifications but only going on sale with the introduction of the 1989 model year cars, a 16-valve version of the larger B230 engine was introduced (B234). This model has nearly as much peak power as the turbo version and was Volvo’s first multi-valve engine.