The work to develop the Volvo 850 was led by Peter Augustsson, who later became head of SAAB Automobile. It was also the last Volvo model designed by Jan Wilsgaard.

In order to get sufficient engine power in the regular models, it was concluded that a cylinder volume of 2.5 liters would be necessary, which was a little on the high side for a four-cylinder engine. Therefore, Volvo developed a five-cylinder in-line engine for the 850, while a four-cylinder design was used in the 400 series. With the help of four-valve technology and turbos, it was then possible to offer more powerful engines as an option, although all engines were five-cylinder and built on the same basis.

Because the long engine took up so much of the engine bay's width, an extremely short gearbox had to be designed. It was fitted with double secondary axles, so that you got three gear pairs on each and still 5 gears + reverse. A corresponding short automatic gearbox was also produced. In 1995, the program was topped off by the 850 T-5R, popularly called T-Gul after the special yellow color. Volvo limits the edition to 2,537 yellow cars, but the demand is much greater and 2,516 black and 1,911 green cars are produced in addition to the yellow cars. Sweden is awarded a total of 321 cars of all colors. 
In 1996, the previous year's successful T-5R was followed up by the 850R, which was marketed in a flame red color, which immediately became known as T-Red. The car gets a whopping 250 hp/350 Nm and a further strengthening of the gearbox is introduced. The 850R has a diff brake with viscous coupling to better utilize engine power. 

We can now present a unique example of Volvo's 850R that has had one and the same owner since new. The car was sold new by Bra Bil in Upplands Väsby, right outside of Stockholm on the 2th of April 1996, to a company in Gothenburg. The car has been serviced continuously and is in a nice and honest condition. The car comes with a lot of documentation and books.