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Let's not get too too excited eh? :)
They are indeed cutting the V70 in NA, but it will most definitely carry on in other markets, so they can decide to bring it back if they need to. Also according to the article you linked to the V70 has been outsold by the XC70 every year since 2001, and last month sold only 93 to XC70's 1900-some. The XC70 is just too popular.
Also, it seems they will introduce a less expensive FWD XC70. Currently the XC70 is a suspension/trim package on the V70 anyway. I will most definitely miss the V70 trims, but an options-trimmed FWD XC70 will fill that spot in the market well anyway. That said I don't think they'll sell too many of them. The AWD is a pretty big selling feature of the XC70 and also there's the V60.
The V60 will be released later this year, and makes a better match for that segment of the market. The V70/XC70 is really an x80 now anyway (built on the same platform the S80 and XC90 are built on, as opposed to the 'old days' when it was built on the S60 platform). Now that there will be a true S60 platform mate I think it will fit the bill much more appropriately. Obviously, there will be no need for the current V50 with the incoming V60 taking its place.
There has also been some talk about a 'crossover' version of the C30 (XC30?) which I think would be cool. I think that platform has needed an AWD option all along.
It also seems that they'd like to get their model numbers lined up better as well. I think in a few years you'll see all the 'numbers' at the end of the model names will be the same if they're on the same platform, rather than the 30, 40, 50, 60, 70, 80, 90 thing they have going now.
I think the changes to the S40 line (no AWD, one engine, no manual) will kill it. That might not be so terrible if the C30 lineup picks up the slack in terms of options, etc. A 5-door is a better small-car platform anyway IMHO.
Personally, I'm happy to see the V8 go. The T6 has just as much power/torque and is way better on fuel. I know we're all hard on the T6 here on this board, but I have to think it's better now than it was when it was first put into the S80 and baked itself to early deaths.
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1998 V70 AWD->FWD Turbo 200k+
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