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Is it a manual tranny? If it is then it could be the clutch. The clutch plate might simply be worn out. Unusual for a Volvo, but not unusual for most other cars. I remember replacing a clutch in my BMW at about 65k. You'd be lucky to make 65k in a VW.
I believe it is a hydraulically operated clutch (I have an automatic). If so, check the fluid level and bleed if necessary. If there is an adjustment try that too.
OTOH - If it is a slushbox follow the other posters instructions.
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Bessie - 95 855 GLT Sportwagon; 93 854 GLT; Inga - 90 244 DL 300k, gone but not forgotton
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