A guess: They were early because they introduced the Low
Pressure Turbo at that time and wanted it in the next model
year. I guess the engineering was finished and since you can't
always finish engineering projects coincident with model years
they just come out with the next year as soon as it is legal.

I have also heard that in Europe they are not so big on model
years as we are and vary the vehicles on a more continous basis.
Could be Volvo did not think in terms of model year the same way
we do. The car was ready when it was ready and they rolled
the model year number forward for our market.

My 98 S70 T5 was built 1/97 (11 months before 98). It was sold
to me in April and is a 98 model year vehicle. So, they built
both 850s and 70 series for a while.