The term would refer to a Volvo that is just the opposite, making you Laugh Out Loud. A Volvo is a car most people would expect to be boring, slow, and uneventful; whereas a Lolvo is a Volvo that is classified as a "sleeper" - One that one would never expect to be fast in any sort of way. A Lolvo is a Volvo that is exciting, tuned, fast, and all-around interesting.
*Volvo speeds off quicker than a Corvette*
Guy 2: "That's no Volvo, that's a Lolvo! Haha!"