The Volvo V40

New contender in crowded market for Golf-sized premium cars scores first with pedestrian airbag

Engine: 1.6-litre four-cylinder turbo-diesel
Transmission: six-speed manual
Power: 115 hp at 3,600 rpm
Torque: 270 Nm at between 1,750 and 2,500 rpm
Fuel consumption (combined cycle): 78.5 mpg (for 205 tyres - higher values apply where 225 tyres are fitted)
CO2 emissions: 94 g/km*
Top speed: 118 mph
Acceleration (0-62 mph): 12.3 seconds
Price: from £19,745

With the V40, Volvo enters the fiercely-contested market for Golf-sized premium cars, taking on the Alfa Romeo Giulietta, the new third-generation Audi A3, the BMW 1-Series and soon to be reborn Mercedes A-Class. Even in the face of such competition, though, the V40 looks set to do well. First, with the new car, Volvo is replacing the S40 saloon and V50 estate with a five-door hatchback, and the switch to a more popular, practical body style alone should persuade more UK car buyers to put Volvo on their shopping lists. But the V40 has more than that going for it, because it's actually a pretty good car as well; it's broadly competitive with the established models in this bracket but edges usefully ahead in areas such as safety and economy as well.

The V40 gets off to a good start before you even drive it because it's one of the more attractive cars of this size to look at. It's difficult to design a really distinctive five-door Golf-sized hatchback but Volvo succeeds with a car that uses the company's trademark strong shoulder line to give it a certain amount of character. A noticable “kick” in the shoulder line pays tribute to one of Volvo's most famous old cars, the P1800 coupé, but the rest of the design is smooth, modern and flowing. The interior is pretty much as you would expect – sensible and logical with a few typical Volvo touches such as the thin “floating” centre console and a new frameless rear-view mirror that suddenly makes the mirrors fitted to all other cars look clumsy and old-fashioned. It's a small point, but a pleasing one.

The initial V40 line-up ranges in price from £19,745 to £26,795. There are three trim levels, which carry the familiar Volvo designations ES, SE and SE Lux, which can be mixed and matched with five different engines, three diesel and two petrol, although not all trim/engine permutations are available.

Equipment levels are generous, with even the ES getting nice touches such as Bluetooth, leather trim for the steering wheel, gear knob and handbrake grip, a five-inch dash screen, and a cooled glove box. The SE adds features such as cruise control and keyless start, while the SE Lux has leather upholstery, LED day running lights and active bending Xenon headlights. Larger 17-inch alloy wheels are fitted – the ES and SE have 16-inch wheels. As far as possible, options will be grouped into packs, an approach which Volvo says means that the extra money customers spend on additional equipment is more likely to be reflected in residual values. Nav models will have a navigation system combined with several minor options, and there is likely to be a Business pack designed to appeal to company car users as well. All models have Volvo's City Safety technology which brakes the car automatically in response to hazards that catch a driver unawares at speeds of up to 31 mph (compared with 19mph for previous implementations of the system). And the company adds another entry to its long list of safety firsts – a pedestrian airbag that inflates from the trailing edge of the bonnet to protect anyone unlucky enough to be struck by a V40 from the hard surfaces at the base of the windscreen and along the A-pillars.

The engine range consists of four-cylinder petrol and diesel engines sourced via Volvo's former owner Ford, and the company's own five-cylinder diesel engines. The three diesels are badged D2, D3 and D4. The D2 is a 1.6 which turns out 115 horsepower, while the D3 and D4 are two-litre fives which produce 150 and 177 horsepower respectively. The two petrols are turbocharged 1.6s providing 150 (T3) and 180 (T4) horsepower, and parallel Ford's EcoBoost engine options. A more powerful petrol, badged T6, will join the range later.

I drove a D2 with a manual gearbox, and T4 and D4 automatics. The D2 is expected to be the most popular engine choice, thanks to its fiscally friendly 94g/km CO2 emissions (99g/km if wider 225 tyres are fitted in place of 205s) and impressive 78.5mpg combined cycle fuel consumption figure (74.3 on 225s), numbers that for the time being are better than those of any of the competitors. The D2's Focus-derived chassis, another carry-over from Volvo's period in Ford ownership, benefits from a little bit of judicious cross-breeding with slightly beefier elements of the larger S60's set-up, and handles very fluently. Our D2 had the “dynamic” suspension, the more comfort-biased of the two options available, and rode extremely well. The V40 follows hot on the heels of the new Audi A3 which also has conspicuously good ride comfort on standard suspension, suggesting that the big manufacturers are finally getting around to fixing the one significant area where cars could be argued to have got worse in recent years as a by-product of the rush towards ever larger wheels and tyres. The D2's engine is smooth and pleasing; it's already a known quantity from service in several Ford, Peugeot, Citroen models, as well larger Volvos, and doesn't disappoint on the fundamentals here. Thanks to the D2's economy-oriented long gearing, it doesn't pull very hard at the bottom end, although that's a characteristic that may have been exaggerated by the mountainous Italian test route on which I drove the car, and it remains refined and tractable at all times.

It's only out on the road that another interesting feature of the V40's design really comes into play – its LCD screen-based instrument panel. These are still comparatively rare; they were pioneered by Jaguar and Land Rover, who use them rather conservatively to display conventional instrument dials that you might easily mistake for the real thing. Volvo, though, has exercised a bit more imagination and used the flexibility offered by the technology to come up with three quite different instrument layouts which you can choose between for normal, sporty or economical driving. I'm not sure drivers will really bother in the long run to switch regularly between the various settings, but the layout and clarity of the displays is excellent, and serve as a reminder of Volvo's long record of excellence in ergonomics. Another traditional area of strength for Volvo is seating design, and the V40 does well here, too.

The two more powerful cars I tried, the T4 and the D4, were automatics. Both offered rather more go, but also served to highlight an underlying sweetness and balance in the more basic D2 that make it a slightly nicer car overall. The T4 provided strong performance but felt as though its character would suit a manual better, while the D4, with its powerful five-cylinder in-house Volvo diesel engine emitting an expensive-sounding burble, gives the V40 something of a “big car” luxury feel but feels a bit heavier at the front end. One option, the D3, a less powerful version of the Volvo five-cylinder diesel, wasn't available for testing but would probably be worth a look as it is often felt to be the pick of the engine choices on the larger S60 and V60 because of smoothness and free-revving character. The T4 I tested was running on the slightly lowered and stiffened sports suspension; this didn't ride as well as the D2 on the standard set-up but it was unclear to what extent this was attributable to differences in wheels and tyres as opposed to the sports suspension settings themselves.

At the moment, cars with premium badges account for only 13 per cent of the C segment (broadly speaking, cars the size of the VW Golf). Judging by the flow of well-developed new products such as the V40, the big manufacturers clearly think that percentage will increase. The other 87 per cent of C segment sales aren't just there for the taking, though; this size bracket also contains some of the best cars produced by the mainstream brands, including the Golf and the Octavia, which share much of their technology with the A3, and the V40's sister, the Ford Focus. I think that Volvo can easily convince buyers that the impressive and desirable V40 is worth considering against a similarly-priced or more expensive A3, 1-Series or A-Class. But selling bigger numbers of any of these models against great cars without premium badges that are often 20 per cent cheaper may be a bit harder.

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