The Volvo V40 is a car with a lot resting on its shoulders. First of all it has to replace both the old V40 and S40. That’s not such a big task as both of those cars were getting a bit long in the tooth but replacing a choice of saloon or estate with only a hatchback is a gamble.

The second thing it has to do is compete with a formidable pair of premium hatchbacks in the form of the Audi A3 and BMW 1 Series. That’s not an easy task – the Audi has the ‘posh hatchback’ thing all sewn up while the rear-wheel drive BMW has the lead in driving dynamics. Does the V40 stand a chance?

Volvo V40 D2

Volvo V40 D2

First impressions are good. From the outside the V40 looks like a scaled down version of the handsome V60 estate. Technically the V40 is a hatchback but its profile has more than a hint of estate about it, much the same as the A3 Sportback.

Another thing it has in common with the Audi A3 is a nicely appointed interior, although I find the Volvo’s cabin lighter and more inviting. The ‘floating’ centre console (you can slip your hand behind it to find a little shelf) is just as effective as in the rest of the Volvo range. The seats, another Volvo strong point, are comfortable and supportive in all the right places and the driving position is spot on.

Volvo V40 D2 Dashboard

Volvo’s cabin is comfortable and welcoming

One new feature not seen before in Volvo’s range is a delightful TFT crystal instrument display with three different modes to choose from. In ‘Normal’ mode you have a traditional speedo dial with temperature gauge and rev counter. ‘Eco’ mode switches to a green-tinted display and includes a guide that assesses how economically you’re driving, giving you a nudge in the right direction if you want to improve your MPG figures.

Sport mode turns the displays red, places a large rev counter in the center of the display and moves the speedo to an easy-to-read digital numeric. The final flourish is a nifty meter that shows how much power you’re calling on from the engine room. It’s a fun feature and looks very smart, with lovely graphical touches such as an illuminated edge around the virtual needles.

Volvo V40 LED Display

Beautifully animated TFT display brightens up dashboard display

The V40 comes with a choice of T3 (150bhp) or T4 (180bhp) petrol engines and three diesels – D2 (115bhp), D3 (150bhp) and D4 (177bhp), with a hot 254bhp five-cylinder T5 petrol on its way with to liven things up significantly.

I was able to try the D2 and D4 versions and was impressed by both, but for different reasons. The D2 is perfect for those who like to make steady but serene progress thanks to the smooth engine and hushed cabin. Combined with the Economy display you shouldn’t have too much trouble getting close to the official economy figure of 78mpg. With Stop/Start technology (standard across the range) the D2 is rated at just 94 g/km of CO2 and makes an ideal choice for company car drivers. It’s also an ideal companion if you have a dislike of fuel stations forecourts as the 52-litre tank gives it a range of almost 900 miles.

Volvo V40 D4

Volvo V40 D4

The D4 sacrifices some of those green credentials in the pursuit of more power. The 2.0-litre engine adds a fifth cylinder and with it a much more cultured tone that adds to the premium feel of the V40. It’s louder than the D2 but makes up for it with a sportier character. The 295lb/ft of torque gifts it with an amusing turn of pace and yet it can still (theoretically) return 65mpg. That is hugely impressive.

What both cars share is a surprisingly good balance between ride comfort and handling. The suspension is supple enough to stop imperfections in the road from disturbing the peace in the cabin, but ask the V40 to cut through a series of bends and it will do so with real vigour. This is helped by a steering setup that has good feel and is very responsive, and the light but positive action of the six-speed manual gearbox allows you to get the most out of both engines.

As for pricing, you can pick up a V40 and get change from £20 grand. That may sound a lot but it undercuts the equivalent Audi or BMW by a few hundred quid. It’s also better to drive than the Audi and more visually appealing (at least to my eye) both inside and out than the BMW. Is that enough to tempt you away from the Germans? It should certainly be enough for you give the V40 serious consideration.

Volvo V40 Specifications

D2 D4
Engine: 1,560cc 4-cyl turbodiesel 1,984cc 5-cyl turbodiesel
Power (PS/bhp): 115 (113) 177 (175)
Torque (Nm/lb.ft): 270 (199) 400 (295)
0-62 mph (seconds): 11.9 8.6
Top Speed (mph): 118 137
Economy (mpg): 78.5 65.7
CO2 Emissions (g/km): 94 114
Price: £19,995 £23,845