Last year, the XC60 was Volvo’s best seller worldwide. But V40 sales rose rapidly, making it the new number two model. Glenn Brooks tries an updated ‘model year 2014’ D3 five-cylinder diesel to see how it stacks up against its C-premium segment rivals.

Such is its ubiquity on British roads that it’s hard to believe this car has only been on sale here since 2012. Next month’s Geneva motor show will mark the second anniversary of the V40’s global debut but Volvo has been adding variants and generally tweaking the car seemingly constantly.

The most intelligent choice the company made in developing this model was giving it five doors – the C30 that it replaced was hampered by the inflexibility of its coupe bodyshell. You only need to cast your eyes about to see just how many more five-door Golfs and Audi A3s are on on the roads than the three-door versions to realise what people want in a C-premium hatchback. And while we’re on this topic, Evoques are everywhere but the three-door is rare. Not strictly a V40 rival of course but people do consider all manner of seemingly illogical alternatives when doing their research ahead of a new car purchase.

The V40 is also meant to be the successor for another now out of production model, the V50. Volvo doesn’t have anything on the market to go up against the new Audi A3 saloon but there have been reports that such a car – call it the S40 – might yet be built in China, mostly for that market. Geely stated in August 2013 that the first model it is co-developing with VCC would be launched in 2015. This might also be the vehicle that the firm says it will begin exporting in 2016, to Europe and the US, but we will have to wait and see.

This year, Volvo is expecting more big things from the V40, the company having updated it with a variety of evolutionally changes. This follows the launch of the low emissions D2 manual at last year’s Geneva show. This version, with its 115hp 1,560cc diesel engine has CO2 emissions of only 88g/km, which translates into average Combined fuel consumption of 3.4 l/100 km or 83.1mpg.

The D2, D3 and D4 engine labels can be confusing, and then there are the T2, T3, T4 and T5 petrol ones so let me explain how it works. So, D2 is the 1.6 diesel, D3 is a 150hp 1,984cc five-cylinder and D4 is a 177hp version of the same unit. The petrol T2, T3 and T4 are 120hp, 150hp and 180hp versions of the same 1,596cc four-cylinder engine. The T5 is the only five-cylinder petrol V40 and its 2,497cc engine produces 254hp. That 120hp T2 engine is, by the way, one of the MY2014 additions to the range, as is the option of having automatic transmission in combination with the D2 engine.

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Last year, Volvo’s larger models were the first to receive the new Drive-E 2.0-litre four-cylinder petrol and diesel engines so expect these to eventually find their way into the V40, probably for the model year 2015 range.

Of course I can’t not mention safety. Something new for the model year 2014 car is the extension of Volvo’s detection and auto brake technology. The optional Pedestrian and Cyclist Detection with full auto brake system means the car has sensors which scans the area ahead. If a cyclist heading in the same direction suddenly swerves out in front of you and a collision is imminent, there is an instant warning and full braking power is applied.

This technology also detects if a pedestrian steps out into the road in front of the car. If the driver fails to respond in time, there will be a warning just before the brakes are automatically applied. The V40 was also the first car in the world to have a pedestrian-protecting external airbag integrated into the windscreen end of its bonnet, and this feature, supplied by Autoliv, remains a standard feature.

In as-tested 150hp D3 R-Design form, the V40 costs GBP 24,795 and that’s good value, particularly if you consider cars such as the Golf GTD, Mercedes-Benz B-Class, BMW 1 Series five-door, previously mentioned A3 Sportback, and Lexus CT 200h to be its direct rivals. The R-Design model grade brings with it a special steering wheel, some superb sports seats covered in what was termed Nubuck Sports (grips you far better than shiny leather), special alloy rims, a body kit and one or two other features such as a big R-Design logo which illuminates the central instrument pod when you lock or unlock the car.

Volvo has given the MY2014 car what it calls a standard ‘Dynamic chassis’, by which it means sharper handling than Volvos have traditionally had, but still the emphasis is on comfort. Choose the optional Sport chassis and the ride height is dropped by 10mm, or 15mm in the T5, with firmer settings for the springs and shocker absorbers. Whichever set-up you specify, the steering is electrically assisted.

If you’re familiar with Volvos, you will feel instantly at home in the V40. The indicator stalks are the same as were used for the C30 – simply click a button at the end of the right-hand one to wipe the back window (or click the other way for intermittent rear wipe), push back for wash, pull forward for windscreen and headlight squirters, and so on. I like the look of the so-called ‘floating’ centre console but I’ve never really been sold on the supposed advantages that it has. Sure, there’s a place to store stuff behind it but because they’re out of sight, you end up forgetting you left things there.

Some touches which few other cars have include an illuminated gear lever shift pattern, the perspex clip on the A-pillar for holding pay and display tickets and a pair of ingeniously hidden cupholders for those travelling in the back.

Your rear seat companions probably won’t want to be in there for a long journey as headroom is fairly limited, as is legroom if the driver is anything more than average height. Still, some of that is down to the optional glass roof in the press test car (part of those MY2014 changes) which means the headliner is lower than it would be on a standard variant. You also have to congratulate VCC’s engineers for finding as much space as they were able to from a carried over platform, that being the latest update of what started life as the first generation Ford Focus architecture. Of course, it now has about as much in common with the original as the XC60 and another crossover on the same platform, the Evoque, but it has to last a few years yet until a fresh Geely and VCC architecture appears.

In February 2013, Geely and Volvo announced that they would co-develop a new platform, Compact Modular Architecture (CMA), for future C segment models. The V40 is obviously still fresh and if it has a typical Volvo lifecycle, it should have a facelift in about 2016 and then be replaced in 2019 or 2020. So what will CMA be used for first? The S40 I mentioned earlier would be one logical additional model, particularly as VCC management now speaks openly about relatively aggressive global sales targets which can surely only be attained by launching extra vehicles. Imagine an ‘XC30’ in the GLA-Class and Q3 segment and perhaps an XC40 as well to take on the soon to be launched BMW X4.

I said at the start of this review that the V40 was Volvo’s number two model in 2013 and having looked at global sales for January, that remains the case. The respective numbers are 5,071 versus 8,947, and even if you add in an additional 1,504 units for the V40 Cross Country, the XC60 remains safe in first place. Brand sales rose by 2.6 percent to 30,372 cars, with China now the company’s top market, having overtaken the US. But with the facelifted S60, XC60, XC70 and S80 as well as the addition of the V60, sales in America are expected to rise significantly this year.

Volvo Cars’ president & CEO Håkan Samuelsson stated at last month’s Detroit show that 2014 will be a year of growth, and a year of stronger profits – VCC managed to get back into the black in 2013, and sold 427,840 vehicles worldwide. The UK remained the fourth largest market last year, trailing only China, the US and Sweden, with 32,678 deliveries, which put it 6,000 units clear of next placed Germany. Clearly, the importer will want to build on last year’s success in 2014.

The improved V40 shows how serious the company has at last become about taking on the segment leaders directly. If Volvo continues to work on raising brand awareness and launches more high-margin models that are as good as this one – the next XC90 sounds as though it will be – the recent, difficult years might finally be behind it.