BARCELONA, Spain—It’s hard not to be excited about Volvo these days. Yes, that is a truly weird thing to say about a Swedish car company best known for safe, slow, extremely square station wagons. But hear me out.

Unlike Saab, the other quirky Swedish automaker, Volvo survived the 2008 financial crisis. It did so with the backing of Geely, a fast-growing Chinese automaker, which, as of 2017, is also the owner of Lotus cars and Terrafugia. (The latter is [trying] to build flying cars.)

Yes, these are strange corporate bedfellows. Could we see a flying Volvo? Or a Lotus wagon? Who knows!? So far Geely seems content to write the cheques.

That strategy has worked miracles at Volvo, where it’s churning out its best cars in decades. It’s clear what was missing was money. Now Volvo has it, they’re shaking up the luxury car market. The XC90 and V90 are deeply desirable because of their Scandinavian style and lovely interiors. But they’re not exactly cheap, with prices just shy of $60,000.

The new XC40 sub-compact SUV under review here is Volvo’s first 40-series entry-level model. Starting at $39,500, the XC40’s mission is to retain the style and desirability of the flagship models, but bring it down to a more affordable price point.

The short answer in this section is Yes, the XC40 retains much of the desirability of Volvo’s flagship models. This is a stylish little ’ute. The two-tone paint is definitely a sign this ain’t your parents’ Volvo. Look inside. There are orange carpets! (Technically “Lava,” and it is an optional extra.)

In researching what customers wanted, Volvo found drivers didn’t want some dinky crossover. Small SUV buyers want to feel like they’re driving a real SUV. With the upright stance, tall height, and long hood, the Volvo won’t be mistaken for a jacked-up hatchback.


Volvo is also quite proud it can fit 21-inch rims on this thing. While they look excellent, you may want to go down a size or two if you live in a place with bad roads (e.g. Canada).

The XC40 is the first – but certainly not last – model based on Volvo’s new Compact Modular Architecture (CMA). The body is steel, with a few strategic aluminum bits to centralize mass. The suspension consists of MacPherson struts at the front with a four-link design at the rear. The latter is a space-saving setup that allows for a larger passenger and cargo area.

What sets Volvo’s new cars apart from the big German luxury brands is its attitude. Volvo’s cars are somehow more calm. They’re not overtly aggressive or sporty. Nowhere is this different ethos more evident than in the cabin.

Step in, and the place – even in this compact SUV – is airy and spacious. The windows are large. The dashboard is made of horizontal lines that run the width of the cabin. Rear seat space is fine for adults. One thing I’d change is to have the steering wheel telescope further out toward the driver.

Volvo did a lot of research about how people actually treat their cars. The result? Something between a garbage dump and a second home. On the XC40, clever design details abound. The speakers have been moved from the doors to behind the dash to make room for huge storage pockets. There’s a hook on the glovebox to hang delicate groceries or your take-out dinner. The centre console has a removable garbage bin.

Just because Volvos look good, it doesn’t mean the company has abandoned the old safety-first philosophy. Far from it. The XC40 has class-leading suite of standard safety equipment. Even on the very base model, you get: vehicle, pedestrian and large animal detection with automatic emergency braking; lane-keeping assist; driver alertness monitoring; road sign information; after-impact automatic braking; collision avoidance up to 60 km/h, plus the usual plethora of airbags.


Options include Pilot Assist, a Level 2 semi-autonomous system which helps a driver keep the car in the middle of a lane and a safe distance from cars ahead.

The vertical infotainment screen has a great design, but it’s already showing its age. Some functions – like switching to a Bluetooth audio source – are hard to find. The screen can also be a bit sluggish responding to inputs.

The XC40 is the first Volvo to have a digital key. If your friend needs to borrow your car, you can send them a code through the Volvo On Call app so they can unlock and start your vehicle.

If you want something pointlessly sporty, look elsewhere. If you want something that’s nice to drive in the real world, read on.

Handling is tighter than on other Volvos, with faster, heavier steering. It helps the car feel more responsive and agile than its bigger siblings. That said, there’s very little feedback through the steering wheel. It’s precise enough that placing it accurately on the road is never an issue. Our test cars on optional sport suspension with 20-inch rims handled the smooth roads around Barcelona well. Still, I’d expect the non-sport suspension to be a better choice for most people. We’ll test it on Canada’s crumbling pavement before making a final judgment on ride quality; early indications are promising. Like the interior, the handling exudes a sense of calm.

For power, you can have any engine you like, so long as it’s a 2.0-litre four-cylinder turbo. All-wheel-drive is standard, as is an eight-speed automatic gearbox. Power is rated at 248 horsepower and 258 lb-ft of torque. Other markets get three-cylinder and diesel options. There will eventually be a fully-electric XC40 as well. For now, the T5 motor is plenty. It’s incredibly smooth and quiet throughout the rev-range. Above 2,500 rpm it delivers a zesty burst of speed.


Starting at $39,500, the XC40 competes with sub-compact luxury SUVs like the BMW X1, Mercedes GLA, and Audi Q3. Its dimensions, however, are ever-so-slightly larger than those SUVs, making it a potential alternative to compact SUVs like the BMW X3 and Audi Q5.

In an industry first, the XC40 will be available by subscription service, called Care by Volvo. In the U.S., it’s $600/month including insurance and maintenance. Pricing for Canada hasn’t been announced yet, but the program should arrive here in 2018.

Volvo sales in Canada are up 40 percent since 2015, and it’s easy to see why: the new cars are really good. The brand is on a hot streak thanks to funding from Geely.

The sub-compact SUV segment is full of built-to-a-price, sorry-looking, or trying-too-hard designs. The XC40 manages to be both stylish and utilitarian. It drives well and looks good, and aside from a few minor issues with the infotainment system, there’s nothing here to fault.


Disclosure—This writer’s travel and accommodations were provided by the automaker for the purposes of this first-drive review.