Volvo knows that the real profit these days lies in the premium market. The Swedish car firm wants to be considered as a contender in the executive chase and has spent the last few years getting its model range in order.
To succeed, Volvo knows it has to cast aside its previous reputation for boxy conservatism and carry forth a new persona of style and performance. In terms of styling, it has had moderate success with the likes of the S80 and S60, all under the watchful eye of former design chief Peter Horbury, now executive director of design for all of Ford's Premier Automotive Group, also including Jaguar, Aston Martin and Land Rover. As for performance, Volvo might not yet have matched its German competitors, but it's constantly improving its image, with the highly successful XC90 and more recently the return of its R range of performance models.
Arguably its weakest link has remained the entry-level model. While the S60 and S80 offered a reasonably credible alternative to the Germans, the current S40 was really a chaser to the fleet sales and would never be considered in the same breath as the likes of the BMW 3-series or Audi A4.
Until now perhaps.
As with the experienced premium players, Volvo realises that to succeed in winning over the upwardly mobile executive, you must offer a car that bears a striking resemblance to the bigger models in the range. It's with this in mind that the new S40 is a mini-clone of the S60, and a vast improvement on the current model's bland lines and taking a look we really like.
The new S40 also seems the model in the Volvo line-up to benefit most from the car firm's Ford parentage. It shares its body platform and chassis with next year's Focus (along with the current C-Max and Mazda3). The fact the Focus has long won plaudits for its handling would seem to bode well for the Volvo.
On our test drives in the car this week, the suspension and ride quality were as good as we expected, though on the sporty T5 version the ride is harsh, and we suspect it would be too rough on bumpy Irish roads. The more sedate suspension settings on the other test car, the 2.4-litre would seem more amenable to our roads. Our only real qualm was with the steering, which seemed rather disinterested in the whole affair, like an inattentive student.
Another benefit of having Ford to lean on is that the S40 will come with a wider variety of engine options than previously. There are 1.6-litre and 1.8-litre petrol units and 1.6-litre and 2-litre diesels, all from Ford. There's also some traditional Volvo power with the top-end 2.4-litre and a T5 2.5-litre turbo petrols, capable of 150 mph and 0-62mph in 6.8 seconds. Only these two engines were on test at the launch on Monday. First impressions of the engine line-up suggest the 2.5-litre, while sharp, will have a tough time fighting off equivalently powered Germans. The 2.4-litre is probably the better all-round package given the ride quality. But the overall impression would leave us to question the potential potency of a 1.6-litre powered S40.
Perhaps the most impressive feature of the new car is the interior design and finish, which could be considered a class leader when pitted against the entry-level offerings from premium Germans like BMW and Mercedes. The most eye-catching feature is a new 'floating' Brushed metal central control panel. Tall and slim it houses all the controls for the stereo, heater and so on. It's floating in that it's only about half an inch thick, with clear space behind it.
In terms of space, the car is visibly smaller than its predecessor and so some sacrifices have had to be made. While there's ample legroom for driver and front seat passenger, rear seat passengers may find the whole affair a little cramped. With potential competitors getting bigger rather than smaller - the next version of the 3-series for instance - the S40 may seem smaller still in years to come. Perhaps the greatest sacrifice seems to be in the boot, where the sloping rear window severely limits the loading area.
Volvo has decided to wait until the outcome of today's budget before setting prices, but if the Minister for Finance leaves vehicle registration tax alone, it should be pretty competitive. In Britain, where prices have been published it's considered to represent good value.
Volvo is keenly aware of how difficult the young executive market is to crack, and badge-conscious
motorists will not be easily wrestled away from the likes of the 3-series. That's why it's planning to
concentrate on new-money movers from the mainstream Opel and Ford models. It's a cut-throat
market, but if only for its interior, the S40 has sharpened Volvo's sword. It has certainly come a long
way from the likes of the old 340 model.
Sadly, in what would seem a confused marketing strategy, Volvo is launching the new model top
down, with the 220bhp T5 Flagship and the 170bhp 2.4i the first to be introduced. The decision
arises from the fact that the current model will stay in production until the next spring and will be sold
under the moniker of S40 Classic. Volvo is happy that customers won't be confused when they see
two very different S40s in showrooms. We remain to be convinced.