Achtung! Volvo XC40 has German rivals on notice

Pras Subramanian

In the span of just a few years, Volvo has basically had a complete makeover. Once known for understated design and safety, the 91-year old automaker has been upping its game from a design and luxury standpoint, a move precipitated by Volvo’s sale to Chinese automaker Geely (0175.HK) back in 2010, which wanted to push Volvo as a prestige marque.

The award-winning XC90 SUV kicked it all off four years ago, but the two younger siblings of the XC90 are getting even more praise. The XC60 was named World Car of the Year in New York this year, with the last of the trio, the all-new XC40, snagging European Car of the Year honors in Geneva.

Volvo XC40 (Credit: Pras Subramanian)

The XC40 is huge release for Volvo, as it competes in the hyper-competitive luxury crossover/compact SUV space. Rick Newman and I tested out the XC40 in R-Design trim (which is sandwiched between the base Momentum and top tier Inscription trim lines). In addition to great design and unique features, it’s what Volvo’s doing on the ownership front that could make this car a big hit. We’ll have more on that later.

Is that a Volvo?

Despite it being the ‘baby’ SUV in Volvo’s range, we found the styling to be quite muscular for an entry-level model. Volvo seems to be betting the youthful styling will appeal to younger, millennial buyers, while keeping the more conservative styling of the higher-up models for older buyers and those with families.

Volvo XC40 (Credit: Pras Subramanian)

The aggressive, youthful appearance is apparent with the stout front end and grill, high belt line, and bulging wheel arches. The car is rather compact, but it all comes together nicely with a taut hatch with angular, Volvo-esque tail lights. It’s a rather handsome car, and one that got a surprising amount of looks from people on the street. It really looks different than anything else in its class, and that is a massive plus in this segment.

Volvo XC40 (Credit: Pras Subramanian)

Creature comforts, updated

The interior is a another big statement for Volvo in its conquest to steal buyers of German rivals like BMW (BMW.DE), Mercedes (DAI.DE), and Audi (VOW.DE). Let’s start with that large touchscreen display, mounted vertically in the dash. It handles everything: audio, navigation, car settings, climate control and more. Volvo calls it Sensus control, and for the most part it worked just fine. The high-res screen rendered everything clearly, and  touchscreen response was solid. Volvo is seeing the future here, making the car function like a smartphone (aping Tesla’s Model S and Model X center stack layout).

Volvo XC40 (Credit: Volvo)

Under the dashboard hood, all gauges were digital and clear, with the right amount of display info. My only niggle here was that the screen didn’t seem as high-resolution as the one in the center stack, but perhaps it was just my vantage point.

Fit and finish in the cabin was excellent. We loved the seats with the R-Design’s nubuck inserts that kept us in place during spirited driving. The dashboard itself was wrapped in soft touch materials, with special R-Design metal inserts in place. The steering wheel was leather wrapped and had the right amount of heft to it.

Rick Newman and I were fans of Volvo’s ingenuity with space and utility in the cabin. See our video above for more.

Volvo XC40 interior (Credit: Volvo)

Engine and drivetrain

Under the hood, all XC40s come with a 2.0L turbocharged I-4 pumping out 248-hp and 258 lb-ft of torque to all four wheels. This engine, coupled with its 8-speed automatic transmission, made this CUV surprisingly quick off the line, especially in dynamic mode. With a 0-60 time of 6.2 seconds, it’s quicker than a Porsche Macan outfitted with its turbo 4-cylinder.

Volvo intends to introduce a front-wheel drive XC40 paired with a 187-hp 4-cylinder engine later this year.

Care by Volvo—the XC40’s Trojan Horse

Perhaps nothing else in the XC40, will push the needle farther with consumers than something that actually isn’t physically part of the car — the Care by Volvo subscription ownership plan.

Meant to target younger buyers and urban/suburban types who want to “own” a car without many of the trappings, Volvo is offering the XC40 for $600 a month (in Momentum trim) in an all-in type of lease program. This payment includes all lease fees, taxes, insurance (yes, you heard that right), and maintenance, including wear-and-tear items like brakes, tires, wipers, etc.

Care by Volvo website

Buyers pick up the car at the local dealership, but otherwise have no other interaction with the dealer, except for when it’s time to service the car. Befitting a certain type of consumer, everything is handled through the Volvo website and mobile app.

The Care plan is for two years, but after one year, buyers can swap into a different car if they choose (which would then restart the two-year period). Currently the only models on offer are the XC40 in Momentum trim ($600) and R-Design trim ($700), but the new V60 wagon will be coming soon.

Rick and I believe this is the Trojan Horse for the XC40. This unique ownership plan will likely get more drivers in the seats of these cars, since ‘ownership’ is such a simple endeavor. We’re already hearing that Volvo’s ship date for Care vehicles is etting pushed out, likely because demand is so high.

Volvo XC40 (Credit: Volvo)


Our tester, in R-Design trim, came in at $45,835 and included options like the Premium package ($900), Vision Package ($1,100), Advanced Package ($995), upgraded paint, panoramic roof, 20” wheels, and a premium Harman Kardon sound system.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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