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Prod the start button and you may be surprised at how loud this T3 petrol engine is at first. Image Credit: Supplied picture

Though the world economy is downsizing, car buyers still want a premium badge on their bonnets, which is why the compact premium hatchback class is growing by the day. The Volkswagen Golf typifies this segment, with inherent appeal, no matter who you are.

On one side it competes with mainstream models such as the Ford Focus, while on the other there are the more obviously premium alternatives from Audi and BMW in the shape of the A3 and 1 Series. But now there’s a new option from Volvo — the V40.

First impressions are as good a place to begin as any, and the V40 is instantly off to a great start with a truly attractive — yet undeniably Volvo — exterior. The sculpted profile encompasses a five-door hatchback layout, and the interior is just as interesting.

Like the best cars in the sector, the V40 exudes quality, and though the rear seats are not the most spacious, they’re perfectly acceptable for two adults. Likewise, the boot is a little smaller than its rivals, but the split-level is useful and the rear seats fold more or less flat.

The front two seats are the best place to be, and the driver is well looked after with loads of seat and steering wheel adjustment. The chairs themselves are good to look at and supremely comfortable on a long journey. The switchgear is tactile and stylish, and the instruments are quite different. The graphics that make up the speedometer are a little gimmicky, but each to their own I suppose.

Prod the start button and you may be surprised at how loud this T3 petrol engine is at first. It settles down to a smooth idle, but it’s an audible unit a lot of the time. Though only of 1.6-litre capacity, the combination of a turbocharger and direct injection mean there’s a useful 150bhp at your disposal. Of more interest is the 270Nm torque figure, as it’s produced all the way from 1,600 to 4,000rpm.

The 0-100kph time of 8.8 seconds doesn’t do this powerplant justice, as it’s deceptively quick on the move. That makes for relaxed high-speed cruising, which is something the V40 excels at. There’s not too much wind or road noise to contend with, and it doesn’t use too much fuel either for a car with this sort of performance.

Now, many would expect the V40 to trail the German cars in terms of involvement, but Volvo has endowed its new hatchback with a surprising level of agility and engagement. The steering is sadly lacking in feedback, but it is direct and the chassis follows your command faithfully, turning in decisively and moving all apiece mid-corner.

It copes well with faster driving too, and even allows a little adjustability on the throttle at the limit of adhesion. Yes, we are still talking about a Volvo here. Don’t worry, it retains all that the Swedish brand is famous for in terms of safety, and actually adds something new in the form of the pedestrian airbag.

When an impact is detected, the airbag (positioned at the base of the windscreen) inflates, pushes the bonnet away from the engine and covers the lower part of the window and the A-pillars — all in a bid to reduce injury. It’s unique in the sector for now and standard on all V40s.

So how does the Volvo compare overall? To my eyes it’s more attractive than the 1 Series and (soon to be replaced) Golf, and far more interesting than the Audi A3. It drives at least as well as the Volkswagen and Audi — and is efficient to boot.

The new Mercedes-Benz A-Class gives the Volvo a run for its money, but no matter which way you look at it, downsizing has never looked this good.