Volvo V40 D2 SE

Volvo has much to prove with the new V40. It is the first product of the new-era, Chinese-owned Volvo, and the first for quite a while not to have been launched under the protective wing of previous owner Ford's engineers, who know what they are about.It drops into one of the biggest and hardest-fought classes on the planet, though with modest British goals: 12,000 units in 2013.One big point in its favour is that Volvo's people still have fine building blocks to work with; the coupe-estate styling is all their own, but the car uses basic Focus running gear underneath.

Volvo's people have spared no effort to make this car their own and have succeeded. In no sense do you approach the car thinking it is a Ford Focus. First, the low, stretched-out body shape is all Volvo, faintly reminiscent of the '60s 1800ES while presenting the most modern iterations yet of Volvo's recent design cues: the raked screen, the distinctive 'mouth', the exaggerated body shoulders towards the rear.The whole thing is made more viable by the world's first pedestrian airbag – standard in every V40 – which pops up from the rear edge of the bonnet when the car encounters a pedestrian and cushions their impact with the car. Not only does this save lives, but it also allows the cowl height to be much lower than most, which makes the car look better. Another fine safety feature is City Safety, which will stop the car dead if its radar system sees a pedestrian which you don't.The V40 comes in three well-equipped model levels: ES (everything you need), SE (keyless entry, rain-sensing wipers) and SE Lux (leather upholstery, 'bending' headlights). Five engine options are offered: three turbodiesels (a 1.6 four and two versions of the five-cylinder five-pot) and two 1.6 turbo petrol fours, with 150bhp and 180bhp. All but the fives are plucked from Ford's engine range, and none the worse for that.The 1.6-litre diesel D2 we tested will be the big seller in the UK, for two excellent reasons. Its remarkable CO2 output of 94g/km means it attracts a very low benefit-in-kind liability for business buyers – just £85 a month – while being a fine and surprisingly entertaining car to drive. Powered by the 114bhp four, driving through a slick-changing six-speed gearbox, it even manages to sound sporty as it sprints from 0-60mph in a decent-enough 11.7sec on the way to a 118mph top speed. Combined fuel consumption is a staggering 78.5mpg.Still, with figures like these, you're bound to think, as you settle into the bucket seats (well up to Volvo's best standard for long-distance comfort), that this will drive like a poverty model. It doesn't. The gearshift is excellent. If you depend mostly on the engine's 199lb ft of torque between 1750 and 2500rpm (and don't ever expect it to pull much below that) it feels willing and quite quick, cruising nicely at three-figure speeds if necessary.Interior quality is impressive and the new digital instrument pack – an option, but don't miss it – is a revelation. You can choose three regimes (Elegance, Eco and Performance) and not only the display but also the car's whole character changes to suit. It's new and different, and others will have to follow.However, the real revolution is in its dynamics. This car strikes a balance between ride and handling which far outstrips most cars. It takes Focus running gear and (with subtle changes to bushes, rates and damper spec) makes an even sweeter-riding, better-steering car. This is quite a claim to make, though, and we'll have to try it in the UK to verify it. But there is a polish and quietness to this car's ride and a sweet response to its steering that just shade the Ford.A sports-spec chassis we tried also seemed near-perfect for drivers who seek the ultimate in alertness, with a tiny sacrifice in ride quality. It was hard to find anything to criticise about this car.