Review

Or they did. Perhaps no more. The first inklings that Volvo was moving up in the world that listens to Bang & Olufsen stereos, cooks in Poggenpohl kitchens, likes 'living spaces' to be painted surgically white and have wooden floors was the pretty C70 coupe, although it was still a little old public school rather than nu skool.

The XC90 sports utility vehicle proved that Volvo had moved on again into that 'lifestyle' segment marketeers go gooey over, but fine car that it is, it still has some of the gawkiness of the big Swedish estates, particularly inside.

But the new S40 is the second-coolest car I've driven this year, the iconic Land Rover Defender apart. This car will open Volvo up to a whole new, younger, style-conscious company car driver.

From the outside, it benefits from having toned down the clumsy curves of the S60. The car, which is based on the modular chassis system of the forthcoming Ford Focus, the current Mazda3 and Focus C-MAX, is compact and nicely proportioned without losing that Volvo feel of chunky reassurance.

But it's inside that the car is exceptional. It's like a hotel boutique. The test car, a 2.4 S, came with optional leather seats, which were light cream to the point of being white, while the dash was a combination of light grey and biscuit-coloured plastics. That the carpet wasn't seagrass and there was no mini-bar were the only disappointments.

Details such as the door handles were picked out in brushed aluminium, as was the floating centre console which has an icily minimalist design.

Gone is the graceless, clunky switchgear of other Volvos. Everything is pretty much contained in a strip the size of a video remote control on the floating panel. To work out where everything is takes some learning, but drivers will forgo some practicality in the pursuit of aesthetics.

The seating position is variable and comfortable, and safety features include driver and passenger airbags, an inflatable curtain, WHIPS-seats to restrict whiplash and SIPS side impact protection.

Don't think that just because this shares underpinnings with the Focus it's a utilitarian hatch with a fancy set of clothes and a boot, because it's a proper compact saloon. The boot space is fine and the rear seating accommodation adequate, standing comparison with anything else in the class.

The test car had only done 300 miles and the engine felt as tight as a drum, so performance was difficult to judge, but the engine is well-proven and with 170bhp, should give decent acceleration.

The clutch is light to the point of being airy, and the five-speed box, while being a short throw action with a sporty little lever, isn't quite as sporty as its looks suggest.

Ride quality is better than other Volvos, which tend to suffer from being overly soft and jiggle over uneven roads. The S40 is more controlled, handles better and has sharper steering than other cars in the line-up making it easily the most engaging Volvo to drive.

So this is a Volvo that's good to drive and pretty cool with it. How things have changed.

Fact file

Delivered price, standard car (P11D value) £18,415
CO2 emissions (g/km) 203
BIK % of P11D in 2004 26%
Graduated VED rate £160
Insurance group 13
Combined mpg 33.2
CAP Monitor residual value £6,550/35%
Depreciation 19.06 pence per mile x 60,000 £10,788
Maintenance 2.37 pence per mile x 60,000 £1,548
Fuel 8.00 pence per mile x 60,000 £6,900
Wholelife cost 29.43 pence per mile x 60,000 £19,236
Typical contract hire rate £416 per month
All figures based on 3yrs/60,000 miles. Monthly rental quote from HSBC Vehicle Finance

At a glance

For

  • Fantastic interior
  • Chunky exterior
  • Wholelife costs

    Against

  • Overly light clutch
  • Sleepy performance
  • Complex switchgear

    Three rivals to consider

  • Volkswagen Bora 2.3 V5 170
  • Lexus IS200 2.0 4dr
  • Alfa Romeo 156 2.0 JTS Veloce 1 4dr

    P11D price

    Looking at the standard equipment on all these cars, somebody has been copying someone else's homework. All cars have almost exactly equal specs with cloth seats, climate control, solid paint and the same number of airbags. All get a CD as standard but the Lexus gets a six CD autochanger, automatic halogen headlights and a front windscreen de-icer. Lexus normally trumps the premium brands but it manages to be just about the best in this company as well.

    Volkswagen £17,992
    Volvo £18,415
    Lexus £18,510
    Alfa Romeo £18,852

    SMR costs

    It's fair to say that Volvo and Volkswagen are the brands which are most associated with fleets in this comparison, and it's no surprise that they are well ahead of the others on servicing costs. After 60,000 miles, the Volvo's service cost would be around £500 cheaper than the Lexus. However, when it comes to SMR costs, it's reasonable to assume that with the Lexus in particular, 3.37ppm will be the final cost of running the car – according to our FN50 survey, they just don't break down. Not so sure about the Alfa Romeo in that respect.

    Volvo 2.58
    Volkswagen 2.75
    Alfa Romeo 3.29
    Lexus 3.37

    Fuel costs

    Despite having the biggest engine of all the cars at 2.4-litres, the Volvo does best on fuel consumption with a combined figure of 33.2mpg. That translates to a fuel cost of £6,900 over 60,000 miles. At the other end of the scale is the Lexus which, although it has only a 2.0-litre engine, manages a combined figure of 28.8, despite a six-speed box to help cruising economy. That's a £1,000 bigger fuel bill than the S40 – quite a difference. Fuel consumption and emissions have never been a big Lexus priority – after all that's Toyota's job.

    Volvo 11.50
    Alfa Romeo 11.64
    Volkswagen 12.04
    Lexus 13.25

    Depreciation costs

    Any shortfall on fuel costs for the Lexus are clawed back by pence per mile depreciation, which it wins by quite a distance. It would lose £9,840 over the 60,000 mile term. Compare that with the worst: the Alfa Romeo 156 loses £11,814 over the same distance. Despite its new nose, the 156 is an old car, and second-hand buyers are not entirely trusting of Alfas. The Bora does OK considering it is a booted version of the old Golf, while the S40 tucks in behind the Lexus.

    Lexus 16.40ppm
    Volvo 17.89ppm
    Volkswagen 18.45ppm
    Alfa Romeo 19.69ppm

    Wholelife costs

    On wholelife costs, the 156 comes last because it struggles with its value on the second-hand market. The other three have less than 1.2ppm between them. That's a total running cost of about £700. Of the three, the Volvo wins with little weakness in any area, but remember the other cars are well proven on the second-hand market so RV projections are accurate. The S40 is based on a prediction so final figures could be better or worse than those here. You decide.

    Volvo 32.06ppm
    Lexus 33.02ppm
    Volkswagen 33.24ppm
    Alfa Romeo 34.62ppm

    Emissions and BIK tax rates

    The IS200 is at a major disadvantage because its emissions are high compared with the other cars, and this translates to the tax bill. A 40% payer would have to fork out £2,369 in 2004/05 because it is in the 32% benefit-in-kind banding. The others all hover around the £2,000 mark, although the Volvo comes out best. It's in the 26% tax band, and would cost the same company car driver £1,915 over the same period. That works out at an extra £38 every month for the IS200.

    Volvo 203g/km/26%
    Alfa Romeo 205g/km/27%
    Volkswagen 214g/km/28%
    Lexus 233g/km/32%

    Verdict

    It is pretty obvious straight away that the choice comes down to the Volvo S40 and Lexus IS200. The interior of the Volvo has more class, while the Lexus is getting long in the tooth inside. There is a saving on the tax front – albeit relatively small – for choosing the S40, and it has better wholelife costs, by a little margin. In the end, the Volvo comes out just ahead.

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