Volvo V40 better than a VW Golf

And it may have to prove that, if price tips are that otherwise the V40  may be too expensive for Australians.

Volvo is preparing for a fight on German soil but may face stiff buyer resistance. The Swede wants to put its brand new V40 hatch - in Australia early 2013 - against BMW, Audi and the new Mercedes-Benz A-Class.

But Australians may not shop the V40 against these Europeans and may not be prepared to pay mid-$40,000s prices - the field Volvo appears to aim at with plans to charge the same price as the outgoing S40.

The pricing issue, which is yet to be confirmed by Volvo Australia, is further complicated by Mercedes' plans to aggressively market its new A-Class in Australia at about $34,000.

The A-Class and V40 are similar in powertrains and size, but the Volvo edges ahead in equipment levels. It is roomier and better equipped than the BMW 1-Series range that starts at $39,563 for the entry-level 116i and on par with the new Audi A3 that will enter Australia with a $42,000 price tag.

Buyers may shop the Volvo against the Lexus CT200 hybrid, which starts at $39,990, or even a premium-spec Ford Mondeo ($37,740 for the Zetec), Peugeot 508 1.6 Allure ($39,490) and the 1.8-litre Volkswagen Passat sedan at $38,990.

So if Volvo is chasing volume, it may not be available in Australia unless the V40's price starts down around $32,000. That said, it's a very well shaped five-door hatch with excellent cabin space, a beautifully simplified dashboard and cabin trim treatment (the single gauge dash is pretty and easy to use), and lots of Swedish panache.

Volvo Car's senior vice president for product strategy, Lex Kerssemakers, says the V40 is "not a Golf rival''. "It's much better than a Golf. We developed thie V40 on the S60. It's not sustainable as a low-cost car.''

The V40 is claimed to be the company's safest car yet. It comes standard with a world-first pedestrian airbag system that, when the front of the car makes contact with a pdestrian, raises the bonnet and inflates a U-shaped airbag that covers the lower edge of the windscreen and the two windscreen pillars.

The car also gets a lane-keeping aid, park assist, an automatic road-sign recognition system (not yet developed for Australia), active high beam, a cross-traffic alert that senses oncoming vehicles at 90-degrees to the V40, and the City Safety technology that has now been upgraded to work up to 50km/h.

Volvo's senior safety advisor, Thomas Broberg, says the V40 has class-leading safety that "is an important step towards our vision that nobody should die or suffer serious injuries in a new Volvo car by the year 2020.''

The engine range spans everything from Volvo's low-emission turbo-diesel that claims CO2 emissions of only 94g/km, to the turbo-petrol T5 engine with 187kW/360Nm and a 0-100km/h acceleration time of 6.7 seconds. All petrol and diesel engine versions have start-stop and braking energy regeneration.

The T5 is also available in a 2.0-litre version; and two versions of a 1.6-litre turbo-diesel engine. Volvo Australia is yet to confirm engines for our market. Volvo expects to sell 90,000 V40s a year, with 85 per cent of the total volume will go to European customers. Production starts in May and the car will be built in Volvo's plant in Belgium.

VOLVO V40

Price: est. from $35,000 
Warranty: 3 years/unlimited km
Resale: n/a
Service interval: 15,000km or 12 months
Safety: seven airbags, ABS, EBD, EBA, TC.
Crash rating: 5 stars
Engine: T4 - 132kW/240Nm 1.6-litre 4-cyl turbo-petrol; T5 - 187kW/360Nm 2-litre 5-cyl turbo-petrol; D4 - 130kW/400Nm 2-litre 5-cyl turbo-diesel
Body: 5-door, 5 seats
Dimensions: 4369mm (L); 1783m (W); 1420mm (H); 2647mm (WB)
Weight: from 1360kg
Transmission: 6-spd manual or 6-speed dual-clutch auto; front-wheel-drive
Economy: T4 - 5.9 l/100km; 138g/km CO2; T5 - 7.9 l/100km; 185g/km CO2; D4 - 5.2 l/100km; 136g/km CO2