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Volvo's renewal of its engine line-up across its range continues with the new 120hp D2 and 150hp D3 diesels, the latter driven here in the lower medium V40 model.
All manual V40 diesels are now under 100g/km, with this engine cutting emissions by 15g/km over the previous D3. That also means a 8.6mpg improvement in fuel economy.
Sub-100g/km emissions for a 150hp diesel is a great combination for company car drivers.
Volvo interiors are normally good, and the V40 can match anything in the class for quality and usability. The new engine is also a decent combination of performance and refinement.
Boot and rear seat space isn't great, but the same can be said for rivals such as the BMW 1-series and Mercedes A-class. The Audi A3 Sportback offers an advantage here, especially with the extra 45 litres of boot room over the Volvo's small 335 litres.
The Volvo looks expensive next to the A3 Sportback SE Technik, which has a P11D that's over £3000 cheaper and a significantly better residual value.
The V40 is a classy and good-looking compact premium hatchback, but the costs argument needs to be stronger, even with the impressive new diesel engines on board.