Volvo is working hard to revamp its entire lineup, and that began with the introduction of the 2016 XC90. Along with the debut of this SUV came plans to create a fuller line of SUVs that will include the XC90, XC60 and the XC40. We’ve seen the XC40 out testing in a jacked-up version of the V40 wagon, which is not available in the U.S. as of February, 2015. Now new reports from Autocar are pointing toward the raised wagon arriving by 2019.
With the new XC40, the upcoming XC60 and the 2016 XC90, Volvo will finally have an SUV lineup that can compete with the likes of Mercedes, Audi and BMW in all of the key niches. The only issue is whether or not there are really that many people who are interested in buying a Volvo for this SUV expansion to really be worth it.
Updated 02/22/2017: Our spy photographers caught the upcoming XC40 out for a new testing session, this time during cold winter conditions somewhere in Sweeden.
Continue reading to check out my preview of the 2020 Volvo XC40.
Spy Shots
February 22, 2017 – Volvo XC90 caught testing once again
October 22, 2015 – first Volvo XC40 mule caught testing
Exterior
Being based on the S40, look for the XC40 to be the smallest of the Volvo SUV lineup. I expect it to be roughly the size of the Mercedes GLA and BMW X1, given the XC60 will have the joy of competing with the likes of the X3 and the GLC, and the XC90 will take on the X5 and GL.
Being based on the S40, look for the XC40 to be the smallest of the Volvo SUV lineup.
Some of the cues from the XC90, like the modernized version of Volvo’s vertical taillights and the signature Thor’s hammer headlights, will carry over into the XC40. Where I expect the XC40 to differ from the XC90 is that I believe it will be shapelier, as the 40 will likely be aimed more toward a younger crowd. Not that it’ll be a huge movement away from the typically subdued Volvo look, but it will have its own signature body lines that will suit the young professional a little better.
Interior
Volvo V40 interior pictured here.
On the inside, expect all of the typical Volvo niceties, like an advanced infotainment system, a high-grade audio system, tons of tanned animal hide, and plenty of soft-touch surfaces. On top of the luxurious stuff, look for the XC40 to lead its class in safety. Where Volvo 
may have suffered at times for lack of styling, it has almost always led every class it participated in when it comes to safety ratings. I expect 10-plus air bags, lane-keeping assistance, a blind-spot monitor, a rearview camera, and more.
Drivetrain
The XC40 should carry a lineup of engines similar to the V40. In Europe, I expect to see a full lineup of engines available, including the D2, D3, and D4 diesel engines, and the T2, T3, T4, and T5 gasoline engines. In the U.S., however, I expect to see just the 180-horsepower T4 and the 245-horsepower T5 engines make their way into the lineup. Eventually, the diesel engines may make the trip across the pond, but the demand still isn’t high enough in the U.S.
I also expect to see the XC40 to come standard with front-wheel-drive and offer all-wheel-drive as a low-cost option.
Prices
With the base 2016 XC90 T6 AWD starting at $48,900, I can work down from there to estimate roughly what the XC40 would run. To remain competitive and in line with how other Volvo products are priced relative to their German competitors, I expect the XC40 to chime in at around $30,000, putting it just shy of the base X1.
In terms of release date, it should arrive sometime in 2017.
Competition
Mercedes-Benz GLA-Class
The Mercedes-Benz GLA250 will be a key competitor for the XC40, and its base setup – the GLA250 – carries a 2.0-liter turbocharged four-cylinder that develops 208 horsepower and 258 pound-feet of torque. This allows it to hit 60 mph in just about seven seconds. On the financial side, the GLA250 chimes in at $33,300, putting it a few grand above where I expect the XC40 to base at. This will give the Volvo the small gap it needs to fit in all-wheel drive without quite touching the GLA250’s base price.
Read more about Mercedes GLA here.
Audi Q3
The Audi Q3 arrives in a few flavors in the U.S., with the key competitor to the XC40 being the base model. In this trim, the Q3 arrives with a 2.0-liter turbocharged four-cylinder that pumps out 200 horses and 207 pound-feet of torque. This engine delivers power to the front wheels as standard, and gets the small SUV to 60 mph in 7.8 seconds. Upgrading to quattro all-wheel-drive pushes the sprint time closer to eight seconds. Audi typically runs about the same pricing scheme as Volvo: look at BMW and Mercedes , then scale back. With this, the Q3 comes in at $32,500 in its base trim, while the Prestige model goes for $36,400.
Read more about the Audi Q3 here.
Conclusion
The compact luxury SUV realm just keeps on growing, but the addition of the XC40 seems more like hitting a key niche as opposed to making sure it keeps up with its competitors. With the XC90 in place and the XC60 on the way, a perched hatchback like the XC40 was the logical next step. And with the success of the XC90 still recent, now is the time for Volvo to strike in this segment. Now, if only Volvo would commit to creating a Polestar version to take on the RS Q3 and the GLA45 AMG.
Updated History
Updated 10/22/2015: Our spy photographers caught the first mule of the future XC40 out for a testing session. The XC40 will be among the first cars to be built on the company’s new CMA platform ad comes to attack smaller SUVs from Audi and BMW.
Updated 10/14/2015: In a recent interview with Automotive News, Volvo CEO Hakan Samuelsson confirmed that the company’s new compact SUV will be unveiled sometime in 2018. The model will be developed on the company’s new compact modular architecture (CMA) that will also be used for the next generation V40 and V40 Cross Country starting 2019.
Updated 02/23/2015: British magazine AutoCar had the chance to talk with Volvo’s CEO Hakan Samuelsson and learned a series of new details on the upcoming XC40. Continue reading to find out when will you be able to drive the new crossover.