RIGHT from the outset, no beating around the bush, I can assure you that the new generation S40 eclipses its predecessor in any measurement we can think of that relates to driving control and ... fun.

That’s right: fun. Punting an S40 T5 manual along the winding, challenging roads of southeast Queensland, it quickly becomes apparent that this is a quality drive. In terms of handling and ride, it is eons ahead of the old car and competitive with its many and varied rivals in the class.

No surprise really, considering the C1 technologies underpinnings have already proved themselves under the Mazda3 and cope very well with the extra weight – particularly over the front-end – that S40 challenges it with.

The T5, aided by firm-ish suspension settings and sporty rubber, sits flat and turns in directly, only pushing the front-end on when you are trying hard with DSTC off. And you have to try hard to provoke torque steer by really stamping on the throttle with the steering wheel turned.

But the neatest trick is that the ride has not been turned tramcar-hard by making the chassis responsive and positive – an old Volvo trait. This is still a more than acceptable car in which to ride.

The steering is a bit light on the open road. It will be good in town but lacks that bite a bit of heaviness brings. There is feel there through the fingertips, not something many previous Volvos had.

The steering wheel itself is a nice, grippy little affair, complemented by other controls that are intuitive and ergonomically sound. Heeling and toeing was nice and easy.

The same can be said about the T5’s manual gearbox, again a tad light in its action but also direct without any notchiness or obvious flaws in the way it mates with the engine.

And that is another highlight. Being so broad in torque, the turbo 2.5 really is flexible and pliant enough to punt around all but the tightest of mountain climbs in third gear. The mid-range is where you want to be, not trying to rev the guts out of it because then it starts to lose its enthusiasm.

Below 6000rpm though it is smooth, quiet and quite lacking in that rough-edged gravelly nature long associated with Volvo’s five-cylinder engines – a direct result of the extensive changes made to external componentry to fit the engine into the bay.

Transfer to an SE auto and the whole experience becomes that tad more traditionally Volvo. There’s more roll and pitch, more understeer and the 2.4-litre normally-aspirated engine is that much more prone to issuing those gravelly notes we have come to expect.

The lower outputs mean the auto is struggling that little bit to match up to the torque band, so there’s a bit of gearchanging going on – particularly on hills when the cruise control is set.

Yet the SE is by no means a poor car. Its ride/handling bias is weighted more toward the former than T5 but it is still controlled and stable in its behaviour. Like the T5 though, there is a bit more cabin noise, both from road and wind, than would have been expected.

Apart from that, the driving environment of both cars is excellent and the use of colours and materials is tasteful in the usual Volvo fashion. You sit down in there, with big, comfy armchairs up-front and plenty of room for adults in the back.

This is a more commodious interior than might have initially been suspected but the payback appears to be the 404-litre trunk, which looks to be quite limited on practical space, as do the tiny and almost useless front door pockets (safety issue, apparently).

Much of the instrument panel and controls are pretty standard, just that the vertical centre console has that space behind it. Looks good and it’s sensible and functional to use.

Except that you can bang your fingers into the buttons on the console when changing gear in a manual car – just like in V70 or XC70. Thought that would have been figured out by now.

And Volvo Car Australia can ditch the tin brake shields in behind the disc brakes as well. Why? Drive down a dirt road and you’ll soon figure it out, as all sorts of rattles, shrieks and horrible metal-on-metal noises emerge. It’s the sound of pebbles caught between the brake disc and the shield – scary until you figure it out and remove them, an easy process.

There is little to complain about though. With C1 underpinning it, the S40 has become a far more impressive performer. Whether it could run with the cream of the compact luxury car crop like a BMW 3 Series or Audi A4 (quattro preferably) is debatable. But at least now it is a debate worth having.

Volvo’s selling the S40 with the tagline ‘You wish you were a bloody Volvo driver’. It’s not as outrageous a claim as it might have recently seemed.