Price and equipmentThe V40 Cross Country is unlikely to ever be Volvo’s top-selling model. Not because it is not a good car. On the contrary. It is a terrific little car, very likeable and offers a fun, dynamic driving experience and a killer turbocharged engine, but more on that later.

The price of $52,990 plus on-road costs for the turbo-petrol T5 model tested here is pretty steep and would keep it off a lot of people's shopping lists.

But Volvo Car Australia is aware it is something of a niche model and is pushing the V40 hatch on which this is based as the volume seller.

For that sizeable sum you get an array of standard features in a beautifully presented premium cabin.

Everything from leather steering wheel, leather seats, seven-inch touch screen, sat-nav and Bluetooth to power door mirrors, 18-inch alloy wheels, adaptive headlights, climate control, electric driver’s seat with memory, rear parking sensors and camera, rain sensing wipers with tunnel detection and front tread plates are standard fare in the Cross Country.

As with most luxury Euro brands, there are innumerable options and options packages, such as a panoramic tinted sunroof ($2650), premium Sensus sound system ($1425), heated front ($375) and rear ($525) seats and metallic paint ($1750).

It wouldn’t be a Volvo without all the latest safety technology and the V40 excels in this area. Eight airbags are standard, as is emergency brake assist, however a lot of the gear is optional.

A driver support package that includes Volvo’s Blind Spot Information System, adaptive cruise control, a cross traffic alert and park assist is a $5000 option, while the Driver Alert system with lane departure warning, active high-beam, forward collision warning and lane-keep assist adds $2075.

Another package includes the aforementioned Driver Alert system along with full auto braking, pedestrian and cyclist detection, adaptive cruise and a collision warning costs $6250, bringing the cost of the V40 Cross Country to a sliver under $60,000.

Back to that price. If you have this kind of money to spend, let's look at what Volvo’s rivals offer.

For just $2000 more you can get into something else from the Volvo stable – the V60 T5 Kinetic wagon. The stylish load-lugger is bigger and can carry more cargo, but it has a smaller, less powerful 2.0-litre engine.

The most closely aligned variant in Mercedes-Benz’s uber-popular A-Class range is the 155kW/350Nm A250 Sport which retails for $49,900, but this is more of a hot hatch and may not appeal to buyers chasing the rugged look.

Other luxury hatches at this price point worth considering include the Lexus CT200h F Sport for $50,990 and the BMW 125i 2.0-litre hatch from $47,500.

There are few direct rivals for the V40 Cross Country but potential buyers are likely to look at any number of compact SUVs/crossovers in this bracket, including the Audi Q3 TFSI from $49,450 or a Land Rover Freelander Si4 SE petrol that starts at $55,600, while the stylish Range Rover Evoque is a touch more pricey at $61,419 for the base petrol four-door.

We question why you would pay an additional $3000 over a well-specced regular V40 T5 R-Design ($49,990) as it features the same powertrain and most of the same standard features.

But there are likely to be more than a few punters who won't consider anything else and be happy to cough up for the spunky little jacked-up hatch. Volvo's V70-based XC70 (formally Cross Country) was a huge hit for the Swedish car-maker when it first arrived in 2000 and there are fans of that car that are happy to downsize.

InteriorVolvo’s latest crop of passenger cars all feature well crafted, beautifully designed, high quality interiors and the V40 Cross Country is certainly no exception.

There is a premium feel to the supportive leather seats and the chunky leather steering wheel feels delightful. You start to become more accepting of the price when you plant yourself behind the wheel and find a suitable driving position.

While German car-maker Audi, deservedly, gets a lot of attention for the quality and design of its interiors, we think the Swedes deserve a round of applause, and a bit more recognition too.

Simple, clean lines (much like the V40’s exterior design), classic design elements and quirky modern touches, like the now familiar Volvo floating console add to the richness of the cabin.

Volvo has even incorporated the body paint colour, raw copper, into the panels on the centre stack which is a nice touch.

The seven-inch touch-screen is big enough and easy to navigate, although some of the controls in the centre stack, including audio and climate control take some getting used to.

The V40 is a small hatch, so don’t expect to fit five adults in without some complaints, but for cruising around with two adults and the occasional guest stars in the second row, it does the job admirably and comfortably.

Open up the hatch at the rear of the stylish hatch and you will find a cargo area that can carry 335 litres which is average but not amazing. The A-Class can lug up to 341 litres while the BMW 1 Series can take 360 litres.

Soft-touch materials on the dash, subtle chrome highlights, premium door materials, a top-notch stereo and grey interior colours that do not look dark and gloomy lift the V40 right to the top of the class.

Engine and transmissionThe T5 stands for Turbo and five-cylinder, which, in our opinion is a match made in heaven. The terrific 2.5-litre turbo-petrol engine is a brilliant unit and not just because of the classic five-cylinder ‘warble’.

The blown five-pot produces 187kW at 5400rpm and 360Nm between 1800 to 4200rpm and drives all four wheels via a sweet and smooth six-speed automatic gearbox.

This is more powerful than its 155kW/350Nm Mercedes-Benz A250 Sport and the 160kW/310Nm BMW 135i rivals, although both these German contenders top the Swede when it comes to fuel economy.

Mercedes and BMW both claim official fuel consumption of 6.6 litres per 100 kilometres on the combined cycle, while the Volvo uses 8.4L/100km. To be fair to the Volvo, the Germans are both powered by smaller, naturally aspirated 2.0-litre units and the V40 is all-wheel drive which adds to the fuel use.

Our time in the Volvo produced a rather high 11.0L/100km but that was achieved mainly around town in heavy city traffic or pushing the little V40 hard to get that sweet sound.

Speaking of acceleration, Volvo says the T5 can dash from zero to 100km/h in just 6.4 seconds and we wholeheartedly believe them.

It may not look like a hot hatch but the V40 Cross Country in T5 guise betrays its crossover looks with solid straight-line performance that feels exciting and beats the aforementioned Mercedes A250 (6.6 seconds), but can’t quite catch the BMW 125i (6.2 seconds).

Ride and handlingWhether you are bopping around town in city traffic or pushing the V40 a little harder on more challenging roads, the Volvo provides a solid, comfortable ride.

The steering is sharp, direct and is nicely weighted and adds to the enjoyment of driving the Cross Country.

Suspension is MacPherson strut at the front and multi-link independent rear suspension and we felt it was tuned appropriately to tackle a variety of different road conditions. The off-road styling is a little deceiving and you probably wouldn’t want to veer too far off a dirt road in the Cross Country, but the little hatch handled the small amount of rough stuff we introduced it to by soaking up bumps and corrugations with ease.

Volvo has fitted the V40 with the same all-wheel drive system as the XC60 SUV and matched with the dynamic chassis, ensures there is no slipping or skipping over rough surfaces, even at speed.

In fact, the V40 Cross Country had grip to spare, sticking to the road in seriously wet conditions, confidently holding the road thanks in part to the Pirelli hoops on the 18-inch alloy wheels.

Safety and servicing It’s a Volvo so safety is a no-brainer right? Well yes and no. As mentioned earlier, there are a lot of neat safety functions such as the cross traffic alert, pedestrian and cyclist warning and adaptive cruise control, but these are all options that can add up rather quickly.

At this price, we feel some of the features should be standard.

Even without the potentially pricey options, the Volvo is a pretty safe bet.

The Cross Country is yet to be tested by ANCAP, but the vehicle on which it is based, the V40 hatch, received a five-star crash safety rating.

The warranty for the Cross Country is three-years/unlimited kilometres and servicing is every 12-months/15,000km intervals.

Verdict In the classy V40 hatch, Volvo has designed and produced an excellent small car that deserves to be considered along with key competitors such as the Mercedes-Benz A-Class and BMW 1 Series.

Whether the crossover styling flourishes of the V40 Cross Country are to your taste or not, there is no denying the T5 is a fabulous little performer that offers excellent road holding ability, sharp dynamics and a spirited drive.

The premium over regular V40 variants and the lengthy list of optional safety features might steer some buyers away, but those willing to cough up the extra cash for the chunky looks will be rewarded with a stylish, fun and very enjoyable Swedish alternative.

RivalsMercedes-Benz A250 Sport (from $49,990 plus on-road costs).

More of a hot-hatch than the V40 Cross Country, the A250 Sport sits in the same price bracket and offers solid dynamics with sporting performance. Definitely worth considering.

Audi Q3 2.0 TFSI Quattro (from $49,450 plus on-road costs).

The A3-based Q3 offers a higher ride height and more of an SUV look than the V40, and the 2.0-litre petrol engine is a cracker.

Lexus CT200h F Sport (from $50,990 plus on-road costs).

The Lexus CT is often forgotten about in this company, and while it may not match its rivals dynamically, it offers hybrid fuel efficiency and loads of standard features.

SpecsMake and model: Volvo V40 Cross Country T5
Engine type: 2.5-litre five-cylinder turbo petrol
Layout: All-wheel drive
Power: 187kW @ 5400rpm
Torque: 360Nm @ 1800-4200rpm
Transmission: Six-speed automatic
0-100km: 6.4 seconds
Fuel consumption: 8.4L/100km
CO2 rating: 139g/km
Dimensions: L 4370mm H 1470mm WB 2647
Weight: 1588kg
Suspension: f/r: Struts/multi-links
Steering: Electric power assist steering
Price: $52,990 plus on-road costs