2018 Volvo XC40 revealed

Volvo has unveiled its XC40 compact SUV in Milan, revealing its smallest-ever crossover and the first Volvo to be built atop its new scalable CMA architecture.

An Australian launch is slated for the first half of 2018, with local specifications and pricing still to be confirmed. However, with its larger brother, the second-generation XC60, entering showrooms this October priced from $59,990, we can expect the more compact XC40 to wear a $40-50k sticker.

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That would make it a natural rival for the Mercedes-Benz GLA-Class and Audi Q2 not only on size, but in dollar terms as well.

From launch, the Volvo XC40 will be available with a D4 turbo-diesel four-cylinder or a T5 turbo-petrol inline-four. Down the line, turbo three-cylinder, plug-in hybrid and pure electric powertrains will be added – part of Volvo’s aspiration to have a fully electrified lineup from 2019.

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Both front-wheel drive and all-wheel drive will be offered, though transmission options are yet to be confirmed.

The technology story doesn’t stop outside of the engine bay either. The XC40 will feature the next evolution of Volvo’s vertically-oriented infotainment display and all-electronic instrument panel, first seen on the XC90, S90 and XC60, while Volvo’s Pilot Assist driver assist tech, autonomous emergency braking, “Run-off Road” protection and a top-down camera view will all be available.

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The interior is also designed to not only boost comfort, but provide more intelligent storage as well. Beyond just cramming in a few more cupholders, Volvo has kitted out the XC40 with huge door bins capable of taking a handbag or full-size laptop, under-seat drawers, a dedicated phone shelf with an inductive charging pad, fold-out bag hooks, and a built-in waste bin hidden in the centre console.

On the outside, Volvo’s blocky design language means the Swedish carmaker’s smallest SUV looks far from dainty, with pronounced wheelarches emphasising its square-shouldered styling. Two-tone paint schemes will also be available, with the roof able to be coloured black or white to contrast with the body colour.

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Australian pricing and features will be confirmed closer to the XC40’s local launch next year.