Think for a moment about who buys medium range cars. Most of the mainstream brands' products are snapped up by companies to be used as fleet cars. Only a surprisingly small percentage of new Vectras and Mondeos are bought by private buyers who walk into a showroom. In contrast, compact executive cars from BMW and Mercedes, despite making respectable profits from corporate buyers, are still bought largely by private buyers. It's rare that a car can appeal to both at the same time, although Volvo's S40 1.8-litre range may have that particular trick taped.

It's tricky to know quite how to classify the S40. Volvo calls it a 'Premium Compact Saloon' and it's ostensibly designed for someone who'd like something nicer than a medium range Mondeo or Vectra-style model but can't quite stretch to a BMW 3 Series, an Audi A4 or even Volvo's own S60. The 1.8-litre engined models open at £16,295 for the S trim level and top out at £18,295 for the R-Design Sport; still less than even the most humble BMW 3 Series saloon but pitched halfway up the Mondeo range.

Private buyers like the S40 because it looks good, is well styled, is based on a modern chassis, has slick interior detailing and features a semi-premium badge that sets it apart from the usual M25 foot soldiers. Business users will warm to it due to its high residuals, reasonable upfront asking price and surprising interior space. Both fleet managers and private buyers will like the car's 39mpg fuel economy figure although the 174g/km CO2 figure is respectably meagre. The engine may be a compact unit but it still cranks out 125bhp and will get the S40 to 60mph in 10.9 seconds and on to a top speed of 124mph. Buyers looking do go beyond the call of duty in the quest for fuel economy and low emissions could also consider Volvo's 1.8-litre FlexiFuel engine that is capable of running on renewable E85 Bioethanol or normal unleaded.

Volvo has made some small incremental improvements to the car's look and feel. At the front end, the chrome-framed 'egg-crate' grille has been reprofiled and features a bigger Volvo badge. Clear lensed headlights and a wider air intake look a little more distinctive, while at the back there's a revised LED tail light assembly as well as a modified bumper, boot handle and tail pipe design.

"It's rare that a car can appeal to both private and fleet buyers at the same time"

Three versions are offered in 1.8-litre guise. The S model features 16-inch alloy wheels, a CD stereo, driver and passenger airbags, an inflatable curtain, a height adjustable steering wheel, dynamic stability and traction control and electronic climate control. The SE model adds leather upholstery, 17-inch alloy wheels, a choice of aluminium, wood or iced aqua trim, rain sensing wipers, a trip computer and a whole host of other electronic gizmos. Body-coloured side mouldings and front fog lights are also included. There's also the option of the ritzier R-Design Sport derivative that delivers a fully bodykit and upgraded interior trim.

Of course, cynics will point out that Volvo's old S40 campaigned on the 'Premium Compact Saloon' card for years without much success, but then that car never had an engine like this in its armoury - or the high-tech design and engineering to go with it. One of the best things you can say about this car is that it takes many of the features that have made the larger S60 so successful and shrinks them into a handy-sized package.

All too often, we hear about innovations in car design and what we really get is moderately incremental changes. The S40 features a number of styling touches which we've genuinely never seen before. The exterior won't get too many pulses racing, effectively resembling a shrunken S60, but the cabin is a delight. Volvo interiors are traditionally odd things. Although they work supremely well, they are often clunkily designed with scant regard for the sort of slickness that separates them from rivals. Little of the design flair we usually associate with the Scandinavians has traditionally seemed to translate into their cars. The 'spaceball' gear selector in the S60 showed that Volvo could come up with some neat ideas and the S40 takes the spaceball and runs with it. The key design feature is a centre console that's a softly contoured moulding featuring supremely easy to use controls and fresh air behind it. You can specify wood, aluminium, plastic or semi-transparent plastic finishes and everybody who gets in will notice it. This time around, the controls have been altered while the centre tunnel storage area features a smaller handbrake and a revised armrest for better driver comfort.

The S40 rides on the same basic chassis set up as the Ford Focus, the Mazda3 and the Volvo V50 estate. That's not to say the S40 is simply a rebodied Focus. Although the underbody, subframes and suspension layouts are the same on all these models, there's vast scope for tuning of individual aspects so all will drive differently.

Volvo haven't skimped when it comes to safety and they claim that the S40 is as good to crash in as the flagship S80 saloon. Making a small car as safe as a big 'un takes some doing and it's only when you look at some of the finer points of how Volvo have achieved this that you realise quite what this commitment means. It involves casting the turbo housing as one with the exhaust manifold so that the engine is more compact when mounted transversely, giving more space for crush zones. It means developing the Intelligent Driver Information System which monitors how hard you're using the throttle, brakes and steering and will hold incoming telephone calls or satellite navigation instructions until things have calmed down so as not to distract you in the middle of a manoeuvre. It means using four different grades of high tensile steel for crash protection.

The Volvo S40 1.8 is a true crossover car. Equally as appealing to fleet and private buyers, it looks set to continue to be a very appealing first rung on the Volvo ladder. The Swedish company will be hoping that they've finally cracked this 'Premium Compact Saloon' thing once and for all.

TOP 5 S40 DEALS

The results below show the top S40 deals on buyacar

	Volvo S40 1.8 S 4dr Saloon
	ETR	Mthly £249	Saving £2,607	Price £13,341
	Volvo S40 1.8 SE 4dr Saloon
	ETR	Mthly £283	Saving £2,845	Price £14,571
	Volvo S40 1.8 R DESIGN Sport 4dr Saloon
	ETR	Mthly £283	Saving £2,931	Price £14,975
	Volvo S40 1.8F R DESIGN Sport 4dr Saloon
	ETR	Mthly	Saving £2,984	Price £15,195
	Volvo S40 1.8F SE 4dr Saloon
	ETR	Mthly	Saving £2,897	Price £14,793

typical 12.18% APR

PCP finance quote over 48 months,  10,000 miles pa,  deposit of £1000