Volvo this week started production of its new V40 hatchback, saying 85 percent of the car's production will be sold in Europe.
The V40 will arrive in showrooms in Europe and China starting in September. Although sales in the United States are not currently planned, the automaker did not rule out an eventual U.S. launch for the car.
"We're monitoring the situation," a company spokesman told Automotive News Europe.
The V40, which will compete against premium compacts such as the Audi A3, BMW 1 series and new Mercedes-Benz A class, will be built at Volvo's factory in Ghent, Belgium.
The five-door V40 replaces the S40 sedan and V50 wagon. Production of the C30 three-door compact hatchback will continue in Ghent for the moment. "The C30 will eventually go out of production to make room for V40 production," the spokesman said.
In designing the V40, Volvo said it targeted the strengths of rivals such as BMW. "It will be class-leading in fuel efficiency, safety and in driving dynamics," said r&d boss Peter Mertens when the car was revealed at the Geneva auto show in March.
The all-turbo engine range features five gasoline and three diesel units. The most frugal engine is a 115-hp 1.6-liter diesel, which has CO2 emissions of 94g/km and fuel consumption of 3.6 liters per 100km.
The car's fuel economy allows Volvo to target the important fleet market. "Much of its design, specification and technology has been developed with the company motorist in mind," said Selwyn Cooper, Volvo's UK corporate manager.