Volvo is counting on its first model in the fast-growing premium compact SUV segment to break a lot of new ground for the automaker while it simultaneously wins customers from rivals such as the BMW X1 and Audi Q3.
The XC40 is Volvo's first model with inductive charging for mobile phones and the first to offer a car-sharing option for family and friends. It is also the first car to offer the brand's new all-inclusive subscription service, Care by Volvo, which the company calls a transparent, hassle-free alternative to leasing or buying the SUV. The service, which costs 699 euros a month for a 24-month period, has been rolled out in European markets such as Germany, the UK and Italy as well as in the U.S.
The car also has one of the most functional interiors on the market. The highlights include enough storage space in the doors for a laptop computer and large bottle of water, a fold-out hook for small bags or take-out food, a tissue box and a removable waste bin in the center console.
"Our aim is to be best in class when it comes to storage and space and I believe we have succeeded," said Jonas Engstrom, vehicle line director for Volvo's compact cars.
Along with the heavy emphasis on comfort and convenience features, Volvo has packed the XC40 with safety and infotainment technologies that appear in its larger, more expensive models such as the City Safety crash prevention system and a touchscreen-controlled infotainment system.
Market watchers believe Volvo will do well in the segment. "It will give more established premium compact SUVs such as the Audi Q3 and Mercedes GLA and even the new Jaguar E-Pace a run for their money," IHS Markit analyst Ian Fletcher said.
IHS Markit expects Volvo to sell 125,000 XC40s globally at the SUV's peak, led by China (25,000 to 27,000 sales), the U.S. (16,000) and the UK (14,000). "They are not huge numbers but they are consistent with where the brand has been. They also would provide a huge boost to Volvo’s overall numbers," Fletcher said. The XC40 is also a crucial part of Volvo's plan to increase global sales nearly 50 percent to 800,000 vehicles by 2020.
The X1 leads the premium compact segment in Europe followed by the Audi Q2 and Q3 with the Mercedes GLA and Range Rover Evoque rounding out the top five. The overall segment's sales were up 24 percent to 237,542 in Europe during the first half, according to data from JATO Dynamics.
The XC40's optional equipment includes Volvo’s semi-autonomous Pilot Assist system, which can steer, accelerate and brake the vehicle in certain settings; a 360-degree camera to help drivers maneuver in and out of tight parking spaces; as well as a system that guides the vehicle into a parking spot.