The 2nd generation Volvo S40 compact sedan resembles a 3/4 scale version of the midsize S60. Designed to compete in the entry-level sport sedan segment, the S40 is available with many premium features not available from other competitors. Engine choices include a 168-bhp 2.4L I-4, or turbocharged 227-bhp 2.5L I-5 engine, coupled to a 5-speed Geartronic(R) automatic. The sporty S40 T5 is available with AWD for improved traction and handling. Dynamic Stability and Traction Control (DSTC), Bi-Xenon headlights, and DVD navigation system are available.

The five-speed automatic is now standard on all models. The new R-Design package is included on all T5 models. The package includes a satin matte-finish grille with matching side mirrors, lower side moldings, a rear spoiler, and five-spoke wheels. The interior features a unique instrument package, unique seats, and a leather-trimmed steering wheel.