The roomy Volvo V50 is the wagon version of the S40 compact sedan. Designed to compete in the entry-level sport wagon segment, the V50 is available with many premium features not available from other competitors. A choice of a 168-bhp 2.4L I-4, or turbocharged 227-bhp 2.5L I-5 engine, is coupled to a 5-speed Geartronic(R) automatic. The V50 T5 features AWD for improved traction and handling. Dynamic Stability and Traction Control (DSTC), Bi-Xenon headlights, and DVD navigation system are available.

The T5 with FWD has been dropped. The new R-Design package becomes standard on the T5 AWD. 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.