Volvo’s XC40 is, as the company notes, a milestone car for the firm.

It’s the company’s first foray into the compact SUV segment, the first to be built on their all-new CMA (Compact Modular Architecture Platform) and is also the first of the firm’s new-generation 40-series models.

The XC40 takes Volvo’s design ethos in a funkier, more youthful direction.

Its bold creases and strong lines effortlessly blend with the firm’s signature “Hammer of Thor” daytime running lights and concave grille that it shares with other models from the Swede’s stable. Unique, but uniquely Volvo, tail lights help emphasise the strong shoulder lines and enhance the car’s robust but cute looks.

There is some notable attention to detail, with doors that extend all the way to the bottom of the car’s bodywork preventing the sills, and consequently passengers, from getting dirty climbing in and out of the car.

There are three main specifications – Momentum, R-Design and Inscription – with additional sub models labelled ‘Pro’.

Standard equipment on Momentum trim includes dual-zone climate control, 18in alloy wheels, rear parking sensors, auto wipers, cruise control, and a 12.3in digital instrument panel. Also included – on every model – is Volvo’s signature nine-inch smartphone-mimicking touchscreen infotainment system. The Pro version adds heated front seats, heated windscreen, adaptive headlights and auto-folding door mirrors.

R-Design replaces the Momentum’s cloth seats with leather – and wraps the steering wheel and gear knob in it too – rides on diamond-cut alloys and includes gloss black trim and tinted windows.

Go Pro and the heated seats and adaptive headlights reappear while the alloys grow to 20 inches and the driver’s seat is equipped with power adjustment.

Inscription sits - almost - at the top of the trim tree and for the extra outlay you’ll be rewarded with ambient lighting, power tailgate, metallic paint, front parking sensors and a matt silver finish on the front and rear skid plates.

If you want it all – and ‘all’ includes 19in wheels and LED front fog lights – then you’ll have to go Pro once again.

There are three- and four-cylinder petrol engines – T3, T4 and T5 producing 154, 188 and 247bhp respectively – and the 148bhp D3 and 188bhp D4 diesels to choose from.

Climb inside and Volvo have managed to produce a cabin that feels both reassuringly familiar – thanks in no small way to the nine-inch portrait touchscreen that dominates the fascia – but also bold and refreshing.

There’s a sense that there’s nothing in the passenger space that doesn’t really need to be there. Analogue controls are kept to an absolute minimum. Most of the vehicle’s functions are operated via the deck of cards-style interface. It does take a little while to get used to but it’s slick, responsive and right up there among the very best.

However – and there are two of these – I’ve always believed there are some functions that work better using an analogue interface, such as the temperature controls, simply because it’s neither practical nor particularly safe to keep taking your eyes off the road to guarantee you’re actually doing what you set out to do, and to use a touchscreen that’s exactly what you’ll find yourself doing.

The other ‘however’ revolves around Android Auto – which I used – and Apple CarPlay. It will cost a not insignificant £300 to add it to your vehicle and a lot of the touchscreen real estate is wasted because Android Auto only displays in landscape mode.

Material quality is excellent, and it has to be, given the circles that the XC40 is aiming to move in. It’s a tidy, functional space and the absence of switchgear contributes to the clean, fresh, aesthetic.

There are a few thoughtful touches too, such as the folding hook in the glovebox and removable bin between the seats that makes clearing up after that rogue boiled sweet goes AWOL a lot easier.

Special mention to the door bins, which are huge, and can be specified with a colourful flock lining if you want to add a splash of vibrant colour to the cabin.

There’s ample room up front, both for heads and legs, and the long wheelbase means that taller people can be accommodated comfortably in the back too. It’s a bit of a squeeze in the rear if you want to carry a fifth passenger and, to make things even more awkward, there’s a transmission tunnel that requires straddling.

The 460-litre boot isn’t the largest in the class, but it is very practical and easy to use. The floor is flat – there isn’t even a lip to negotiate – and it remains flat even when you lower the rear seats. Capacity rises to 1,336 litres when you do.

R-Design spec cars have a more dynamic suspension set-up, with stiffer springs, thicker anti-roll bars and monotube rear shock absorbers but, even so, you’ll find the XC40 – like its big siblings the XC60 and XC40 – firmly ensconced in the comfort camp.

It’s a high-riding compact SUV, so the fact that it won’t stir the senses of an enthusiastic driver shouldn’t arrive as much of a surprise, but doing so was clearly never Volvo’s intention.

It demonstrates decent composure – though it can be found wanting while navigating broken surfaces at low speeds – but for the vast majority of the time it delivers a relaxed, isolating drive.

The steering is nicely weighted and, while there isn’t a great amount of feedback filtering through to the driver, does help inspire confidence when you want, or need, to change direction quickly. In fact, the XC40 copes admirably with rapid changes in attitude, remaining composed and reasonably flat.

You can pick from five Drive Mode settings – Comfort, Eco, Dynamic, Off Road and Individual – which adjust throttle and brake response, steering weight and, if fitted, the responsiveness of the automatic gearbox. It also changes the driver’s information display to indicate which mode has been selected. It’s included as standard across the range.

Under the bonnet of my test car was the firm’s T3 petrol engine with 156hp and 265Nm of torque. It’s a bit of a mixed bag with excellent refinement and decent economy but it does have a very well defined sweet spot outside of which performance becomes laborious and lacklustre.

It’s particularly noticeable at motorway speeds when you’re looking for a quick uptick in forward momentum and, well, nothing much happens when you open the throttle. Steep hills are also testing, often requiring a downshift, or two, in order to maintain your speed.

Thankfully the six-speed manual gearbox is a gem, offering smooth, precise changes that help ease a little of the pain of having to use it so frequently.

Like the XC90 and XC60 before it, the smallest SUV in Volvo’s line-up has emerged as a genuine contender. It’s funky and fresh and strikes a nice balance between comfort and composure. Refinement is, for the most part, excellent but it’s hard to recommend the T3 petrol version when its narrow operating band makes progress a little less serene than you might hope for so check out the diesel options instead.

The cabin is a treat and, while I’m not a fan of the decision to move so many functions onto the touchscreen, the big mobile phone-esque display looks impressive and works well.

It’s particularly hard to ignore the XC40 when you factor in the competitive pricing. My advice to you is: Don’t.

Volvo XC40 T3 R-Design Pro Manual

Price: £31, 360

As tested: £38,335

Engine: 1.5-litre 3-cylinder turbocharged petrol

Transmission: 6-speed manual

Max power: 156hp

Max torque: 265Nm @ 1,850 – 3,850rpm

Max speed: 124mph

Acceleration (0-62mph): 9sec

Combined: 44.8mpg

Emissions (CO2): 146g/km

For more information visit www.volvo.co.uk