Sector: Lower Medium Price: £31,900 Fuel: 47.9mpg CO2: 137g/km

Fitted with the all-new eight-speed automatic gearbox as standard, the V40 T5 becomes the latest member of the Volvo clan to receive the Drive-E powertrains. It’s all part of a £190 million investment by Volvo which will eventually see variants of its all-new 2.0-litre petrol and diesel engine replace eight drivetrains across three platforms.

Drive-E is based on Volvo’s latest mantra that power has nothing to do with cylinder count, so long as you can get more air through a smaller engine. Bearing that in mind, the T5 is a four-cylinder, 2.0-litre turbocharged affair and offers the sort of performance figures which concur with that statement from Volvo. There’s 245bhp of available power which, in turn, delivers a 0-62mph time of 6.3 seconds, and a top speed recorded at 149 mph.

It has enhanced efficiencies over the outgoing five-cylinder engine, too. CO2 emissions are down to 137g/km and Volvo claims the average 47.9mpg figure can be improved even further, by 5%, when the dashboard mounted ECO+ mode is deployed. This function cuts the engine while slowing below 4mph, enables “coasting” at low loads and reduces turbo input. It also changes throttle pedal sensitivity, remaps the gear change and deactivates the air conditioning to also save fuel.

There is a distinct difference between the two driving settings. ECO+ noticeably blunts the V40’s on-road performance, and is really best suited to gentle cruising, shifting back into the default mode when extra power is needed. The new eight-speed auto-transmission is much better suited to this engine than the T4 diesel. At normal speeds it changes gears very smoothly indeed. Only when its put under pressure does it lack a certain amount of finesse, and tends to be a bit jerky when shifting through its many ratios.

On sale now and only available in the one trim level; the T5 Geartronic R-Design Lux Nav is priced at £31,050.