In every day driving, it moves briskly away from intersections, the five-speed automatic shifting smoothly through the gears. Overall, the S40 is quiet, with only a little tire noise coming through to the passenger compartment.

The S40 and V40 are powered by Volvo's 1.9-liter inline four-cylinder engine that uses light-pressure turbocharging and continuously variable valve timing to produce an impressive 160 horsepower at 5250 rpm. Even more impressive is its 177 pound-feet of torque all the way from 1800-4800 rpm. Torque is that force that propels you quickly from intersections or helps you accelerate up a steep hill.

In fact, its performance is on par with many V6-powered compacts. The low-pressure turbocharger boosts the low-end torque, so Volvo's little four-cylinder engine feels more like a medium-size V6. Unlike the boisterous turbo-motors of days gone by, you can barely tell this engine is boosted, as there is no whine, no sudden surge of power nor even a boost gauge.

The high-torque turbo engine works very well with the five-speed automatic transmission. Five gear ratios is better than four. The five-speed automatic offers significantly better fuel economy, slightly better acceleration performance, and makes less noise than a four-speed automatic.

The S40 feels stable at highway speeds. It handles nicely, in the European style. It isn't as hard-edged as a BMW 3 Series, but it is crisper and more satisfying than a Toyota Camry or Honda Accord. The body leans in corners as one would expect of a Volvo. But there's an impressive amount of grip here, more than we expected. Drive beyond the grip of the tires and the S40 slides around corners in a predictable fashion. That's good to know. If you ever start sliding on a wet corner one night, just keep your wits about you and steer through the corner.

Like most Volvos, the steering is slower than it is on Japanese cars. The steering feels fine on twisty roads, but on straight roads it feels a bit dead on-center. Apparently Volvo engineers modified the steering and suspension for the U.S. market, making them both softer to suit their perception of American tastes.

This car has good brakes. Brake hard and the S40 delivers quick stopping performance. The pedal feels nice and firm and it's easy to judge and modulate braking performance. It's smooth and stable under hard braking and the anti-lock braking system is tuned well. It strikes a good balance between helping the drive to maintain control under hard braking while delivering short stopping distances.