IT may be small and sparsely populated, but Australia’s compact prestige wagon market is the one place Volvo can call home.

Traditionally dominant in the segment, the struggling Swedish brand has faced increasing competition from Euro rivals Audi, Mercedes-Benz, BMW and Alfa Romeo. But an all-new V50 wagon, based on the equally new S40 sedan launched here two weeks ago, is the ammunition Volvo says it needs to reclaim its heartland.

And to help it along, the highly specified V50 range will be available from the first week of June in three equipment levels - with the choice of two engines and three transmissions – at a price that easily undercuts its less powerful opposition.

The first wagon to sprout from parent company Ford’s new C1 platform architecture that also underpins the S40 sedan, Mazda3 and the forthcoming second generation Focus, V50 is larger, stiffer, more powerful, better equipped and more expensive than the V40 wagon that preceded it.

Based on the redesigned S40 and sharing all of its interior dimensions (bar extra rear headroom and an extra 46mm in length), V50 rides on a 78mm longer wheelbase than before at 2640mm, and is 54mm wider (1770mm) and 27mm higher (1452mm).

Wheels have been pushed apart in all directions, with front and rear wheel tracks also increasing by 63mm and 57mm respectively and, despite overall length actually being 2mm shorter than before at 4514mm, luggage capacity increasing from 413 to a slightly more competitive 417 litres with the rear seats in place.

Cargo space extends to 1307 litres with the rear seats folded flat, while load capacity is 450kg, the maximum (braked) trailer weight is 1500kg and the front passenger seat folds fully forward to accommodate items like surfboards as long as 3060mm.

Torsional rigidity over V40 increases a healthy 34 per cent (S40 realises a massive 68 per cent improvement in body strength, but Volvo won’t divulge the difference between S40 and V50, suffice to say it’s not as rigid) and V50 shares S40’s unique coil-over-strut front and multi-link rear suspension systems (the latter dubbed Control Blade in Ford models).

Brakes (ventilated 300mm discs up front and solid 280mm rear discs, each with twin-piston aluminium callipers plus standard ABS and EBD) and electro-hydraulic rack-and-pinion steering (delivering a 10.6 metre turning circle and 2.9 turns lock-to-lock) are lifted directly from S40 sedan.

As with S40, engine performance sets V50 apart from both its forebears, its other C1-based stablemates and its compact European wagon rivals, with Volvo Car Australia electing to offer new range with five-cylinder power exclusively.

Replacing the 2.0-litre four-cylinder found in its S40/V40 predecessor (four-cylinder power remains available in other markets), the same Volvo-designed and built transverse 2.435-litre inline five-cylinder engine as found in S40 features continuously variable inlet valve timing, 10.3:1 compression, double overhead cams and four valves per cylinder for a total of 20.

Running on standard unleaded, the refreshingly undersquare all-alloy five-pot uses 83mm x 90mm cylinders to deliver a class-leading 125kW at 6000rpm and 230Nm of torque from 4400rpm – figures that are 25 and 21 per cent up on the previous 2.0 engine respectively.

Driving the front wheels and consuming a claimed 8.6 litres per 100km on the combined cycle (9.2L/100km auto), the base V50 2.4 is claimed to accelerate to 100km/h in a respectable 8.3 seconds (9.0 for the auto, making both cars around a tenth slower than the sedan and 1.4 seconds quicker than V40 at base level) and to a top speed of 220km/h (215km/h auto).

Opening the V50 range at $48,950 (a premium of $3000 over the equivalent S40 sedan) is the 2.4 five-speed manual, with the five-speed sequential-shift Geartronic auto adding $2000 at $50,950.

Weighing in at 1425kg (kerb), the base V50 2.4 features Dala T-Tec cloth trim, dual-zone climate control air-conditioning, integrated rear seat child booster cushions, a 70/30-split folding rear seat, cabin pollen filter, power windows/mirrors, cruise control, 16x6.5-inch alloy wheels with 205/55-section tyres, six-speaker/single-CD audio, multifunction steering wheel, approach lighting, Homesafe lighting, foglights, puddle lights in door mirrors, load cover, roof rails and a cargo net.

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As with S40, engine performance sets V50 apart from both its forebears, its other C1-based stablemates and its compact European wagon rivals, with Volvo Car Australia electing to offer a new range with five-cylinder power exclusively

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Standard safety equipment is plentiful, including anti-lock brakes with electronic brake-force distribution, dual-stage twin front airbags, front and rear side inflatable curtains (IC), Side Impact Protection System (SIPS) front side airbags, five three-point seatbelts, five adjustable head restraints, anti-submarining on all seats, Whiplash Protection System (WHIPS), traction control, collapsible pedals, collapsible steering column and seatbelt warning for rear passengers.

While Volvo’s new and useful Intelligent Driver Information System (IDIS) is standard on all V50s - as is its revolutionary new 20mm-thick floating centre console, which is finished in Bauxite Grey along with door handles and the like at entry level – there are plenty of options at this level.

The long list includes six metallic paint colours ($1350 only two solid colours are available – blue and white), 17x7.0-inch alloys with 205/50-section tyres ($1500), leather seats, steering wheel and gearknob ($3600), wood-effect interior inlay ($345), aluminium interior inlay ($545), Iced Aqua interior inlay ($645), Cabin Air Quality System ($250), power driver’s seat ($1950), trip computer ($555), floor mats ($125), eight-speaker High Performance sound ($1350), six-CD stacker ($795), sunroof ($2150), bi-Xenon headlights ($2250), Dynamic Stability Traction Control ($2190), laminated side windows ($850), rain-sensing wipers ($250) and heated front seats ($315).

Stepping up a level is the V50 2.4 SE, which is also available in five-speed manual and five-speed semi-auto guise, both at $52,950 – a $3000 increase on the S40 2.4 SE auto sedan.

The 1443kg V50 2.4 SE adds, as standard, leather-trimmed seats, steering wheel and gearknob, wood-effect interior inlay, power driver’s seat, trip computer, floor mats, eight-speaker audio and a rear armrest with cupholders. VCA says that for the extra $4000, V50 SE adds features worth $8575, including $2000 for the no-cost auto.

SE also adds options like a powered front passenger seat ($1950) and 12-speaker Premium sound ($2280), while the transparent Iced Aqua interior treatment costs just $345 extra.

At the top of the six-variant V50 range is the turbocharged T5, which costs $62,950 in both six-speed manual and five-speed semi-auto form and features the same 2.521-litre inline five-cylinder engine as the S40 T5 sedan.

Delivering an impressive 162kW at a more relaxed 5000rpm and some 320Nm of torque between a low 1500rpm and 4800rpm, the T5 engine’s 83mm x 93.2mm cylinder dimensions are also long-stroke. But this five-pot adds turbocharging, an air-to-air intercooler, continuously variable exhaust valve timing, lower 9.0:1 compression and a 95 RON premium unleaded diet.

The T5’s claimed performance is considerably quicker at 6.9 seconds for the 0-100km/h sprint (7.3 for the auto), while top speed is up, at 240km/h (235km/h auto) – as is fuel consumption, to 8.8L/100km combined (9.5L/100km auto). At just 4kg heavier than the SE, T5’s power-to-weight ratio increases from 11.40 to just 8.93kg per kW.

Featuring the same standard features as the S40 T5 sedan, V50 T5 adds aluminium interior inlay, Cabin Air Quality System, bi-Xenon headlights with washers, Dynamic Stability Traction Control (DSTC) and 17x7.0-inch alloy wheels.

Premium 12-speaker sound costs $930 in the T5, while a power passenger seat, sunroof, six-CD stacker, metallic paint, rain-sensing wipers and heated front seats also remain optional. Curiously, the integrated rear child seat boosters are a $550 option on T5, but may become standard as they are on 2.4/SE.

Despite this, V50 stacks up well in both value and performance terms against premium compact wagon rivals like Alfa 156 Sportwagon (121kW, $53,500), Audi A4 Avant 2.0 (96kW, $54,250), BMW 320i Touring (125kW, $65,900) and Mercedes-Benz C200K Estate (120kW, $67,900).

Only the BMW matches V50 for performance, but is priced above the range-topping 162kW T5, which has no performance peer in this class.

While V50 will be outsold by S40 at a ratio of three-to-one in Australia – the opposite of Europe, where wagons outsell sedans by a similar ratio - Volvo concedes it may create more demand for its new compact wagon than can be satisfied by limited supply that will see Australia allocated only 200 V50s for the remainder of 2004.

With just 400 to be available in 2005 and having traditionally sold between 450 and 750 units in a market segment that usually numbers between 1500 and 2000 vehicles annually, it will take some time before V50 realises Volvo’s ambition to dominate the segment once again.

Australia will need to battle for supply of the Belgian-built V50 with the US, which has also decided to launch V50, and in the meantime buyers could face delays of up four months for delivery and VCA may offer option incentives to soften the blow. With freer supply, VCA says it could sell 25 per cent more S40 and V50 vehicles.

Waiting time aside, it appears V50 will provide VCA with the small but incrementally important sales growth it needs to continue its slow upward climb from its worst sales month of June 2004.

VCA sales are up 23 per cent year-on-year, an all-wheel drive V50 T5 flagship will bolster the range in the second quarter of 2005 (at a five per cent premium over the current T5), and VCA says there will be little cannibalisation between the volume selling S40/V50 range (priced between $45,000 and $63,000) and the larger S60 sedan, which is priced between $55,000 and $70,000 and sized between 3 Series and 5 Series.

Volvo V50 range pricing:
V50 2.4 manual $48,950 (five-speed)
V50 2.4 automatic $50,950 (five-speed)
V50 2.4 SE manual $52,950 (five-speed)
V50 2.4 SE automatic $52,950 (five-speed)
V50 T5 manual $62,950 (six-speed)
V50 T5 automatic $62,950 (five-speed)