Volvo XC40 to be best-seller

Swedish-based Chinese-owned car-maker Volvo is set to enter the booming small SUV segment later in 2017 with its all-new XC40 — a vehicle it reckons will go top of the pops.

Coming to Australia in May 2018, it's tipped to overthrow the bigger XC60 as the brand's best-selling model, with a price expected to challenge the likes of the Audi Q2 at around $40,000.

Powered by the brand's upcoming new 1.5-litre turbo-petrol three-cylinder engine hooked up to a new dual-clutch automatic transmission, entry-level XC40 vehicles are expected to generate at least 110kW (150hp).

Plug-in hybrid versions of the small Scandinavian SUV will occur eventually and motoring.com.au has learned the company will only build petrol-powered versions of the 1.5-litre three-cylinder engine, spurning diesel.

The XC40 could be paired with Volvo's existing 2.0-litre four-cylinder turbo-diesel engine, however.

All-wheel drive, advanced digital instrument panels and the large "Sensus" touch-screen infotainment system from the XC60 and XC90 models will be offered.

Volvo's unique exterior and interior designs will mirror those of the XC40 concept car’s  and will be joined by class-leading safety and driver assistance technology. The latter is expected to deliver semi-automated driving, known as Pilot Assist in the new XC60.

"Potentially it could be bigger than XC60," said Volvo Car Australia's corporate and PR director, Greg Bosnich, when questioned about sales projections for the XC40.

"Next year [2018] the XC40 comes to Australia, in the second quarter, after it goes into production later in 2017," he said.

"It's a fast-growing segment, it's got significant potential and for us it's all new business. We don't even have a vehicle in that [small SUV] segment yet."

Based on Volvo's new CMA or compact modular architecture, which will also underpin several of its Chinese parent-company Geely's upcoming vehicles, the XC40 will be followed by a pair of small passenger cars, the new S40 sedan and V40 wagon.

A high-performance version of the XC40 bearing Polestar badges is almost certain, but rumours of a compact SUV slotting in underneath the XC40, potentially called the XC20, appear less likely.

"I genuinely haven't heard of anything to that regard," stated the Volvo Australia PR boss.