Volvo’s smallest SUV made the biggest impact when it was unveiled in late 2017. Critically acclaimed, it picked up several awards including the prestigious European Car of the Year title.

We were hugely impressed when we road-tested the XC40 in early 2018, but we only got to try the 188bhp D4 (diesel) and 244bhp (petrol T5) versions, which both came with an eight-speed automatic gearbox and all-wheel drive.

In 2018, UK diesel registrations plummeted by 30%, so it’s more important than ever to re-visit this Swedish premium gem – this time powered by an additional smaller petrol engine.

First, let’s get a feel for where the Volvo XC40 sits in the SUV market. In terms of price and quality, we’d say its natural rivals include the BMW X1, Audi Q3, Jaguar E-Pace and Mercedes-Benz GLA, though the cheaper Mazda CX-5 is a great car too.

Priced from £27,610, there are three trim levels – Momentum, R-Design (the most popular) and Inscription – each one available in a higher spec Pro version.

I tested the entry-level XC40 T3 in Momentum Pro trim which was packed with options and tipped the scales at just under £35,000.

Its three-cylinder 1.5-litre engine develops 154bhp and is paired with a six-speed manual gearbox, while drive is through the front wheels. If you want to stick with petrol but you’d prefer four-wheel drive, you’ll have to go for the four-cylinder 2.0-litre T4 (the biggest selling XC40) or the more powerful T5.

Some say the XC40 is the result of a Russian Doll SUV strategy from Volvo and that it’s simply a mini version of the XC60 and XC90. The reality is that is has its own unique style, boasting a concave grille, a clamshell bonnet and chunkier overall look.

The interior is definitely similar to its bigger siblings with its attractive, quality layout and large portrait infotainment touchscreen in the centre console and a slick 12.3-inch digital instrument cluster ahead of the driver.

There’s plenty of space too, up front and at the back (taller passengers included), while the overall finish is faultless. Our only slight quibble would be that even with the driver’s seat at its lowest setting, it’s a little high on the high side for taller people… though others might call it a commanding driving position.

Boot space is excellent, stretching from 460 litres to 1,336 litres if you fold down the rear seats. There’s a clever touch in the boot because the floor folds to divide up the space – great for stopping shopping bags sliding around, for instance.

Among the multitude of safety systems on board, there’s City Safety, Volvo’s automatic emergency braking (AEB) system which can detect pedestrians, cyclists and large animals, plus Oncoming Lane Mitigation, which warns you if you move out of your lane into the path of an oncoming vehicle and helps steer you safely back into your lane.

On paper it’s capable of a 0-62mph time of 9.4 seconds, a top speed of 124mph, fuel economy of 44.1-45.6mpg and 144-148g/km CO2 emissions.

The car I tested was a looker, finished in Amazon Blue with a contrasting white roof and eye-catching five-spoke white/black 19-inch alloy wheels.

It went well too. For a relatively small engine, it seemed more eager than the official figures suggest, while cabin refinement was hugely impressive – you really have to put your foot to the floor before the three-cylinder thrum makes itself known.

The gearchange is good, though not quite as sporty as say the Mazda CX-5, so generally it’s an impressive package.

However, real world fuel economy was slightly disappointing, just like most three-pots because they have to be worked just that bit harder. Realistically, you probably won’t better 30-37mpg unless you’re on a long journey at a steady, modest speed.

The good news is that the Volvo XC40 is one of the best handling SUVs on the market, managing to feel composed and stay fairly flat in faster corners, while the ride is on the firm side, but still comfy.

Traction is good, but the front wheels will struggle for grip in wet conditions. Most XC40s probably end up in and around town, so this won’t be a problem. If you live in the country where you’d expect your XC40 to cope with more challenging conditions during weather extremes, then maybe all-wheel drive would be the way to go.

Generally, the XC40 is an engaging drive with the various modes (including Eco, Comfort and Dynamic) offering that extra bit of variety, while the steering is sharp and nicely weighted.

Verdict: The entry-level petrol-powered Volvo XC40 T3 is a surprise package, offering more speed and refinement than you’d expect. The fact that it’s also classy, safe, practical and handles well is just the icing on the cake.

Review in association with www.automotiveblog.co.uk