Some luxury automakers are known for making such small design updates on their vehicles that many people won't even notice a change. Not Volvo. Starting with the XC90, Volvo has transformed itself from the brand of the quirky professor type to a brand recognized for modern technology and daring design. The new XC40 is the automaker's most boldly designed vehicle, right down to the (polarizing) orange carpet on our recent tester.

The 2019 Volvo XC40 competes in the subcompact crossover segment with the Mercedes-Benz GLA, the BMW X1, and a host of other new vehicles. It retains the brand's signature grille, Thor's hammer daytime running lights, and vertical-oriented taillights. But with its boxy proportions and available color-contrasting roof, the XC40 looks much less conventional than the XC60, which is just one size up. The XC40 is 10.4 inches shorter in length and 8.1 inches narrower with a wheelbase that is 6.4 inches smaller, but it's just as tall, and its 8.3 inches of ground clearance puts it on par with the XC60's 8.2–8.5 inches (depending on the suspension selected). So yes, go ahead and call it a crossover.

The XC40 is the first Volvo to sit on the Compact Modular Architecture, which will underpin all upcoming 40-series cars. Initially, the only engine available is a 2.0-liter turbocharged inline-four making 248 hp and 258 lb-ft of torque. This unit comes with an eight-speed automatic that sends power to the all-wheel-drive system.

In our performance tests, the XC40 lived up to its competitors. It managed a 0–60 time of 6.7 seconds, sitting in good company with a 2016 BMW X1 xDrive28i AWD and 2018 Mercedes-Benz GLA 250 4Matic AWD we've tested. These two competitors ran to 60 mph in 6.8 seconds and 6.9 seconds, respectively. The XC40 is quicker than a comparably powered XC60, which hit the mark in 7.3 seconds.

The XC40 went around the figure eight in 27 seconds at an average of 0.65 g, slightly behind its rivals. The X1 hugged the corners in 26.8 seconds at 0.65 g; the GLA 250 did it in 26.6 seconds at 0.67 g.

Testing director Kim Reynolds noted the XC40's dynamics may be better suited to the urban landscape than handling track tests. "The car is a bit difficult to drive smoothly, as the yaw response gets easily out of whack with steering inputs; steering effort is too light, even in dynamic," he said. "It's braking is also kind of hard to judge, and once or twice I probably initiated braking a touch too soon."

You'll find the XC40 plenty powerful while making quick moves in the city and merging onto the highway. The XC40 is easy to maneuver around the parking lot or bends in the road, though it's not as nimble as the GLA 250. Our tester was an R-Design model, which features a standard sport suspension. Unfortunately, road imperfections seep into the cabin and can knock you around a little at moderate speeds. And although the angular side windows look cool from the outside, they impair visibility when you're checking your blind spots and trying to change lanes.

Our XC40 performed better in our fuel economy tests than those conducted by the EPA, at least in city and combined ratings. We recorded the XC40 at 25.4/28.7/26.8 mpg city/highway/combined, up from the EPA's estimate of 23/31/26 mpg. For comparison, the X1 mustered 21.2/33.0/25.3 mpg in our Real MPG tests.

Now about that orange elephant in the room. Our model came equipped with "Lava" orange carpeting that extends to the door panels and center console. Personally, I'm not a fan of the color and its coarse texture. But there are other interior themes to choose from, as the orange digs are only available as a $100 option on R-Design models. Our tester's nubuck leather seats were quite comfortable.