Volvo’s new Audi A3 and BMW 1-Series competitor, the V40 five-door hatchback, will be priced from £19,745 when it goes on sale in the UK in September.

The luxury hatchback will be available in ES, SE and SE LUX trim with Bluetooth fitted as standard across the range. Customers are able to place orders now with production starting in May.

The engine lineup features a D2 version with CO2 emissions at 94g/km and possible fuel consumption of 78.5mpg.

The D2 comes with a 1.6-litre diesel engine which has 115bhp and 285 Nm of torque and comes with a six-speed manual gearbox and start/stop function.

The new model is the first car in the world to feature a pedestrian airbag, an innovation which helps reduce the severity of pedestrian injuries in the event of an impact. As expected, Volvo is still putting a huge onus on safety with its City Safety and Pedestrian Detection fitted as standard on the V40.

The entry level ES comes with Bluetooth with music streaming; high performance audio with five-inch colour display screen; electronic climate control; 16-inch Matres alloy wheels; dynamic stability and traction control; power windows; leather steering wheel and gear knob; and textile floor mats.

Nick Connor, acting managing director at Volvo Car UK, said: "The V40 generated a huge amount of excitement and interest when it was launched at the Geneva Motor Show last month.

“Early signs show that the vehicle's residual values will be strong, and we are confident that consumer finance packages and contract hire rates in the business sector will prove to be extremely competitive."