Volvo combines a passion for perfecting the underlying oily mechanicals of a car with an admirably crisp, direct and no-nonsense approach to design. Even the pragmatic way their range is configured - S60, XC60, V60, V70, XC70, etc. – makes perfect sense once you understand the nomenclature. 'S' for saloon, 'V' for versatile, 'XC' for cross-country/SUV. Volvo has also steered a steadfast course between the perils of slavish retro imitation and the dangers of ditching your heritage completely; this is first and foremost a Swedish company (albeit one now backed with Chinese money, rather than American) and the country's culture runs deep.

The V40 is the latest version of what's now the smallest Volvo you can buy – what the industry calls the 'premium compact hatchback'. From the outset, you're struck with the impression of a beautifully thought out, utterly functional yet also highly likeable thing. Sure, other carmakers operate in the same sector, many of them selling orders of magnitude more than Volvo. But whereas its competitors struggle to combine character with competence, the V40 manages both with ease.

The spec sheet doesn't make for exciting reading – a 5-cylinder turbo diesel with 150bhp – but it's a sprightly drive, aided by a cabin-full of sophisticated tech, including radar-controlled cruise control, automated parallel parking, extremely easy-to-use Satnav and phone pairing, and DAB radio. That's all packaged up extremely effectively, inside and out, where Volvo's 'R-Design' trim subtly enhances the well-detailed bodywork.

Volvo is looking to bolster its design credentials, and cars like the V40 provide a pretty solid place to start. If you're not after a large vehicle – and an all-new XC90 is due late in 2014 – then the V40 is surefooted, swift enough, works beautifully and dovetails seamlessly into everyday life. Function needn't be dull, and good design that doesn't need to scream and shout is a rare find indeed.