Volvo has set its eyes on the increasingly popular premium small SUV segment and is readying a new XC40 that will arrive in the market in late 2017 or early 2018.

Designed to rival the latest crop of small luxury crossovers and SUVs such as the Audi Q3, BMW X1, Mercedes-Benz GLA and the upcoming Infinifi QX30, the XC40 belongs to Volvo’s next 40-series line of compact cars that will include a new S40 and V40.

The car we spied undergoing trials on public roads in Sweden is a cobbled-up test mule, as Volvo dropped a modified body of the existing V40 Cross Country atop their new Compact Modular Architecture (CMA), so the production model will look nothing like this. Instead, it will borrow family styling cues from the new XC90 SUV, the upcoming S90 and V90 models, as well as Volvo’s recent XC Coupe Concept.

The Swedish firm’s engine planners will give the XC40 the latest generation of in-house powertrains in three- and four-cylinder versions, along with a selection of their Drive-E plug-in hybrid four-cylinder petrol and diesel units.

Earlier this month, Volvo officials confirmed that production of the entire 40-series family will take place at its Ghent factory in Belgium, where the company is investing around €200 million to prepare it for the CMA-based cars.

Photo Credits: CarPix for CarScoops

Photo Gallery