Volvo signed an agreement with Mitsubishi to produce cars together at the NEDCAR factory in the Netherlands, and the result was the S40/V40 lineup.
Volvo's commitment to switch to a front-wheel-drive system continued with the first generation of the S40/V40. But its experience in that area was limited, so it asked other carmakers for help. Thus, the Swedish carmaker introduced a new range in its stable in 1996, using the letter S for sedans and V for station wagons.
With the S40/V40 range, Volvo closed the wedge-design chapter. The new car offered smooth lines and slightly curved body panels. At the front, the bumper featured a lower apron where the carmaker integrated the fog lights. Its horizontal headlights featured smoothened corners on the upper side, flanking the chromed grille with vertical slats. On its sides, the car revealed its family-oriented shape, with an extended roof behind the rear doors. The rear side offered more of a hatchback-style than a Volvo station-wagon type, with a raked-forward tailgate.
Inside, the carmaker installed a dashboard with smooth lines and a center stack that hosted the HVAC controls on the upper side and the radio-cassette player at the bottom. Volvo used a green light illumination in the instrument cluster, showing the speedometer in the middle and the tachometer on the left. Its five-seat cabin offered good room for the front passengers and adequate for the rear ones. The trunk provided 471 liters (16.6 cu-ft) of space with the rear seats up and up to 1421 liters (50.2 cu-ft) with them folded.
Under the hood, the Swedish carmaker installed a wide engine choice either built by Volvo or Mitsubishi (the 1.8-liter direct-injected gasoline unit) or Renault (the 1.9-liter turbo-diesel).