Volvo introduced the second generation of the S40 in 2003, followed by the station version for it a year later with the name V50.
After Volvo was bought by Ford in 1999, the Swedish carmaker had to share its parts and underpinnings with the American carmaker. Thus, the V50 ended up using the same platform as the Ford Focus and the Mazda 3. It was an economic measure meant to lower the production costs of the vehicles, although as a premium carmaker, it couldn't sell for cheap.
Volvo had already ditched the former angular look and moved its design language into the curved panels and soft areas. Thus, the S40/V50 lineups featured a front fascia where the grille was more advanced than the headlights. The carmaker stated that this detail will resemble the former Viking boats, with a nose-in-the-air stance. In the long-roof version, this compact-sized vehicle featured a sports-wagon styling with an ascending beltline with narrower rear side windows. Moreover, at the back, the vertical-mounted taillights emphasized the car's rear end.
Inside, the front bucket seats benefited from an anti-diving technology, which allowed the occupants to remain planted in their seats in the event of a frontal crash. Later on, most cars on the market were fitted with that technology, but in the 2000s, that was an important innovation. At the back, the 60/40 split-folding bench allowed two passengers to comfortably sit there.
Under the hood, Volvo installed a choice of gasoline and turbo-diesel engines, depending on the market. Power went to the front wheels via a five-speed manual or a five-speed automatic. For selected versions, an all-wheel drive system was available as an option.
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